Embrace Solar is a grassroots company and its mission is to replace dangerous kerosene lamps with efficient and affordable solar-powered products in places that are dependent on kerosene for lighting, namely in communities that are off the grid. Working with local parties, international NGOs, and international charities, Embrace Solar aims to improve the lives of those who rely on kerosene lighting while ensuring the most effective way to diminish carbon dioxide exhaust.
I had the chance to speak with Yan Liu, co-founder at Embrace Solar. Over the course of the conversation with Yan, we touched upon her background, how the idea of a solar lighting solution came about, some of the challenges that Embrace Solar has faced, and her thoughts on social entrepreneurship:
Q: Can you tell us a little bit about yourself and how you got started with social entrepreneurship?
A: I have been working in international relief and development for about five years. Prior to that, I have always been working in international training and helping foreign clients with business in China. As a result, I have been able to visit a lot of places, gain a wide view, and ultimately, be able to contribute my skills. I worked for a few more years in international relief to supply items to refugees and those in disasters after that. Eventually, I wanted to invest more of my time into social impact and two years ago, I started Embrace Solar with a former colleague of mine, James Fraser.
Yan Liu, Embrace Solar co-founder
Q: Embrace Solar aims to provide an efficient and affordable lighting alternative to families that are off the grid. What exactly is the lighting alternative and who is it meant for?
A: Embrace Solar is truly dedicated to serving the off-grid population. We started by making a small handheld solar light and eventually developed a long solar sabre that could be used in developing communities that do not receive sufficient care from the government. We developed a solution for this particular group of people based on their income and their way of living. We can tell how much they spend on their daily life and how much they can allocate to lighting. We created a smart-controlling system in the light so that people can pay weekly while we can remotely control these systems and monitor the system from a distance. In this way, off the grid families can have great lighting and still do not have to spend a fortune to get it.
Q: So, how did the idea come about?
A: Originally we were focusing on one-time relief in our past experience but we saw that there was a blank area: there were still families staying in darkness, using candles and kerosene lighting. We were talking to our friend, who was in the bike sharing industry, about the huge demand among 1 billion people who need an affordable lighting solution. During this casual chat, he related it to the bike sharing industry. That really struck us. We went around finding people to discuss about a solar solution embedded with smart technology.
In the marketplace, there is already a focus and supply for the people who live off the grid and have good income to buy and pay for solar systems in installments. That market is already there but what is forgotten is the need of the people who live far from the cities and cannot afford expensive systems. They are the ones who live around or under the poverty line.
As a small company, we cannot afford to compete with companies supplying the better off population who can purchase more sophisticated solar light systems. So, we positioned ourselves as the perfect solution provider for the people that are off the grid and cannot afford sophisticated lighting.
Girl reading at night using Solar Sabre.
Photo from Embrace Solar
Q: Can you talk a little bit more about the lack of alternative lighting, such as solar-powered lighting, in remote communities and the extent of this issue?
A: Solar-powered products never quite got the same traction that mobile phones did in these off-grid communities. That is because telecom operators can bear the cost upfront and allow the population to pay monthly bills. For the lighting industry, this model was never considered, which is why mobile phones got into rural communities easier.
As for the extent of this issue, normally, there is an off the grid percentage for every country, but the issue is especially big in Asia and Africa. Altogether, in the world, about 1.3 billion live off the grid. In Africa, the total off the grid population is about half of that. The average electricity rate in Africa is hard to say, but in Eastern Africa, such as in Rwanda and Tanzania, where the rate is pretty low, there is about 36% connectivity. Of those that are off the grid, about 25 to 30% are children and women. Most of the time, children and women are the ones who stay at home and suffer from the fumes of kerosene lamps. These households tend to have at least one mobile phone but they easily run out of battery and would have to pay to have their phone charged elsewhere. That’s the lighting solution and phone charging solution for these communities right now.
Q: How does Embrace Solar’s solution target the lighting issue (ie. how does the proposed lighting system work) and what makes it special compared to other lighting solutions?
