3 insights on spreading clean energy technology in Nepal

Over 7 million people living below the poverty line in Nepal have limited access to clean and efficient energy. Many of these low-income households rely on fuel-based solutions such as kerosene and firewood. This exposes them to significant health and safety risks, and causes harm to the environment.

UNCDF’s CleanStart has partnered with four financial service providers (FSPs) to expand clean energy access in Nepal. This partnership extends financing for renewable energy solutions to low-income individuals. As of July 2017, more than 103,000 families and small businesses have accessed renewable energy technologies via innovative financing models.

So, what has been the impact to-date? What influence did these energy loans have on the lives of borrowers and their energy consumption behavior? And what insights can we draw for financial service providers on the relevance and use of energy financing products?

The CleanStart Client Monitoring Study

CleanStart and Rooster Logic (a data analytics firm) are undertaking an extensive client monitoring study. This research tracks clients before and after they take on an energy loan. We carry out quantitative surveys in three stages:

  1. At the time of loan application
  2. Three to six months after acquiring the renewable energy device
  3. One year after the initial interview.

Data collection for the final survey is currently underway. The findings of the first two client surveys – conducted with 2,738 solar energy customers (2,284 in the follow-up survey) - are promising!

Here are three important insights:

1. The majority of energy loan customers are female (94%). They already have a grid power connection in their home but are not satisfied with existing services.

Borrowers buy solar energy products because they felt it offered a better quality alternative to existing sources (48%). They also considered to be cheaper (31%) or consume less fuel, thereby saving money (27%) and was an environmentally friendlier solution (28%). We learn that individuals who hold the decision-making power to get the solar device in the first place are more likely to use it. These customer profiles are important for providers. They can design marketing strategies, and tailor services to the preferences of their customers.

2. The number of individuals relying on solar energy has increased, while usage of grid power and fuel wood dropped. We also note a rise in ownership and use of electronic household equipment.

Compared to the baseline survey, the number of households without any access to energy has diminished. Respondents state an increase in the use of electric-powered household goods, such as radio, TV, electric fans and rice cookers. Respondents also noted that they spend less money on candles and kerosene since acquiring the solar device. The average cost savings for candles was ~USD 0.10/week and ~USD 1/week for kerosene. These findings suggest more people have access to cleaner, more affordable and efficient energy sources.

3. Customer satisfaction with the solar home system is high.

During the first follow-up survey conducted 3-6 months after the sale, the majority of customers (94%) did not face any issues with the solar device. They cited good quality, warranty and cost savings as the main advantages. Areas of dissatisfaction were low voltage limits and occasional device malfunctions. Providers may respond with quality assurance and improved customer support services. There seems to be an increasing demand for larger solar systems. This may generate new market opportunities for the financial service providers.

The preliminary findings of our client monitoring study are encouraging. This is a reduction in energy-poor households, increased cost savings, diversified use of electronic equipment, and good levels of customer satisfaction. These insights show improvements in people’s standards of living and positive effects on individuals’ health and the environment.

The final client survey will provide more in-depth data, and will help assess the longer-term impact on reducing energy poverty. Meanwhile, the results to-date are encouraging and motivate our efforts to support low-income households transition to cleaner, safer and more efficient sources of energy.

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