SELCO (India)

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The Solar Electric Light Company or SELCO India is a company based in Bangalore, India. The main goal of this company is to provide reliable, affordable, and environmentally sustainable energy services to homes and businesses, especially in the rural areas. The company is an expert in the area of solar electricity and its achievements have resulted in the company winning the Ashden Awards (also known as the Green Oscars) twice, once in 2005 and the other in 2007.[1] SELCO was formed in the year 1995 by an entrepreneur named Harish Hande who got the inspiration to start this company while studying energy engineering at the University of Massachusetts at Lowell.[2]

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[edit] Origin

The seeds of SELCO were laid in the year 1994 when Harish Hande decided to sell solar lighting systems.[3] Having no financial backing, he traveled across different villages in coastal Karnataka holding demonstrations and trying to explain the villages about the benefits of solar electricity. Solar electricity being an unproven sector economically also was a serious drawback that Hande had to face while trying to start the company and thereafter promoting its economic viability.[2] Moreover, it was difficult to sell solar power to the rural folk in the country because many could not afford to pay for it. But Hande came with an innovative strategy that focussed on a steady long-term relationship with the customers by building their trust and confidence.[3] SELCO India eventually came into being in 1995 as a subsidiary of SELCO, USA, under the leadership of Hande and Neville Williams, president of SELCO, USA. Financial backing was received in 1996 from Winrock International which released a conditional loan of $150,000 under the USAID Renewable Energy Commercialization project. This was however on a condition that SELCO INDIA provide a feasibility report on the viability of the project. As part of the feasibility report, SELCO proposed a financial model in which each customer would pay 25% of the cost upfront as down payment and will further pay a monthly installment which is affordable and within the average monthly budget of a family in the region. Along with this, the company also indicated that it would provide a year's guarantee to the warranty of the manufacturer along with free service for a year and a 90-day money back guarantee. This financial scheme got good backing with E&CO investing US $107,500 to become SELCO India's first investor. Solar Energy Light Fund, a US-based NGO that promotes solar lighting in the third world also contributing to the initial funding.

[edit] Strategy

The company had to come up with some innovative strategies to make this venture successful. Company employees went on a door-to-door campaign trying to understand the needs of their potential customers and explaining to them the benefits of few extra hours of light in the night like less fumes from gas lamps and extra study time for kids.[2] SELCO also made a rigorous campaign to convince banks of the viability of solar electricity and requested them to provide loans to people interested to go for it and also provide schemes to the borrowers to repay the loans. A sum of about $350,000 was spent on reaching out to people and banks. The amount charged to consumers was as less as 10 rupees per day.[2]

[edit] Achievements

SELCO has so far installed around 85,000 solar lighting systems and has generated sales of $3 million in the fiscal year 2005-06.[2] This is in spite of two-thirds of its customers surviving at less than $4 per day. Some of Selco's customers include poor daily-wage laborers and institutions like schools and seminaries. Everyone is charged the same rate for the solar panel; about $450 for a 40-watt system that can light many 7-watt bulbs for 4 hours between charges. Fewer than 10 percent of the company's customers default in their payment and about $10 million has been made available by lenders to finance this venture.

SELCO has also created other small entrepreneurs like Vijaya Kumar who uses the solar panels to charge 30 small batteries which he then lends to street vendors for a nominal price. This has boosted Kumar's monthly income from Rs. 4500 to Rs. 13000.[2] Other people who have benefited from SELCO's venture are the rose pickers in a village in Bangalore who earlier used to hold a lamp in one of their hands and pick roses from the other as part of their daily pre-dawn routine. SELCO has helped them in acquiring solar powered headlamps which the workers can now wear. With both hands now being free, the productivity of the workers has doubled resulting in a direct improvement in their income.

[edit] Notes

  1. ^ Rashmee Roshan Lall. India shines at Green Oscars. Online webpage of The Times of India, dated 2007-06-22. Retrieved on 2007-06-22.
  2. ^ a b c d e f Snigdha Sen. Lighting Up Rural India. Online Webpage of the CNN Money. © 2007 Cable News Network. Retrieved on 2007-06-22.
  3. ^ a b Lian Chawii. Reaching for the sun. Online webpage of Down To Earth Organisation. Retrieved on 2007-06-22.

[edit] External links