Case Study in Laos: Bringing Solar to the People

As recent years have shown, social entrepreneurship in the developing world doesn’t have to come from philanthropic behemoths such as Google or Microsoft—they can start right at home in the grassy steppes, rainy jungles or dusty cities. Case in point: Sunlabob’s solar initiative in Laos, which has brought solar lanterns, panels and even entire grids to villages that have never before seen electricity.

Sunlabob Rural Energy Systems wasn’t always a supplier of electricity to the disadvantaged poor. The Laos-based company started out in 2001 supplying solar panels and electricity equipment to corporations and off-grid development projects. But somewhere along the way the company realized that, with more than 50 percent of Laotians living off the grid, the market for reliable electrical services in the rural villages was much larger than the market for the commercial projects they had initially focused on.

Indeed, the rural villagers cannot afford Sunlabob’s solar systems, most of which cost at least $500 (if only solar systems were so cheap here!). Instead of donating or selling their products, however, Sunlabob leases them out to households or groups of households. That way, the villagers can enjoy using electricity in their homes and walking around at night with the aid of solar-powered lanterns, with rental fee—in some cases as low as $3-5/month—being distributed among several people. As 74 percent of the Laotian population lives on less than $2 a day, these households’ newly-obtained electricity becomes not only affordable, but also a great step up from the kerosene or wood they used to use—if they could afford it.

To date, Sunlabob operates over 3,400 household systems, with 17 leasing franchises—which are composed of technicians who market, install and repair the solar systems—in eight of Laos’ 17 provinces. It started out with a $150,000 grant from the World Bank in 2005 to essentially subsidize 120 solar equipment units and train franchises in one province. Now, Sunlabob needs no outside subsidies to provide electrical services to rural Laotians.

I can’t tell you how profitable the venture is, but if you have more than 3,400 household systems running, with 17 franchises, then you’re probably doing something right. Of course, this model isn’t entirely feasible in the developed world—costs are higher, systems are bigger (we, dependent as we are on technology, need electricity to do more than just light our homes—we demand a lot of electricity to live happily) and infrastructures are different. If taking exams has taught me anything, it’s that it’s a easier to go from bad to good than it is to go from good to great.