A: When we give a set of solar panels and a Solar Sabre to a family, we register the household’s information in our system and pair their ID and their phone numbers specifically to that light. When the family starts using the system, they pay one dollar at our service station to use the light for a full week at home. Until the last day of the week, the family will have to top up at the station again to use it for another week. There is a smart controller in the Solar Sabre which will shut it down if the family fails to top up in time. By doing this, it creates obligation for the families to treat the lights with care as there is no other usage for the product except for lighting. This mechanism is very important as it also helps bring investor confidence to the system. The technology is critical for the investors and the government to consider.
What makes this system so special is that the whole light is made in modular form so a big chunk of repair costs are saved. If the LED light component is broken, we only have to fix the LED light component. That is to say the repair considers each part separately. The modular construction of the Solar Sabre and the panel is a really critical part of the system.
Q: So what are the next steps for Embrace Solar?
A: Our solution is the answer for a very specific group of people. Based on our work with a few experts and development banks, we got confirmation that our system is the most affordable and least costly for governments to take on. Ideally, we want to give the solution to the governments so that they take on this issue with us. However right now, the challenge is that governments want us to pass the pilot stage before they commit.
In East Africa, Rwanda probably is the one with the highest electricity connection. We hope to have a pilot test in Rwanda to set a model. Once successful, we want to work with local authorities there to try to copy this system or business model in neighbouring countries.
After the pilot stage, we want to use a model different from the service station model mentioned previously. We want to use a model by which we can track each light on our platform using GPS technology. We would not send people on the ground but the platform will show where each light is and if they are in use. We can send people to collect lights that are not in use, so this is the application of the system. The rental money comes back to the company and and we will save half of it while the second half will be spent on maintenance of the systems and other costs we may incur.
We want to achieve Public Private Partnership (PPP) status so that the government we work with will give us protection. If we do not receive government support, we are really only a private company and will not grow the way we want to.
A family in Rwanda who is a beneficiary of Solar Sabre
Photo from Embrace Solar
Q: Have there been other challenges, whether with the Solar Sabre or regarding the company, and if so, how did you overcome them?
A: With regard to the challenges with the product, it is really difficult to find a low cost, high quality battery. Normally, in the supplies, there are several grades of batteries. To make this business model work, we have to make a durable product since we own its problems. Consumers return the broken product to us and they do not deal with the repair. This is the difference between us and the commercial companies. Our system gives us the challenge of quality control. We have to make the product durable so that we can reduce the repair rate.
On top of the product challenges, is with regards to partnerships. We have worked with different parties and we have had to stop working with several partners. One party was working on the software relating to the light activation on the phone. They failed to deliver the light activation software. Another was a local party in Rwanda that was responsible for the virtual money platform (used to collect rentals without exchanging cash). We discovered that this partner was not planning on delivering the system and was simply planning on stealing the Solar Sabres and panels that we were planning to send for deployment. It seemed these partners all wanted an upper hand in the business setup, which was a messy situation and it stalled us for quite a while. We ended up spending additional money on development and this delayed our making of the final product and the entire project. Technology plays a key role in our business and it can paralyze the whole thing if we do not manage it well.
Another challenge we had was with investors. Investors wanted quick returns and nobody wanted to wait three years in order to recover the costs as they consider Africa a highly risky market for business. In addition to talking to investors, proposing the pilot idea to development organizations was met with a lot of difficulty in terms of budget concerns. It is pity that these organizations are not taking risks in developing new solutions for the most vulnerable population.
Q: It is interesting that you mentioned Embrace Solar’s business model. In that case, can you tell me more about Embrace Solar’s operational model and maybe what it means to be a social entrepreneur?
A:. James and I are currently the major shareholders of Embrace Solar. Prior to ending partnership with the two technical parties mentioned, they were also shareholders. Additionally, the factory, which has been very reliable, is also a shareholder. The factory has a team of about five technical people and they truly have abundant capacity to help us scale up. James and I are in charge of looking after the sales, marketing, and product design. While the company is relatively small at the moment, we keep two software engineers who develop the app and look after upgrading the control module in the Solar Sabre. In addition, we have taken on two new partners in Rwanda to help us run the project. One is in charge of building and maintaining the new cashless payment system and the other looks after the top-up and maintenance.
