Published on September 24th, 2018 | by Cynthia Shahan0
Katherine Lucey — CEO & Founder of Solar Sister — Talks Last-Mile Solar Revolution (#CleanTechnica Video)
September 24th, 2018 by Cynthia Shahan
Zachary Shahan, director & chief editor here at CleanTechnica, earlier this year spoke to Katherine Lucey, CEO & Founder of Solar Sister, after the Zayed Future Energy Prize awards ceremony. He inquired, “What can you say about what inspired you to start Solar Sister? And has it grown as you expected or has it been different than you expected?”
Katherine Lucey: “Well, let’s start with the first part of that question: which is what started my inspiration for solar sister was — coming out of banking for 20 years in the energy sector and realizing (um, what), that energy is just fundamental for development at the country level. When I left banking, I got involved in a very small foundation that was doing solar work in Uganda putting solar on clinics. And on a trip over there I also saw at the household level that solar is fundamental for development. It is not just a big infrastructure issue — it’s a very specific household issue.
“And that, around this time, it was around 2006, solar was becoming product sized. So instead of large/ big installations that have panels and batteries and wires and all of this, all of a sudden you had a very appropriate and affordable and rugged product that was solar-powered light. And, It was something that people could buy, even people living in remote villages could buy it. It was affordable for them, and especially because it’s replacing kerosene, which is one of the most expensive fuel sources for lighting, they could replace that with solar. That once you buy the light, the fuel is free.”
Zachary chimed in, “And the payback, the return on investment, is insanely quick.”
“Yes, if I had an investment that good that had an investment payback that quick, I’d be rich. So, it really intrigued me that we had this solution of solar lighting that’s very distributable — it’s appropriate, it’s affordable, and it’s rugged. And why weren’t people just eating it up? Why weren’t people buying it? Why wasn’t it reaching these remote areas where it would just transform lives. And so I got on to solving that puzzle. Why wasn’t it, the product getting out where it was most needed?”
She continues, “And the solution was really two-fold — it’s distribution, a classical last-mile distribution problem, of just simply getting the product, and the knowledge, and the awareness out to these remote rural areas in sub-Saharan Africa. So it was — last-mile distribution was one of the gaps.
“And then the second gap was — it’s a gender issue. At the household level, energy is managed by women. They’re the ones that walk to town, fill up a Coca-Cola bottle with kerosene and bring it home, fill up the lamps and light for the lighting for that night. And if we’re gonna disrupt that, if we’re gonna have a woman decide for her own self that instead of spending that $2 or $4 a week on kerosene, she’s gonna buy a $5 solar lamp. She’s got to be the one that makes that decision. And so we needed to reach her.”
Zach laughs, “Let’s just be honest, men will sleep in the cold, right.”
She laughs, “And so, if we were going to disrupt that and have her make the decision that she would really prefer — this new technology that she doesn’t really trust or know about even — the best way to do that was through another woman telling her, someone that she knows and trusts, somebody right there from her own village. And that became the beginning of the Solar Sister network.”
Zachary chimed in again, “It’s a lot of great insight. You just thought that through? Or you had some kind of insight?”
Katherine responds, “It took years.”
Zach relates, “I mean it sounds simple and clear when you run through it in a couple of sentences, but it is actually, it’s very an insightful deep thing.”
Katherine, “Well, it came, um, I think in two phases. One was realizing the products just were not in the areas. And so how do you get them out there? We needed a distributed way to do it. So that’s.”
Zach interjects, “Realizing who’s in charge.” Katherine continues,
“And that it has to be very, you had to keep the price super low. So you can’t have a big infrastructure to make this distribution. It has to be very thin, very efficient.”
Zach points out, “Well, even with these small solar lights and great return on investment, the upfront costs still is scary when you are living day to day or week to week. It can still be a challenge. There are a lot of great financing methods for that now. But.”
“It can be a big investment for a family to purchase a light. But it is within their grasp. Because the lights are — you can start with something as low as a $5 investment or make a $35 investment for one that also charges phones.
“Across African in the rural areas where people don’t have electricity but they all have cell phones, you have to think about where are they going to get that charge.”
Zach supports, “And they can often go very long distances to get that charge.”
So, once they got the light, there was the phone, there was more. There was considerably more effort to charge phones than lights. So, rather than walking miles and miles for phone charging, a woman may prefer to listen to other women and invest in solar not to go long distances to charge a phone.
Katherine continues that they set up local women in businesses as well. This was 2010. To sell to people in remote villages, replacing kerosene and energy is managed by women. “Solar sister needed to reach ‘her’ if we were going to disrupt her.”
Zach asked, “It’s been 8 years. Or almost 8 years. How has it evolved? Was it basically as you dreamt or has it changed from your…?”
Katherine (laughs) then answers,
“The very essential part of it is still the core. Because it is a really, really simple business model — it’s direct selling. We recruit, train, and support women to set up their own business. That is a distribution. It’s a sales business of these products. We give them access to the best quality products. And we make sure that there are warranties and they understand how the warranty works. And we provide the logistic support and marketing and business training and empowerment training — which is helping the women, just basically the belief that they can do this: Getting them over that hurdle, that, yes, you can create this business, its technology, and we can give you the understanding of it. So we, that’s the support we provide them.
