Two billion people worldwide, living mostly in poor and remote rural areas, have no access to electricity. Shell Solar is bringing solar electricity and equipment directly to remote households, on commercial terms in six developing countries.
In Sri Lanka a typical solar electricity system powers five lights and sells for around $500. With 10,000 units sold by Shell Solar the benefits have included:
- 300 new jobs, mostly in rural areas.
- Reduction in undesirable emissions by displacing kerosene lamps and diesel generators.
- Bright light, making reading, education and cooking easier.
- Convenient power to connect with the world via TV and radio.
Sri Lanka is important because this commercial distribution model works, reaching break-even in 2001– a first for Shell and a watershed for the industry. Two barriers were overcome: availability of systems and the capacity of householders to pay. Partnerships with the World Bank, Sri Lankan government and Global Environment Facility encouraged sellers to set up business and a local cooperative (SEEDS) to offer credit to householders. A subsidy per unit was used by sellers to offset credit risks, cover operating costs or reduce selling prices. With sellers and credit in place a competitive market flourished, demonstrating the power of partnerships in conjunction with appropriate subsidies.