Friday, May 29, 2015

Solar Sisters: How This "Avon Lady" Model Of Solar Distribution Has Taken Off

Solar Sisters: How This "Avon Lady" Model Of Solar Distribution Has Taken Off

Women are earning side income from the project and spreading solar products in areas where power is lacking, but Solar Sister as an organization still relies mostly on philanthropic support.

Solar Sister is a social business that uses an "Avon Lady"-type model to distribute solar equipment in Africa. It's been operating for more than five years and now works with about 1,500 women entrepreneurs in three countries. The women buy solar lamps, solar phone chargers, and solar panels at cost, then mark up the items at retail, pocketing the difference. Solar Sister provides training and support, helping the saleswomen reach their goals.

As part of our new series checking in on projects we've written about in the past, we spoke with CEO Katherine Lucey. She talked about the challenges the company has faced in that time and how Solar Sister hopes to continue to grow.

Lucey founded the business on the premise that women are the family members most likely to use solar equipment. In Uganda, Tanzania, and Nigeria, they're the ones who currently buy kerosene for lighting and see that their kids have enough light at night to do homework. After that, it also seemed logical that the best people to sell to women would be other women.

"We thought the way to reach women was for one woman to tell another woman 'I use this at home,'" Lucey says. "She can talk to her cousin, her friend, her sister with real authentic understanding of the benefits. There is a trust there, and a network."

This story is part of our series, How's That Working Out For You, where we check in on projects we've covered in the past to see if they've come to fruition, or turned out to just be vaporware.

The entrepreneurs normally start by selling to their families, then branch out to others locally. Typically, the money the women make—anywhere from $10 to $200 a month—isn't enough to live on completely, but it can be transformative.

"This is marginal income, but even at smaller amounts, we know it makes a difference in their lives," Lucey says. "This is one of the few big cash opportunities these women can pursue. Many of them are small-scale farmers and their income in seasonal. They make a bit of money twice a year when they're harvesting crops, but then the rest of the time, they're cash-poor."

The Solar Sisters are bit like Uber drivers. They work when they want to, and at their own pace. Lucey says about half of the 1,500 entrepreneurs are active at any one time. The business seems to have quite a high turnover rate, but Lucey says that's normal for an Avon-type operation, and that a lot of women have been with the network from the beginning.

The model works differently depending on the country. For example, in Uganda and Tanzania, the $8 to $10 solar lamps are the most popular items. In Nigeria, customers are more likely to buy the higher-output systems. That's not a function of higher incomes in West Africa. Nigeria has more un-electrified people than any other African country and Solar Sister's customers are similar to those in East Africa. The difference is more cultural.

"There's a big gap [in Nigeria] between the people who have money and the people who don't and that inequality gap can actually cause some market disruption," Lucey says. "You've got people [for whom] this product would be really interesting, but they have aspirations beyond the scope of the product. There's more affluence and visible consumption, so they set their sights higher."

As an organization, Solar Sister generated 18% of its operating income from commissions on the sales in 2014; the rest came from philanthropic grants. That's up from 8% in 2010. Last year, it had revenues of $1.4 million, from about $140,000 four years earlier. Lucey hopes eventually to fund everything from the business, though that might take a while and it will have to continue on donor largess.

Solar Sister plans to launch in Kenya this year, a natural progression after Uganda and Tanzania. It hopes to reach five countries by 2020 and have a total of 5,000 entrepreneurs trained-up. In a way, though, Lucey is agnostic about how the model spreads. If other groups want to copy its operation, that's fine.

"When I think of expansion, it's to expand the mission of Solar Sister, which is to get clean energy to as many people as possible and making sure women are a part of that," she says. "We can expand the broadest by being a great example of a business model that is inclusive, grassroots and effective and then have other people say 'we can do that as well'."

Ben Schiller is a New York-based staff writer for Co.Exist, and also contributes to the FT and Yale e360. He used to edit a European management magazine, and worked as a reporter in San Francisco, Prague and Brussels Continued


May 27, 2015 | 8:56 AM

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