The goal of this periodic blog (EfD) is to promote information exchange on access to quality energy services in developing countries including renewable, modern, biomass and household energy.

Friday, May 7, 2010

Promoting Solar Home Systems and Improved Biomass Stoves: A Comparison

Solar PV Adoption by Herders, Qinghai, China
Photo by China REDP Team
Over the past 15 years strategies for solar home system promotion have moved from a niche activity to the mainstream. Recently I have been thinking that there are quite a few similarities in the obstacles that were faced by solar homes system in the early years and those confronting the new improved biomass stoves today. I thought it might be a good time to explore what we have learned over the years, and what lessons might be relevant for scaling up the adoption of improved biomass stoves.

Both solar home systems and improved stoves are used primarily for household energy services such as cooking and lighting. They both provide significant improvements compared to the kerosene lamp or an open fire. Both devices also involve fairly large initial costs that are barely affordable to the majority of populations in developing countries, but the cost to operate them is fairly low. Solar home systems cost on the order of US $200-$300 and the new generation of improved stoves range from US $10 to $70 or more. As the old joke goes “Solar (read that renewable) energy is free, but it ain’t cheap.”
 
Today solar home systems are considered fairly mainstream and adoption levels though still somewhat limited are rising quickly in many countries. With the exception for the older large programs such as china, progress is being made by improved biomass stove programs, but they also have quite a long way to go to be accepted on a large scale in more countries.

Much more below the break....

So what can we say is the reason that both countries and international donors have no reservations about supporting solar home systems, but they have been somewhat tepid towards improved biomass stoves? To understand the reason for these different perceptions of these programs, it never hurts to examine a bit of history. Oversimplifying a bit, the first solar home system projects established over 10 years ago were mostly small pilot projects. With limited exceptions, they were more oriented towards installing systems with hefty subsidies for lucky villages. There was little market development or poor after sales support for these solar home systems. In fact, I remember one solar home program in a not to be identified country in which systems were given free of charge to most households in a community, and they were subsequently sold off by the villagers for cash. At least this proved the new buyers had a willingness to pay for those systems.

After this stage, in the early part of this decade renewable energy became quite popular among development agencies, and there were very serious efforts to scale up the promotion and marketing of solar home systems through the private sector. The small pilot programs began to grow. The idea was that retailers would be supported and provided incentives to sell solar home systems on credit with partial subsidies. This was the so-called department store or Sears model. Over time it became clear that the retailers were more interested in selling solar home systems for cash. Companies selling systems were mostly small retailers that were not too thrilled with the prospect of chasing around the countryside to collect monthly or bimonthly loans or fees. The one exception was in China where retailers were provided incentives directly.  They sold over 400,000 systems it the northwest part of the country.  Also, during this period there was a similar effort to scale up efforts through private energy service companies (ESCOs), some of which would charge fees for service spreading costs over a longer period of time. ESCOs were somewhat more successful, but never caught on in a big way.

Sri Lanka Retail Store Solar Lighting by Dominic Sansoni
Today there is a new approach to promoting solar home systems that has resulted in the adoption of them on a much larger scale. This is the approach followed by countries such as Bangladesh which is coming close to selling 500,000 systems and Sri Lanka that has reached 60 thousand systems.

Even though the approach followed in these countries is somewhat complicated it seems to work quite.  There are three basic actors necessary for promoting systems under this model. The first involves institutions managing energy funds that can provide financing . Generally they also help with technical assistance and the establishment of system standards as a requirement of the loan. The second actors are microfinance or nongovernmental organizations whose role is to organize demand, provide customer support, and collect loan payments. Finally, solar home system retailers sell equipment for cash and provide product guarantees. The advantage of this approach is that all involved have important roles that play to their strengths.

Media Campaign for IDCOL Solar PV Photo by IDCOL
Now let’s take a step back and think about how this model might apply to improved biomass stoves. Remember at this point this is more speculation on my part rather than a tried and true approach. But it seems to me that if biomass stoves are to transition to a new model of product manufacturing and distribution, they should learn the lessons of solar home systems.

In many countries there are already either rural development or energy funds that could be directed towards improved stoves under the right conditions. This is the case in countries as diverse as Mali and Bangladesh. These funds commonly run by local development banks or specialized energy units. They have the ability to blend both loans and subsidies and provide them to qualified organizations. They are responsible for setting quality standards because they do not want to loan out money for systems that fail before the loan is collected. The NGOs are responsible for marketing and in many cases financing stoves over a period of time. They certainly would be happy to accept technical assistance money to develop awareness campaigns, something which they are quite qualified. The manufactures can then promote their stoves both through private retailers and partnerships with NGOs to reach people that cannot afford the upfront costs of these technologies.

Oh if it only would be so easy. The above approach assumes:

  • Loan funds administered by a financial group or specialized subgroup can be used for financing improved biomass stoves;
  • There are acceptable standards for the stoves;
  • Technical assistance funds are available for publicity campaigns, market development and business plan preparation;
  • Microfinance groups and NGOs are interested in promoting improved stoves;
  • Stove manufacturers and retailers can make available their products and guarantee them; and
  • Last but not least households perceive a high quality and benefit difference between the new stoves and their old ones.
Well these are just some of my current thoughts. Does it sound like a plan? Is it feasible? Am I forgetting anything? Are there other models that can be scaled up that are better? Should we be satisfied to hobble along with the current pace of stove adoption? What do you think?   Leave your comments.

1 comment:

Ann said...

I'd agree this needs more rigorous debate. If I had to choose between an improved fuelwood stove and a solar home system to make an impact on poverty, where I've worked, the former would be infinitely more successful. I've seen far too many SHS programmes where the principle beneficiary was the donor or sponsor. If, in essence, a poor rural consumer receives only better lighting from an investment, the outcome is often merely better illuminated poverty. For a fraction of the cost of an SHS, that consumer could have two or three solar lanterns; you can take them to the kitchen, the outhouse, the animal barn, do you homework, tend to the sick or elderly with much more flexibility that a solar home system affords. And there are cheaper ways to give access to radio or TV. Though the common opinion is that as solar pv is renewable, it must be good for the environment, people tend to forget the energy debt with which it was commissioned.

Though an improved stove also carries an energy debt, it is generally lower. And the fuel can be not only sustainably managed, but on its way from sapling to fuelwood, is absorbing CO2. Fuelwood stoves are often culturally congenial, and in many climates, do not generate 'waste heat' - to the contrary, they are the centre of warmth and sociality, as well as food preparation. My personal favourite design incorporates a watertight sleeve around the flue, equipped with an aperture into which to pour water, and a small tap to drain it. Instant tea, in many societies where a cup of tea is the obligatory small change of social interaction. An improved stove will still save a good deal of time, effort and wood, while being cheap, easy to accept and low to no maintenance. Coupled with a solar radio and lantern or two, and still cheaper and easier to manage than an SHS which cannot give the same functionality, it's a good intermediate option for poverty alleviation.