Our Solar Integrated Development (SID) Model

What is SID

With the vision of powering a brighter 21st century SELF provide revolving credit loans, and multilateral development bank support. It also oversees technology transfer, establishes "in-country" joint ventures and “for-profit partnerships” and provides technical assistance, and youth training

Major components of the SID model

• Maximum community participation and ownership
  The project flows from the needs and leadership of the community. The community is empowered by full participation in all project phases including design, implementation, monitoring and evaluation. The community is fully committed to supporting the project.
• Strong Local Partnerships
  A competent and committed local partner is critical for both the implementation and the sustaining of the project. The local partner may be an existing organization or one created for the project. It may be a community group, co-operative, women’s group, NGO, a government unit or a private enterprise. The local partner is charged with sustaining the project. SELF works along side local partners and builds capacity when needed.
• Beneficiaries take financial responsibility for the service they receive
  Depending on the project, beneficiaries of solar-electric systems participate financially by either purchasing the system or by paying a fee for the use of electricity. Experience has shown that users with a financial stake in the project value the service more and take better care of it. Financial participation of the beneficiaries spreads development funds further to help more people.
• Financial mechanisms can and should be used to enable affordability and sustainability
  The most common barrier to solar electrification is the perception of a high initial cost. In effect, purchasing a solar-electric system is purchasing 20 years worth of energy production at a known cost. A variety of financial mechanisms allow individuals, communities and governments to afford solar according to their abilities to pay. The most common modalities used are:
  - Cash sales – Outright purchase of systems
  - Micro-finance – Low initial payments and long repayment periods. Often, a
  revolving fund is established so that additional systems are continually purchased.
  - Fee-for-Service – An energy service company (ESCO) owns and maintains
  the system for a fee. The capitol cost of the system is born by the ESCO, or is
  often donated.
  In all modalities, funds are collected for operation and maintenance of systems.
• Gender equality is promoted
  In recognition that women are commonly disadvantaged, under-supported
  and are often the best managers of household resources, special effort is
  made to include women both as implementers and beneficiaries of projects.
• Push the frontiers of productive end-uses that can be catalyzed by renewable
  energy
  SELF projects demonstrate the effective use of solar energy for health clinics, schools, communications, water pumping for drinking and for agriculture, micro-enterprise, street lighting, and for productive home uses. In most cases, people who have not had electricity also do not have devices that use electricity. Beyond providing electrical energy sources, we also provide targeted applications tools and hardware such as compact fluorescent lights, sewing machine motors, oil expellers, vaccine refrigerators, water pumps, computers and barber clippers – often through microfinance means, so that community members can immediately apply electrical energy to productive uses. The goal is not simply that people have electricity; it is that they immediately benefit
  from having electricity. There is a commitment to develop and promote additional technologies and systems such as solar-assisted micro-irrigation, crop-processing equipment, internet connectivity, telemedicine and commercial applications to help broaden the scope of enriching communities with solar generated electricity. SELF actively seeks partnerships with other organizations that can collaborate on creative uses of renewable energy. SELF evaluates and if appropriate, adopts new energy-related innovations such as LED lighting, fuel cells and improved solar components so that projects benefit from the most reliable and cost-effective equipment. SELF acknowledges that there are different optimum energy solutions for different projects. Although the core technology we work with is solar-electric generation, we are also able to work with micro- hydro and wind either alone or in combination with solar and
  also with solar-diesel hybrid systems.
• Strong focus on sustainability
  SELF allocates time and resources to make sure the following areas of sustainability are fully addressed to ensure the long life of a project:
  - Financial provisions - Enough funds are collected and managed to operate and maintain the systems.
  - Technical ability - Local men and women are trained to both install and maintain systems. A store of spare parts is part of the initial project funding. Local partners are assisted in establishing a supply chain for continuing purchase of spare parts.
  - Organizational capacity - Local partners are assisted in developing the capacity to manage the financial and technical aspects of maintaining the project.
  - Follow-up - Because aspects of project management may be new activities for local partners and communities, time and resources are allocated for continued assistance and capacity building for one to two years after installations are complete.
  - Design to last - Great care is taken in system design and equipment selection to ensure systems that are simple, reliable and easily maintained.
• Projects are replicable and scalable
  Solar-electrification in the development context has been well demonstrated and established and is now ready to provide widespread benefit in developing countries. SELF projects are designed to grow from local projects to larger regional and national projects. To facilitate expansion, projects are designed within official national and regional development frameworks and relationships are established with the governments and institutions that play a role in scaling up.
• SELF-developed energy sources support healthy local and global environments
  In recognition that it is often the poor that suffer most from degraded environments and poor environmental practices and that the world cannot sustain the electrification of nearly two billion people through polluting and oil-consuming means, SELF is committed to energy solutions that preserve both the local and global environments.
  SELF seeks to leverage environmental benefits by receiving carbon off-set credits to help fund and expand solar-electrification projects. SELF finds opportunities for clean renewable energy to support other environmental endeavors such as the wildlife conservation programs it has supported with solar energy in Bhutan and Tanzania.
  
