Billions of people in developing nations across the world suffer from energy poverty, a condition that prevents these individuals from meeting their basic energy needs. In areas without electricity, night time means children are unable to continue studying and adults are unable to be productive and earn additional income. For a long time, these villagers’ only options were to shut down come nightfall, or to light their houses using kerosene lamps.
There are two problems with kerosene lamps: they are dangerous, and they are expensive. Kerosene lamp-related accidents frequently lead to skin burns and the burning of houses or property. Additionally, the smoke emitted from the lamps is a health risk associated with respiratory disease and cancer. Besides the danger of the lamps, kerosene is neither sustainable nor inexpensive. The reliance on lamps for lighting forces people to spend a significant portion of their annual income on kerosene purchases.
Today, many solutions exist for these rural households that are both safer and more affordable then the kerosene alternative. Off-grid solutions like solar and wind are expanding electrification to areas never before reached. Yet while these solutions are no doubt providing incredible opportunities and sources of income for impoverished individuals, the technology required to provide electricity through these means is still too expensive for many people to afford. To account for this, Nuru Energy has taken a completely unique and innovative approach in designing an alternative solution for electrification needs.
Founded in 2008 when the idea received funding from the World Bank, Nuru Energy has developed a first of its kind charging platform that runs off of human power. Designed like an exercise machine, the Nuru POWERcycle produces enough energy in a 20-minute “bicycle ride” to charge 5 Nuru LED lights for 10 days. With funding from the World Bank, Nuru Energy piloted their first program in Rwanda. They provided Rwandan entrepreneur’s with POWERcycles to set up charging stations, and sold the LED Lights to villagers as an alternative to kerosene lamps.
“Once we piloted the project we found that human power is a viable option for these households to get light,” explained Gaurav Malik, Director of Partnerships and M&E, Nuru Energy India. The success of the piloting led to the founding of Nuru East Africa, which proceeded to set up charging stations and distribution outlets throughout East Africa.
Then, in 2010, the Nuru Africa team approached Gaurav and Deepak Punwani about bringing the company to India. They tied up with organizations including BASIX to establish pilot programs in Orissa. In 2011 Nuru raised funding from Vienna-based Renewable Energy and Energy Efficiancy Partnerships (REEEP).
Soon after the pilots were launched in India, Nuru learned that they would have to restructure their model to adapt to the Indian marketplace. “The first thing that happened was that microfinance institutions got hit with the microfinance crisis, so we had to change our operations,” explained Gaurav. Second, he explained, “India required a more retail oriented business model because a lot of solutions already existed in villages.”
Selling the POWERcycles to entrepreneurs as a means of electricity for light-owners and additional income for the entrepreneurs proved less effective in India. “The charging cycles are largely a niche application in India because of the way the market is structured,” said Gaurav. “Most places will have access to electricity for at least a few hours a day. People can find ways to recharge their products.”
Nuru pivoted around the Indian market and began to build accessories for their existing products in order to tap into the retail market. They soon learned that their products were innovative and convenient enough that demand existed outside of the rural setting. Without being able to capitalize on their existing recharging mechanism, Nuru felt that they needed to adjust their model such that urban sales would subsidize the work in rural areas.
“We set out to build accessories for the product, solar panel charger for the light, a lighting design that could provide 360 degree lighting, and a prototype for a mobile phone charger,” said Gaurav. “We started to tie up with social enterprises, existing distributors of electronics, NGOs, self-help groups, and schools. We also decided to tap into the existing trekking markets by approaching companies like Wildcraft.”
Nuru Energy India hopes to continue to expand their retailing operations in urban areas in order to subsidize LED light sales in rural communities. In India, Gaurav explained, their greatest challenge will be customer acquisition, as they not only have to compete with kerosene, but with the abundant solar lantern market and other cheap electronics brought in from China. However, government initiatives like direct cash transfers have the potential to expand their market presence in off-the-grid technologies.
“Direct cash transfers will give villagers the choice to choose whether they want kerosene, or a solar lantern, or a NURU light,” said Gaurav. “That will move the industry forward.”
On the off-the-grid energy market, Gaurav noted, “The government has come out and said that there are something like 10,000 villages in India that they will not be able to electrify because they are just too out of reach. There will be a lot of demand for off the grid electrification, so the market potential for renewable off the grid energy is very high.”