Solar lanterns to light up millions of powerless homes—will GreenLight Planet be able to deliver?

In the realm of renewable energy, India is currently doing rather well in both hydro-electricity and wind power. Today, India has an installed capacity of 30,000 MW hydro-electric power, which is approximately 20% of the estimated total capacity. Similarly, India’s installed wind power capacity is 8,000 MW, which again is approximately 20% of the estimated total capacity.

However, in solar power the picture is very different. At this time India’s total installed solar power capacity is a meager 100 MW, which indicates that solar power has not even begun to scratch the surface. The game stopper here is the capital cost of the equipment, which includes the solar panel comprising photo-voltaic cells, storage batteries and high lumen yet low wattage LED's. There are other challenges as well. For example, the equipment must be rugged enough to withstand the vagaries of the weather and have a long service life.

Due to its high capital cost, today, it is widely acknowledged that solar power is financially unviable without adequate subsidy and tax breaks from the government.The question is: Does the Indian government offer sufficient subsidy and tax breaks on solar power. The answer is clearly, No. Otherwise, the installed solar power capacity in India would not have been a miniscule 100 MW.

But there is still hope. GreenLight Planet a venture promoted by three young entrepreneurs and funded by Dr. Prabha Kant Sinha, hopes to deliver commercially viable solar lanterns to remote powerless villages of India and Africa. Dr. Sinha, a distinguished alumnus of IIT Kharagpur and of MIT, a former associate professor at Kellogg, and the founder and co-chairman of sales and marketing consulting firm ZS Associates, does not require much of an introduction. He shared his thoughts with fellow alumni of IIT KGP at an interactive session at the Institute’s Salt Lake Centre in Kolkata on 15 July 2010. In that interaction, aside from solar lantern, he also talked on the establishment of P. K. Sinha Bio-fuel Research Centre at IIT KGP on which I wrote in my blog post on 16 July 2010. So, in continuation, in this post I will write only on solar lantern.

The mission of GreenLight Planet is to combine, and I quote from their mission statement, “cutting-edge technology with innovative distribution networks to  commercialize low-power LED lanterns”. Their “new lights are bright, long-lasting, and practical. But more importantly, they are affordable enough that villagers can purchase them immediately in cash, meaning the technology can profitably scale to help hundreds of millions”. The photo here (borrowed from the website of GreenLight Planet) shows a comparison between a kitchen dimly lit by kerosene lamp, and side by side, the same kitchen more brightly lit by solar lantern. GreenLight Planet calls these solar lanterns Sun King, which is a trademarked name.

But there are several challenges. Dr. Sinha used the occasion to bounce the related challenges off the fellow alumni who in turn responded with the sagacity that is the hallmark of IIT’ians. The challenges are threefold: One, to reduce the capital cost by using technological breakthroughs; Two: to reduce the distribution cost, and Three, to market the idea of solar lantern to the end users. The three young entrepreneurs and Dr. Sinha are wholly aware of these challenges and are continually working at meeting them frontally.

Dr. Sinha who is a globally acknowledged expert on sales and marketing, put the chances of success of this new venture at 50:50, which, to my mind, is rather modest considering that the company has already invested a fair amount of money. When I asked Dr. Sinha whether there was any new technological breakthrough in the offing, he avoided a direct response, and I didn’t pursue. I very much hope that soon there is some technological breakthrough that would reduce the capital cost. [Photo shows a part of the gathered alumni; in the front row: Dr. Sinha, Biswajit Choudhuri,  President of IIT KGP Alumni Kolkata Chapter and, formerly, Chairman of United Bank of India, and Hirak Sen, that's me].

It occurred to me that organizing a vast distribution network in remote areas from scratch is a humongous task. Instead why not GreenLight consider partnering with an FMCG company like, for example, ITC, which already has an established distribution network, and additionally, ITC’s computers at the village Chaupals could come handy in reducing the inventory. Dr. Sinha appeared to be receptive to the idea. 

I also took the opportunity to cite the case of another solar power venture. This one is doing exceedingly well. SunRun is a three year old company based out of San Francisco. It offers home upgrading to solar power in dense urban areas. Their business model works like this. The company installs solar power equipment on individual home rooftops, at the company’s own cost and expense, and in lieu of using part or whole of the rooftop it gives a certain kwh to the homeowner free of cost, and sells the surplus power to the city power grid.

As with most solar power ventures, on its own, this model is also financially non-viable. But SunRun astutely leverages the tax breaks that the government offers on solar power in the US and makes attractive profits. It has recently raised a substantial amount from the market to finance further growth. So clearly tax incentives in the US are delivering the desired results. But it is not so in India, at least not yet.

10 children studying around one solar lantern in a powerless village

Therefore, we keep our fingers crossed and hope that GreenLight succeeds. It is highly encouraging that GreenLight has received favorable reviews in the media—WSJ, The Economist and Indian Express, among others, have lauded their efforts. Additionally, Sun King has recently received an award in the US for innovative design competing with many other contenders globally. Thus we have high hopes on GreenLight and the audience of fellow IIT’ians all hoped that Dr. Sinha and the three young entrepreneurs succeed in their venture of lighting up the powerless millions at a cost they can afford. And, sooner it happens the better. [Photo: courtesy Prabha Kant Sinha].