• Project results and learning are disseminated to the largest possible audience
  With conviction that awareness is the first step towards solving a problem, SELF educates supporters, funders, colleagues, other interested parties in the development community and the general public through articles, websites, speeches, conference presentations, reports and newsletters. SELF seeks and achieves maximum exposure for accomplishments and lessons learned on its projects through international venues such as international CNN segments and recognition through international awards.
  

SELF’s Role

SELF typically functions as project manager or implementer by playing a leading role in the following tasks:

• Bringing partners/participants together
• Listening to the community and local stakeholders through meetings, surveys and interviews
• Helping to frame the possible interventions
• Presenting options, formalizing project design
• Proposal writing
• Coordination of project funding
• Technical design of photovoltaic systems
• Procurement of project equipment
• Training of solar technicians
• Installation management
• Local partner relations
• Capacity building of local partners
• Evaluations and reporting

Financing

In every country, there is some form of rural credit, and farmers make payments for services and goods in multiple ways. What is constant, however, is that rural farmers are non-transient and are attached to their community and to their land; they are generally not credit risks because there is community, societal and cultural pressure to remain solvent, however poor, and to honor one's debts. This has been proven over the years by the experience in Bangladesh where the Grameen Bank realizes a 99% collection rate among its borrowers--who are the very poorest members of rural society. It is a fact that poor rural people pay their bills.

SELCO-India has achieved a 100% cost recovery rate in rural South India through a combination of payment schemes: using low-interest World Bank funds borrowed by SELCO to refinance farm cooperatives' collective purchases of SHS; providing SHS to farmers who borrow directly from branches of Indian banks (Syndicate Bank, for example, has 1600 branches, mostly in rural areas of the South) with the bank paying SELCO the full amount and undertaking collections themselves; and providing short-term credit and cash sales to farmers directly, with collections made by SELCO staff in the field.

SELF's pilot solar project in association with the Vietnam Women's Union confirmed the ability of apparently poor farmers in remote areas of the Mekong Delta to pay for PV. Their monthly remittances are forwarded to the district level, then to the provincial level, then on to Hanoi, where the local currency is converted to dollars to import more solar hardware from the U.S. Cost recovery in one province has been 100%. The Vietnam Women's Union reaches into every community in Vietnam.

Village solar cooperatives have been organized by SELF in Sri Lanka, where local managers collect monthly payments on 3 year hire-purchase schemes and remit the funds to a local bank. These revolving credit funds are then recycled by the community to purchase more systems. Collection rates in two SoLanka village projects in Sri Lanka averaged a less than 1% default rate after 3 years. A larger program in Sri Lanka, in association with a country-wide development organization known as the Sarvodaya Shramadana Movement, experienced a 95% loan repayment rate in its initial solar program sponsored by SELF.

SELF maintained a revolving credit fund for SHS in the farming areas of Gansu Province, China through its non-profit affiliate Gansu Solar Electric Light Fund (G-SELF). SELCO's joint-venture partner Gansu PV Company is manufacturing and marketing SHS to Tibetan Herdsman on a cash basis. (In Gansu Province alone there is a potential cash market of 150,000 unelectrified herdsman able to afford electricity.)

SELF completed a pilot project with Sudimara Energi Surya in Indonesia to study village solar service revenue collection. Cost recovery through Sudimara's Solar Service Centers, where people come to make their monthly payments, is over 99%. A late fee is imposed and collection agents visit houses directly within one day of a late payment; there are few defaults for the simple reason that people don't want their electricity "turned off" (i.e. their solar module or entire SHS removed).

SELF has proven that rural people in developing countries can and will pay for solar-generated electricity.