Empowering low-income families

New Delhi: Harish Hande could teach a lesson or two to the government agencies in India. He understands that rather than reducing the cost and quality of products, there is a need to look at creative ways for poor to finance purchases without compromising on quality.
He launched Selco (Solid Waste to Electricity Company), a social venture based in Bengaluru. His goal is to provide affordable, reliable and environmentally sustainable energy services to homes and businesses in rural areas.
Selco has so far installed solar systems in more than 120,000 households in rural areas of Karnataka. He recently received the Ramon Magsaysay Award for his tireless efforts that have empowered low-income families in various ways.
In an interview with Gulf News, he sheds light on the success of solar energy and the need for enterprising minds that can change the lives of villagers.
GULF NEWS: With an energy engineering background, does it mean you were focused enough in life to work in rural areas?
HARISH HANDE: My energy engineering background to a certain extent gave me the tool I needed but focus is not something one learns in college. The real feel of rural areas in India taught me much more than I learnt in school or college.
With what purpose in mind was Selco launched?
The aim was to improve the quality of life of low-income families by empowering them with choice in energy solutions. Selco wanted to destroy three myths: that sustainable energy is expensive, the poor cannot afford and maintain such technology and that a commercial venture cannot be run with social objectives in mind.
Were you at crossroads at any point of time in life? How did you overcome the problems?
There have been many instances where we reached a crossroad. One of the most difficult times was during 2006-2008. One of the issues was a subsidy in European markets, which drove manufacturers in India to only export while increasing domestic prices. Also, during that period, our old sets of financiers were expecting unrealistic returns. We changed our investors by getting in socially-minded people and also created many more products that cost less than Rs10,000 [Dh736.98] to offset the increases.
When you began the project, what shocked you the most about village life in India?
The most astounding fact was the financial savvy of most low-income families who have to juggle borrowed and earned money within the family and external financiers. Most people underestimate the intelligence of the poorer segments, but since they have to work round the clock to make ends meet, they are aware of their families' cash flows. I also realised the amount the villagers are willing to place on reliable services just like anyone else.
Was it easy for people to understand that electricity was linked to income generation due to their enhanced work output?
I think most people affected by it understood the linkage. The only issue was they did not know how to fix it. So, they improvised or adapted to their limited environment at a cost to themselves and their families.
You have proven that one can run a commercial venture while trying to meet social objectives. But why is it that we have few people like you?
When we started in the early 90s, there were few people. But I think, now there is more awareness and social enterprise structure has gained momentum. However, in India regulatory frameworks do not take into account hybrid structures, hence many are forced to establish themselves as commercial entities. This can push them into a highly commercial frame of mind because that's what is being asked of them.
Inappropriate investment also pushes individuals to steer away from their mission goals to meet their investor's targets. It is a sector which requires organic growth, patience and little money. All this is hard for many to overcome. Perhaps, there is also a sentiment among people to make money and to do it in a big way. It is a disservice in this sector to want to grow so fast. It results in following the path of conventional ideas of profit making, which is generally done at the cost of the end user.
Is it correct to say that solar energy is cheaper than conventional energy? If yes, can the same applications be used in urban areas?
With panel prices dropping quickly the cost is fast reducing. Conventional energy costs do not take into account socio-environment costs and neither do they take into account the heavy subsidies that have been showered on that industry making it highly affordable.
Today, we are at crossroads where there is a great likelihood that coal will head down the path of oil and countries need to look within themselves for solutions. India is one of the luckiest to have an abundance of natural resources.
Do you think if the state governments applied similar technologies, even the remotest corners of the country would have been electrified by now?
I think that if aspects of our business model were applied it would have certainly been possible.
So, is inclination the hitch?
Yes, most certainly, inclination has a lot to do with it. Policies and other recommendations put forth by the government tend to percolate down. And by the time it trickles down to the implementation level, there is a complicated path to avail any of the benefits for an entrepreneur.
There is also a lack of foresight in the energy sector. But at times, even when that is present, the goals are very ambitious and the action plans highly impractical. Lack of consensus among state players and those who implement finally creates a gridlock.
How much of what you set out for in 1995 have you achieved?
I think we have achieved success in being able to stay in this business for over 15 years without losing our mission. We have grown organically and built processes that worked for the contexts we were trying to tackle. We have built a stepping-stone and that was the most difficult part. We have a long way to go on how does one translate this success to other parts of India.