U.S. businesswoman Katherine Lucey is working with a network of women entrepreneurs in sub-Saharan Africa to sell inexpensive, household solar energy systems. In an interview with Yale Environment 360, Lucey explains how solar electricity can transform lives, particularly those of rural women and girls.
For Katherine Lucey, the lack of electricity in many parts of the developing world is not just an economic issue, it is a gender issue. A former investment banker who specialized in financing large-scale power plants, Lucey is the founder and CEO of Solar Sister, a nonprofit that uses a market-based approach to provide solar power to communities in sub-Saharan Africa through a network of women entrepreneurs.
Access to energy is critical to alleviating poverty in Africa, and women must be at the heart of any solution, says Lucey, since they are the family’s “energy managers,” responsible for cooking and heating needs. They may walk miles to collect wood or go to market to purchase charcoal or kerosene, an expensive energy source with severe health and environmental consequences.
In an interview with Yale Environment 360 contributor Diane Toomey, Lucey explains how Solar Sister’s operations rely on selling inexpensive, off-the-grid solar energy systems to households to power lamps and recharge cell phones. Since 2010, Solar Sister has created a network of 401 businesswomen in three countries that have provided electricity to 54,000 people. Lucey says the model can be rapidly expanded and can transform lives. “If we’re going to scale up the solution and really have an impact,” says Lucey, “we’ve got to find a way to tap into market resources and let people in their own communities solve their own problems.”
Yale Environment 360: You were an investment banker specializing in the energy sector. What motivated you to become involved in the issue of “energy poverty”?
Katherine Lucey: I was in the energy sector in investment banking for many years and at that level got to see how fundamentally important energy is for advancement at the country level. When I left banking, I got involved with an organization that was doing philanthropic work on rural access to energy through solar renewable energies in Uganda. I got to see at the household level that the same thing is true. You really can’t rise up above subsistence living and achieve prosperity if you don’t have access to energy. And that’s what really drove me to found Solar Sister and to begin this journey of providing clean energy access through a network of women entrepreneurs.
e360: I understand that the nonprofit that you were working with was putting solar panels on schools and hospitals, which sounds like a worthy endeavor. But you decided to go another route.
Photo credit: Solar Sister. A mother in the Ugandan town of Mityana with a new solar-powered lamp.
Lucey: The organization I was working with is called Solar Life for Africa, and it’s still in existence. It’s a wonderful organization that provides solar electrification for schools, clinics, and village homes. What I saw with that work was both how transformative it is for people to have access to energy, but I also saw the limitations of trying to address what is a global problem that affects a quarter of the world’s population that doesn’t have access to energy through a purely philanthropic model. There’s not enough philanthropy in the world to solve that problem. And so if we’re going to scale up the solution and really have an impact we’ve got to find a way to tap into market resources and let people in their own communities solve their own problems, rather than waiting around for somebody else to come solve it for them.
e360: You say that energy poverty is a gender issue. How so?
Lucey: One of the insights I had while working in rural Africa is that at the household level women are really the managers of energy. They are the ones who walk to market to buy kerosene to pour into their kerosene lamps. They walk miles to collect wood or purchase charcoal. If what we want to do is disrupt that decision process and have the women make a cleaner, safer, more economical choice — to use renewable energy instead of toxic kerosene or burning wood or charcoal — we have to reach the women. So our program reaches out to women right where they are at their household with energy access through this network of women entrepreneurs.
e360: Could you talk about the negative impacts of burning kerosene both on an environmental level and just on a home level?
Lucey: We’re working in rural Africa, particularly in rural Uganda where our program started. Something like 90 percent of the community uses kerosene for lighting. They don’t have access to grid electricity and they’re burning kerosene in small lamps that are not a nice beautiful camping lamp, but they actually look more like a tuna fish can with a wick stuck in it. It’s an open flame. You pour the kerosene in at a small hole at the top and then you light it and burn it.
