Renewable Energy Must Think Outside the "Sector" Constraint

The convenience store in the center of Kiptusuri acquired a solar lighting system and can now stay open at night. Photo courtesy of The New York Times.

The New York Times: African Huts Far From The Grid Glow With Renewable Power

Increasing demand for home-sized renewable energy infrastructures in cost-inefficient, off-grid areas is offering another challenge to business innovation and social advancement. The market exists and is growing, but how should businesses make full use of this opportunity to penetrate and establish its presence so as to reap early-entry advantages?

Drawing inspiration from Muhammad Yunus and the Grameen Bank's efforts in Bangladesh, a far-sighted enterprise should not be daunted by the energy needs of these areas, but should try to leverage on this gap and allow profit-driven innovations to improve the lives of villagers in these various areas. One conceptual obstacle that has impeded progress in this area is the inability to "think out of the sector".

Theoretical constraints, although useful as a hypothesizing platform, should never restrict the creative element required to innovate. In this particular case, there is immense potential for solar energy companies to start-up food and/or technology businesses that will utilize their panels. Centralization of services such as refrigeration, mobile-charging, and education premises as well as agricultural or mining-related technologies such as grain husking and ore sieving not only creates a stable demand for energy infrastructure but also introduces technological innovation that help villagers reap economies of scale.

Early branding is also very important, and it will not be difficult for energy companies to find willing partners in other industries to invest in small joint ventures like that. The positive effects of branding cannot be measured by accountants, and yet can bring immense value that outweighs the initially small profits of early market penetration.

Energy companies can learn a thing or two from the fast-consumables market: Look beyond supplying direct demand and create or support indirect demand. And why not, when in doing so one provides a service to mankind and move forward a step in eliminating poverty?