I would say social entrepreneurs take profit as a second priority. We are investing our own money in order to clear all the obstacles and proof the business model. Since we are spending extra money, time, and effort to find a way to fight the doubts, the position of social entrepreneurs can be quite difficult. When it comes down to it, however, it really has to do with how a business owner looks at the beneficiaries of the business. Even if there are huge risks in equipment loss and other challenges that will come up, we will try to figure out how to buy insurance for the equipment. Considering the beneficiaries is a characteristic that a social entrepreneur has to have. Fighting away the critics is also a skill that is needed.
Q: Can you share more about your insight on the differences between social enterprises and traditional business companies?
A: The most prominent identity of social enterprises is that they work to address a pain that exists in society. But while you solve the problems, you do not create more problems. The second thing is that you do not address just one problem with your solution, but rather, you address multiple problems. The third thing is that you don’t become a burden or a destruction to society in order to make profit or to make the enterprise stay alive. You cannot make others pay for your growth.
While normal commercial businesses have direct and indirect costs, they also cause a lot of problems by choosing to ignore other problems. Social enterprises, on the other hand, do not ignore problems. They try to identify them and try to solve if not one, but several of them. Take the Solar Sabre system as an example. We help with education by giving the children more hours of light to do homework and study, we cut their lighting costs in half, of that spent on kerosene and candles by providing a cheaper lighting solution, and we bring much more lighting (about thirty times more) to the communities, while not becoming a burden to the country. That is because the system is developed based on the income level of the population and the country does not spend extra money looking after the infrastructure. We also save the country from importing kerosene oil. We also help reduce carbon emissions.
Q: Speaking of the whole idea of cost and revenue, how does a social enterprise determine its profit and how do you measure the impact/benefit that it makes?
A: In terms of profit, the major difference between a social enterprise and a traditional for-profit business is really how the enterprise chooses to spend its profit. So, in our case, our profits are generated from the rent of the Solar Sabres. We know how much it costs to make every light function and we of course know each week we will get back one dollar. We are aware of our costs for manufacturing, operations, overhead, repairs, and even the equipment loss. We have considered these costs in order to understand that it will require three years in order to fully offset the investment. We settled on this equation starting from the initial design of one dollar per solar sabre. We are also working towards offering one dollar for three lights for the PPP model, which is a partnership project with the government.
Regarding measuring the impact, we have the data from the pilot. We can tell how many hours in the evening a child can study more and how many hours of extra work their parents can do after it turns dark (ie. handwork in the evening). The other is the savings that the family will get. We eliminate the risk of house fire because we are using clean energy. They do not have to worry about burning down their house. There is also indirect positive impact on the mobile companies. Our system keeps their mobiles in use. The mobile companies could also be a close partner when introducing the product to these households. The savings that each family has can be used for the fields or elsewhere. These will have to be measured in the pilot.
Q: To wrap up our conversation, I was wondering out of curiosity, what is the meaning behind the name of Embrace Solar?
A: We really wanted a meaningful name for the company. We wanted to give an idea in the name that we encourage people to use solar energy more because it is free energy. We also do not want to restrict our solutions in the name as we have a vision of developing more solar-related solutions. We want to use a name that lasts very long and positions us as someone who promotes solar energy very heavily within the communities. We want to be remembered as a solution designed for those at the bottom of the pyramid.
Q: Do you have any advice for people who want to go into social entrepreneurship?
A: I would tell people to have a calm head when considering starting a social enterprise and to try to confirm real needs than just doing regular market research for a normal product. There is also a phrase in Chinese - “危中机,” that essentially means “where there is risk, there is opportunity.”
When it comes to starting a social enterprise, it really comes down to how much and how well you understand a problem or pain. The pain prompts the need for relief. It is the original start and inspiration of finding the ultimate solution. My advice would be to spend adequate time in the field to understand the problem. Normally, there is very little data regarding social problems. You have to go and live with a problem for a while for you to start to make sense of it. Only then can you identify a problem and then go back with what you find to meet with engineers, investors, businesses, or even mentors to come up with a proper solution for the problem.