“And what they provide is, they bring their own capital to the business. They bring their own networks, deep networks in a community, and that’s where they reach out to make their sales. And then, we teach them — and part of the business training is how to even expand their networks beyond their immediate circle of family and friends. And learn how to reach out, you know, if you know someone in the next village over and then they can help you reach out to the school or the community leader in that village and expand your…”
Zach inquires, “Do you really get some cases of people who really get the entrepreneurial spirit and become your, become major. …”
Katherine, “Yes, yes.”
Zach, “… and do you have numbers?”
Katherine, “So, we’ve helped 3,000 women start business across. It started in Uganda, but now we’re in Uganda, Tanzania, and Nigeria. So, we have 3,000 businesses, local, very rural business that are self-sustaining and they can go on and on. And of those 3,000, I think it’s a typical 80/20 swing between — 80 percent of them are very small, um, some of them are even seasonal — they may be a woman who’s a farmer who, during farming season, she’s planting or harvesting and then between seasons she’s running this business to keep cash flow going. So, you see some of that seasonal, you see some occasional business. But then with that 20% at the top, you see women who are just. …”
Katherine continues, “yea if they had the opportunity and the education when they were growing up —”
Zach says, “making a business … they’d be CEO of GE or something. And, so, you stay in touch with all of them ongoing. It’s an ongoing connection. It must be hard to quantify. I’m sure you’ve tried to quantify how many people and homes you’ve helped through that network?”
Katherine laughs, “Well, I’m a banking analyst.”
Zach encourages her, “Jump into the spreadsheet —”
“Exactly,” she says, “I love data, I love the numbers. So because of the transactional nature of — it’s a social impact business, and we’re creating impact but because there is a transactional basis to it, we are able to have really granular data about exactly how many lamps did we sell, how many home systems did we sell, how many ones with phone chargers did we sell. Did we, we have someone who, a household that bought a small lamp and then moved up to the phone charger system, then moved up to the home system. So we have all this great data that really gives us insight into these markets. Which is — it’s not a market that people know very much about. These are really last-mile rural consumers.”
Zach asked more, “What’s the total number of people you think you’ve helped at this stage?”
Katherine confirms, “We’ve just last year topped one million.”
Zach exuberantly remarks, “Amazing, I mean, that’s what I love about the prize. I mean you talk to these organizations and small businesses — they don’t have huge megawatt figures like First Solar would have — but they have touched millions. I mean, across the winners and finalists, millions and millions of people that are sort of not, not, I mean it’s not really recognized that they’ve been touched, that they’ve been helped. It’s sort of a small niche community that recognizes it. But even the prize, I think pulls them together so much where you see the scale, of all these businesses “
She agrees, and emphasizes, “One of the things I really like about what they do, if I can be proud about that, is that we’ve kept our focus on that last-mile customer. And we know we are in the right neighborhoods. We know we’re reaching the right people where the impact is transformative. Because they are giving up the kerosene and they are now using solar light. That completely changes everything for that family. And so we think of it — the First Light Last Mile is the customer base we are most focused on.”
Zach adds some broader context, “We’ve seen, in this industry, it all started with solar lighting and now more and more companies and non-profits are moving into appliances and … selling beyond lighting and small solar panels. Are you going in that direction as well?
Katherine: “Our product basket is very much dictated by our customers, we are driven by demand. There’s a bit of market education and availability education we need to let them know, ‘Okay, now you can have a fan that’s powered by solar.’ It is classic last-mile distribution.”
It is a lot harder to get to the last mile. Katherine thinks phone charging is the biggest change because being able to be connected to other people is just a human desire. She indicated they may move on to full home systems in the future.
Zach inquires, “Has it grown faster than expected? Or is it about the same? Or has it been you, you hoped to have reached 10 million by now?”
She laughs, “Yeah, I totally overly — I have big ambitions, big aspirations. I think there are two lessons that I’ve learned from this, and one is that it is a lot harder and takes a lot longer to get to the last mile than I ever thought. I mean, we could do a whole other thing on like lessons learned.”
Impact Business — A Social Enterprise
Zach continues to ask what the main challenges are? What are the challenges she is still struggling with today?
Katherine responds about a couple of the big challenges:
“A couple of the big challenges: One is because this is an impact business, it’s a social enterprise, so we are really focused on creating impact and its tied to community service and women empowerment. And there is a lot of social good that comes out of this, but it is based on the business model. And while social enterprise is a concept that is very well understood in Europe, and the United States, and kind of leading edge and it’s great, but when you go into rural Tanzania, people understand business, and this is how business works, and they understand NGOs, and this is how charity and NGOs work. It is harder to get that concept, and it is harder to find people who have any experience or any, to be able to … to stand right on that tipping point between business and impact and really be comfortable saying I am going to do this because it is creating the most impact, but I am going to use business methods. So we end up really growing our own staff and growing our own teams and building capacity. I mean, growing human capacity is probably our limiting factor, because we’re dedicated to it being completely our local teams.
“Our entire organization in Tanzanian is Tanzanian. Our entire organization in Nigeria staff is Nigerian. We are completely committed to that. But that does mean we spend a lot of time on social enterprise education for all of our whole staff.”
Zach says he would not be surprised if she is on the stage winning the Zayed Future Energy Prize (now the Zayed Sustainability Prize) one day.
Although the focus of Solar Sisters is homes, households, and villages as with WE CARE Solar, this renewable, clean energy finds its way to health care. Solar Sisters also provides light to clinics, well aware that darkness can mean death in clinics.