An estimated 1.6 billion people worldwide have no access to electricity. An untold number of others live with electricity that is erratic and of poor quality. How can electric power be brought into their lives when the centralized utility models that have evolved in developed nations are not an economically viable option? Small-scale Distributed Generation (DG), ranging from individual solar home systems to village level grids run off diesel generators, could provide the answer, and this book compares around 20 DG enterprises and projects in Brazil, Cambodia and China, each of which is considered to be a "business model" for distributed rural electrification.

While large, centralized power projects often rely on big subsidies, this study shows that privately run and localized solutions can be both self-sustaining and replicable.  The book's three sections provide a general introduction to the issue of electrification and rural development, set out the details of the case studies and compare the models involved, and discuss the important thematic issues of equity, access to capital and cost-recovery. Zerriffi shows that in each case, it is not simply a matter of matching a particular technology to a particular need. Numerous institutional factors come into play, including the regulatory regime, access to financial services, and government/utility support or opposition to the DG alternative.

Abstract:

Burning of biomass for cooking is associated with health problems and climate change impacts. Many previous efforts to disseminate improved stoves – primarily by governments and NGOs – have not been successful. Based on interviews with 12 organizations selling improved biomass stoves, we assess the results to date and future prospects of commercial stove operations in India.

Specifically, we consider how the ability of these businesses to achieve scale and become self-sustaining has been influenced by six elements of their respective business models: design, customers targeted, financing, marketing, channel strategy, and organizational characteristics.

The two companies with the most stoves in the field shared in common generous enterprise financing, a sophisticated approach to developing a sales channel, and many person-years of management experience in marketing and operations. And yet the financial sustainability of improved stove sales to households remains far from assured. The only company in our sample with demonstrated profitability is a family-owned business selling to commercial rather than household customers. The stove sales leader is itself now turning to the commercial segment to maintain flagging cash flow, casting doubt on the likelihood of large positive impacts on health from sales to households in the near term.