what makes us tick

Microfinance + Clean Energy = Energy Lending

As of 2009, hundreds of thousands of Solar Home Systems (SHS) have been installed throughout the world. These systems have helped to fill a glaring void in the lives of the world’s poor – lack of access to affordable, reliable, clean electricity. In addition to the cost-savings generated by switching from low-quality fuels to electricity, it is well documented that access to electricity in low-income areas leads to the improvement of numerous socioeconomic indicators, such as increases in small and micro-enterprise income and productivity, improved quality of education and gender equality.

Despite the declining cost of renewable energy generation, the affordability of efficient end-use technologies, and the growth of global manufacturers producing them, there remain a staggering 1.6 billion persons without access to any electricity at all. Many more have access to public or private electricity, but such access may be extremely limited – 2 to 4 hours a day – and unreliable at that. The key problem then is not simply the technology itself, but the lack of a model to provide electricity to these persons.

In Haiti, only 158,000 households have metered electricity connections. It is estimated that an additional 130,000 use illegal connections. This leaves some 70% of households throughout the country without any electricity access at all.

Energy lending represents a vital component of one model to provide electricity access to the world’s poor. This model combines modular energy technologies designed for single-household use (such as SHS) with microfinance. A key innovation in this model is a loan structure where the monthly customer payment is roughly equal to what customer households would have otherwise spent on energy.

Energy Lending Pilot for Solar Home Systems
EarthSpark International is working with Fonkoze, Haiti’s premier Microfinance Instution, on the details of a pilot Energy Lending program at the Les Anglais Clean Energy Store. We will be using Fonkoze’s rigorous standards of client appraisal and have adopted Fonkoze’s business loan product to suit the financing of the Solar Home Systems.

Based on the results of EarthSpark’s 2008 survey, 28% of households with businesses in Les Anglais already pay more than the monthly SHS loan payment on kerosene and candle-based lighting for their home and business each month.

EarthSpark International Engineer Peter McPhee, and Advisor Robert Lange, Ph.D. will be conducting a two-week training workshop in Les Anglais on the siting, installation and maintenance of the Solar Home Systems. This workshop will take place concurrent with the arrival of the SHS shipment at the store. Workshop participants who receive certification from EarthSpark will be contracted by the store to install the SHS and conduct service visits every four months.