It’s incredibly expensive — people spend anywhere from 10 to 30 percent of their household income just for kerosene, just for light. It’s unhealthy. Studies have been done recently that show it’s something like smoking two packs of cigarettes per day to be inhaling the fumes from these kerosene lamps. It’s terrible for the environment. Again, studies show that the carbon that comes off of this type of burning has four times more negative impact than previously thought and so the carbon emissions of what is a seemingly small burn are actually very, very negative for the environment. When you replace that with solar, it is cleaner, safer, and less expensive. It’s really free energy. All you have to pay for is the mechanism to turn that free energy into useful lighting.
e360: Tell me about the products that Solar Sister is involved with.
Lucey: We work with a variety of different manufacturers. We are not ourselves manufacturers and by doing that we are able to offer a portfolio of products that’s really best in class and gives our customers full choice as to what they want. So some customers will probably start off with just a very simple lamp, something that is at the lowest price point. And then we have products that offer both light- and phone-charging capabilities. Something like 75 percent of the population has cell phones and only 10 percent of the population has access to electricity, so there’s a big gap right there.
We also have larger systems which are plug-and-play systems. It’s the battery, it’s the solar panel, it’s all the wires you need and all the lights you need to set up a small home system. Maybe you have a three-light system or a seven-light system for your home and you can also run a radio off it, charge up your cell phones, maybe run a small fan.
e360: Your organization uses a direct marketing model to get solar lighting into the hands of these rural women. Local sales women start off with a business in a bag. So tell me what I would find in that bag.
Lucey: We describe ourselves sometimes as the Avon model, using women directly selling to their communities. We recruit, train, and support women and provide them with access to products that have been fully vetted. We provide them access to the working capital financing that they need to get their business started and that’s an important part because most of the women would not otherwise be able to initiate a business. They just don’t have the capital to do that. So everything that goes into getting a business going is what we call the business in the bag.
When they first start up they would have a sample bag of products that they’re buying. And then they are paid for that once they sell their products. They have cash coming in the door and that’s when they pay for it. So that’s how there’s working capital financing in it. And in that bag are a variety of different lamps, cell phone chargers and different products that we carry. They’re able to go out into the market and find out which one of those products is suitable for their market, and what inventory they want to carry, very specifically driven by their own customer base.
e360: Does it take a while for the sales women to make a profit then from their commissions?
Lucey: No, so they’re profitable from day one, from their very first sale they’re making a margin, which goes to them. We appreciate that some women may only want to do this at a small level, but also appreciate that if there is a woman who really seeks this opportunity and wants to grow with it, then we want to invest in that success and really help her grow to as much as she can.
e360: So you are providing in-country support?
Lucey: Oh yes everything is in country.
e360: And if the woman doesn’t sell all the products in her initial business in a bag, what are the ramifications of that?
Lucey: These are women who financially are vulnerable, and we don’t want to put them at further financial risk. So we’ll buy the entire inventory back if we need to. If she is successful and sells the products and demonstrates a desire to continue, that’s when we will certify her as a Solar Sister and then she continues to sell.
e360: What is the range of cost of the products you are selling?
Lucey: The products we sell range anywhere from about ten dollars up to hundreds of dollars or even more. The average price of what we sell is about fifty dollars and there are a few different products in that mid-range that have excellent lighting capability as well as the ability to charge one or two cell phones. Fifty dollars might sound like a lot in the communities that we’re working in where people are making two dollars a day. But when you consider that they’re paying two to four dollars per week on kerosene plus another two to three dollars a week to charge their cell phone, that fifty dollar investment pays back pretty quickly. And then, after that, that money that would otherwise be spent on kerosene or cell phone charging is money that they can then divert and spend on more productive uses.
Photo credit: Solar Sister. Eva Walusimbi, right, a Solar Sister sales associate, distributes solar lights to women in the town of Mityana.
What’s interesting is most people don’t have steady incomes, so even though somebody is at the two-dollar-a-day level it’s not like the tooth fairy is putting two dollars under the pillow every night. Maybe they are a teacher and they’re getting a salary at the end of the month that is supposed to last them through the whole month or they’re a farmer and they sell their crops. And so the idea that you can only pay for things in small amounts is really opposite of the way their cash flow comes in. So it’s that kind of grass roots understanding that our entrepreneurs have. And they know yesterday was market day so all of my customers have money in their pocket today, so today is a good day to go around and visit all of my customers. They’ll bring that very local, very specific knowledge to their business.
e360: At this point how many Avon ladies of light do you have out there?
