Making clean energy affordable far from the city


October 30, 2013

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    Kyla Yeomen/Mercy Corps  </span>
    Most households in rural Uganda cook using open wood fires that strain the environment and emit smoke that causes extreme health risks. Clean cookstoves are a safer, efficient alternative for families. Photo: Kyla Yeomen/Mercy Corps

Many families in rural northern Uganda face numerous health and safety issues from using kerosene for light and open fires for cooking. They should be rushing to buy fuel efficient cookstoves and solar units.

Why aren't they?

I met Evelyn — a shop owner in Kitgum, a rural district in northern Uganda — this past summer, having just arrived for my internship with Mercy Corps. From the look of her store — full of general merchandise, food and cold beverages — it wasn’t readily apparent that she also sold solar units.

But one unit, tucked in a far corner, did catch my eye. The box looked as though it had been opened and closed many times as potential buyers expressed interest — just not enough to take the unit home.

My job in Kitgum was to research financing plans that would help retailers in rural areas, like Evelyn, increase their sales of solar products and reach the vulnerable households that would benefit from the products most.

I had made the seven-hour drive from Uganda’s capital, Kampala, to Kitgum earlier in the week. Along the way I couldn’t help but notice the visible impacts of the long-standing conflict between the Ugandan government and the Lord’s Resistance Army. Our car bumped and lurched over the unmaintained road as we passed one neglected building after another.

But it was my day-to-day interactions with shop owners in Kitgum that revealed the less visible impacts of the conflict: the traumatic memories and the struggle to keep markets functioning.

As I talked with Evelyn, a bright-eyed and poised young woman, she recalled the poor sales record of her solar products — solar lanterns and mobile phone charging units — since she began selling them a few months before. On average, she sold just one unit per month.

Evelyn said consumers were not fully aware of the long-term benefits of solar units, including the cost savings, and were unsure of its ability to function properly over time. And the price tag of about 130,000 Ugandan shillings ($50 USD) was certainly cause for concern for many of her customers, considering the average monthly income for rural households in northern Uganda is just 117,000 shillings ($46 USD).

As we listened to Evelyn and other retailers’ concerns, we determined that we needed to come up with tailored, innovative financing plans that would build consumer awareness, make solar products more affordable and help shopkeepers increase their sales.

Our team developed five plans that shop owners could offer, including pay-by-installment, a free trial, a price discount, and a free related product, like charcoal, with purchase.

Evelyn saw opportunity in offering consumers a free one-week trial of a solar unit, plus the ability to pay for it in installments if they chose to keep it. This plan addressed consumer trust with the free trial period and acknowledged consumer cash constraints by offering the option to pay over time.

Eager to promote her solar products, Evelyn distributed all of them during the free trial — and once she collected the outstanding payments she immediately reinvested her profits in more solar units.

Even with the financing plans, many families in Kitgum didn’t have money to allocate to solar products in addition to food and basic necessities. Despite these challenges, shop owners, including Evelyn, continued promoting the plans — they said they couldn’t wait for the most opportune time to strengthen their business.

After our research in Kitgum came to an end, Evelyn enthusiastically kept up the sales program. “With or without this research, we will continue with these offers,” she said. “Because they have worked for us.”

It’s forward-looking retailers like Evelyn who help improve the health and livelihoods of families in rural areas by making clean energy products accessible in the hardest-to-reach places.