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Hello everyone!

I decided to help out Cyril describing you the fascinating market that is the BOP and share a bit of my experience too to give a more complete picture!          My name is Cecile and I work in the Solar Energy space in Delhi: my task was to start for an Indian Solar Energy start up the Rural branch. I decided to focus my effort on the BOP since I thought the need lies and started with a 5 months research on what is done and possible to do in the Indian Market at the moment.

This is what i want to focus on: the contradictions of the Indian BOP market for energy products (light wise) at the moment, between fascinating state of the art products and the huge lack of electricity in the country.

Couple of things first for you to understand the situation!

The first thing to have in mind is that India does not produce enough energy to be autonomous, around 10% of its demand is missing. During the hot season especially (may, june) and the monsoon season (july, august), temperatures rise over 40 degrees with a humidity that can reach 95%! As a result, everyone needs and uses AC, fans, water coolers and anything that can help support the weather, and the electricity demand explodes!

The second thing is the unequality of the energy distribution. For Delhi for example, in rich areas, in the hot season, there will be 2 to 3 hours power cut in average; whereas in poor areas there will be electricity 6 to 10 hours! 

The last thing is the electrification! India is not all electrified yet, the grid does not go anywhere, and far away from that : it is a vast country with many remote places that remain difficult to access or supply in electricity. The lack of electricity goes up to 95% for states like Assam...

Now the consequences....

The World Bank estimates roughly 2 billion people in the world (a third of the world population) among which 700 million people in South Asia, who do not have a regular access to the electricity grid in 2006! 

Have you realised how much we depend on electricity?? 

With no access to electricity, the gap between deprived population and the others is getting bigger, and social inequality perpetrates! Access to electricity is clearly linked with social progress....In our world where the internet dictates everything, Energy-poor populations are getting more and more disadvantaged! To give some examples, when there is no electricity children cannot study after dust,  hospitals, schools and factories cannot run, there is no access to information (TV, internet) and irrigation or water pumping becomes impossible. As a result, in Asia for example, people are missing and demanding electricity even more than water!   

     India is particularly difficult for rural populations: despite a rising demand under the effect of an increasing demography, the actions are failing to fill the gap. For the Indian Rural Areas, 70% of the population, the situation is dramatic: the electricity supply is extremely low and irregular or even absent for 80 000 villages in the country. Additionnally, it of course affects the poorest  (60% of Indians live with less than 20 Rupees per day) that do not have any other side solution. 

Rural BOP Indian markets have learned to live with the daylight, waking up early and going to bed soon after sunset. When they need electricity, they draw it mainly from traditional sources such as the national grid that supplies them irregular electricity, and candles or kerosene lamps to compensate during power cuts. Unfortunately,  kerosene lamps are an extremely dangerous substitute for the health!

and the solutions ! :)

 The good news is that people worldwide decide to tackle this issue and NGOs and start ups are coming up with fascinating innovations and perfect adaptation to the BOP people's needs and problems (check Cyril 's start up : Prakti Design) ! In India, you can find lots of structures in the energy field that focus on providing customised and financially affordable solutions (SELCO, Dlight, GERES, ...). More often than not, those structures couple up with MFI (microfinance institutions) to create the financial package side where people repay in the long run. This allows them to have access to solutions that can really help BOP people to improve their social situation and reduce the gap with the "rich world".

The bad news is that it is still not that easy! (...yet???) 

Villages are flooding under those new products always improve people’s lives: solar lanterns, water purifiers, cooking stoves, biogas plants, solar water pumps, phones and solar phone chargers, etc. But how this population, 76% of them living with less than 2$ a day (i.e. Bloomberg), can afford all those technologies, as useful as they seem to be? And how and why would they choose between those products that all seem so crucial: water or energy? Irrigation or cooking?

       The first major problem I noticed in my field (solar energy) was the financial model. Some products do not need a long term credit, such as lanterns; but some others like water purifiers or solar home systems, require a heavier investment. To be able to afford those new available products, Rural people need to spend a fair amount of their household money and thus to engage in the long term. Moreover, with the rise of Microfinance worldwide and Asia particularly, structures give those villagers new options and specialise in making credit available for this Rural Market to allow them to afford what they need or they think they need. BOP market in India is generally quite scared to engage in the long run for light purposes. If they do decide to purchase the technology, they more often than not end up using microcredit facilities or local brokers and can enter the dangerous and endless cycle of indebtedness.     

     The second problem from the market of lighting products for non grid BOP people is the lack of maintenance or maybe the threat of being such an attractive huge market for big companies who want to make money at all stake. Rural villagers complain that NGO and diverse companies come to them to convince them and sell them lots of promising products ... but that never stay once it is sold and needs to be repaired. Besides, Indians customers do not have information about what they buy: companies forget to tell them that a battery is a part that you need to replace from time to time! On the second hand, India faces at the moment a clear problem of maintenance and after sales in this field! Those products that are made to be affordable since Indian BOP market is so price sensitive (mainly, Im talking here about the big players such as Tata Bp) are generally of a quite poor quality and do not work anymore extremely quickly! What happens next? Low income villagers do not have anyone to repair it first of all, they mention that the companies or NGO that sold them the product disappears and do not want to take responsibility for those faulting products. From there, they do not know where to repair it from, it is generally quite far from their village, and if they manage to reach the place, they can generally not afford the overall cost.

 All in all, there is still an attraction to this huge market that is the energy Indian BOP here that drags a lot of innovative solutions! Of course it needs to be improved... but that is why we are here, right?! :) 

Cecile