Lucey: We have just over 400 entrepreneurs.
e360: And that’s in three countries?
Lucey: It’s primarily Uganda. We do have some teams in Rwanda and South Sudan and this year we are expanding in Tanzania and Nigeria.
e360: What does access to a cheaper cleaner source of energy do for a family?
Lucey: Energy is so fundamental to prosperity and it has this ripple effect, and it’s the thing that really touched me when I saw how transformative it is for people to have something as simple as ordinary as light. It can change lives.
One of the stories was a woman that I met; her name is Rebecca, who had the opportunity to have solar installed in her home and it was a three-light system. She had a four-room house and she had to choose which rooms to put the light in. And one of her choices was to put the light in the room where she kept chickens because she knew that her chickens would only eat when they can see. So giving the chickens four more hours of light, they ate more, they were healthier, they laid more eggs, and she became more prosperous because she took the eggs to market and she bought seeds. She bought a goat and a cow, and she eventually developed her farm and it was thriving. People looked up to her as a leader because she had done this, and she established a school where she could teach children. She has a hundred students now. She teaches reading and writing and arithmetic, the standard subjects, but she also teaches sustainable small-plot farming so that they can learn once they leave school how to make a living for themselves.
Eventually the chickens moved on to their own mini-coop and that room where the light is she now uses in the evenings for teaching adult education for women in the community to come and learn how to read. And when we were there, the first woman graduated from her literacy program — and this beautiful, elegant, elderly Ugandan woman with this pride of accomplishment that she had learned how to read — and that kind of tied back to the single light bulb. It was just, like, “Wow, this is how you light up the world!” And that’s what I see the power of energy as being.
e360: And access to this form of lighting also impacts the amount of study time a female student has.
Photo credit: Solar Sister. Ugandan children reading by the light of a solar lamp.
Lucey: Yes, so one of the most immediate benefits we see in the household is when they have lighting, children are able to study more. They come home from school and the boys can sit down and start their studies right away. But the girls typically have to help their mothers with chores first, which means that the girl student is typically not going to get to study until after the dinner is cleaned up, which means it’s going to be dark. And if they’re using kerosene for light, I dare you to try to study with a kerosene lamp, with the smoke coming in your eyes. You can last about five minutes before your eyes are smarting; the lighting is not good. It’s very easy to give up, and so what happens is the girls put the homework aside or the family decides, well, we can’t really spend that much money on the kerosene, let’s put the lamp out. Then they don’t have their homework done the next day. They fall behind in class and eventually they drop out of school.
If it’s something as simple as access to lighting that is derailing girls from the education track, well that’s something that is so easy to fix. So let’s fix it.
e360: Have there been technical innovations with these small solar lights in the last few years that allow you to do what you do?
Lucey: The small solar lamps being designed specifically for the base-of-the-pyramid customer really started about five or six years ago, so it’s pretty recent. Even within the last few years we have seen the technology come down in price, improve in quality, have different and better features, have better design. Every six months it improves. One company makes an improvement and another company then takes that and iterates it and makes it even better.
e360: Your organization has been in operation for about three years. Are there villages where you have reached a penetration rate such that you are seeing change at a community level?
Lucey: Not yet, and that would be really an exciting thing to happen. We are such a small drop in the bucket. The problem is so big that we haven’t penetrated nearly enough yet. We do see tremendous transformation and change at the household level, and we hope to see it at the community level as time goes on. But it’s a huge challenge.
We might possibly achieve many of the UN Millennium Development Goals [MDG] by 2015. But energy was never a MDG, although it kind of runs throughout all of them. If it had been, it’s the one MDG that not only are we not approaching reaching, but we’re getting further away from it. And the reason for that is population growth in areas that are affected by energy poverty is outstripping the new access to energy. And so the gap is going to be even wider in 2050 than it is now. From a humanitarian point of view that’s a disaster. From a moral point of view I think it’s an outrage. From a market point of view it’s an opportunity.
So we’re looking at that going, “Wow, you know, our market just gets bigger and bigger and bigger all the time,” so we welcome others into the space to come help us close that gap.