In recent years, there has been a significant increase in activity to provide energy to low-income households and communities in developing countries, through micro-grids and other methods. Unfortunately, beyond LED lighting and mobile phone charging, there has been limited practical exploration of how access to energy can improve the lives of people in developing countries. While studies have shown some improvement in people's lives as a result of this increase in access to lighting, there have been few studies evidencing broader improvement due to energy access. Indeed, adoption of renewable energy has been very low in these countries. This low adoption is especially surprising in light of several studies, which have found that energy can represent one of the largest markets within the Bottom of the Pyramid (the poorest households in our global society). Even as organizations working on the energy access issue wrestle with struggling business models for clean energy distribution, we believe a critical portion of the solution lies elsewhere; and it is receiving scant attention.
We believe the primary reason for the low adoption of renewable energy is that there are very few low-energy low-cost products available to-or made for-the poor in developing countries. Energy itself doesn't change people's lives; rather, it is what people use the energy for that does change lives: household appliances, workplace machines, clinical/medical devices, etc. Unfortunately, there is very limited understanding of the many market segments represented by the global poor, and of what types of powered appliances and products might change the quality of their lives (and, ideally, their economic condition). For example currently, more than two-thirds of births in developing countries occur at home, because poor off-grid communities cannot afford to build clinics with expensive medical devices which also require electricity. New low-cost, low-energy medical devices (e.g., solar-powered infant incubators) would make it possible to build clinics at a dramatically lower cost (as low as 10% of current costs). This would allow women to give birth at clinics instead of homes, and the medical devices in these clinics would lead to faster and more effective intervention during birth emergencies. Since these devices could be solar-powered, they would also significantly reduce the need for non-renewable energy.
The low power incubator is something some early research suggests may be appropriate, but this project as a whole is about setting up research to really understand the detailed needs of the BoP market, and then responding to them with innovative design on an ongoing basis. We strongly believe that demand for renewable energy-and the impact of clean energy access-will significantly increase if a new generation of demand-driven, affordable, low-power products were available. A core component of our project is the creation of Innovation Hubs in countries like Kenya and India. Working with key private and public sector partners, these hubs are intended to be centers-of-excellence which can:
(a) conduct ongoing market research on BoP segments, demands and needs
(b) produce low-cost, energy-efficient appliances (in collaboration with supply chain partners)
(c) lend technical expertise to public, private and academic institutions interested in BoP market insights.
Private-sector companies do not traditionally invest in the R&D required to build such products for the BoP, because those markets are highly unpredictable, and because profit margins can be low. As a result, virtually all private sector investments in developing countries are targeting the emerging middle class, rather than the poor. We believe that the market insights we will generate from this project will give private sector companies market intelligence that currently does not exist.