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SDC12444

Bangladesh Hits 1 Million Solar Home Systems

This article by Justin Guay highlights some important points, particularly with regard to how Grameen Shakti’s success challenges many strongly held views regarding renewable energy such as:

1. PV is still not financially viable- PV is financially viable. Grameen Shakti as a company has been self sustaining since 2000 and individual customers have recouped their investments in less time than initially expected due to the sharp increase in the price of kerosene during the last few years.

2. PV is too expensive- The majority of Grameen Shaki’s customers earn less than USD 1900 per year. If they are able to purchase solar home systems (SHSs) without receiving any direct subsidies, why not customers in other countries with higher income levels? The secret to their success is offering a variety of customer credit and repayment schemes that are specifically designed to be affordable to a rural population with meager savings and constantly fluctuating income.

3. Decentralized energy is not financially viable- In isolated rural areas with low population densities, grid expansion may not be financially worthwhile. In such places, decentralized technologies such as SHSs are a way to catalyze new income generating opportunities and improve the general standard of living.

The ultimate lesson according to Guay is that ” Bangladesh is the world’s demonstration case for an off-grid clean energy access plan that delivers.”

As an observer of the Grameen Shakti phenomenon, what I find particularly interesting is that socio-cultural factors, which are usually a barrier to the deployment of new renewable energy technologies in other countries are actually working in Grameen Shakti’s favor.  The patron client relationship upon which political order in rural Bangladesh is based has helped Grameen Shakti attract new clients as the company initially targeted highly respected and influential members of rural communities, which helped the new technology gain the acceptance of the general rural population.