Nearly 1.2 billion people on the planet still lack access to electricity, 250 million of whom reside in India. Off-grid solar technologies can help meet some of the energy needs of these people but have faced a variety of financial, technical, and political barriers. Pro-poor innovation, led by emerging enterprises such as Green Light Planet (GLP), holds the key to understanding how low carbon technologies such as off-grid solar might achieve scale. This case study builds on prior research examining what factors affect the ability of an off-grid solar firm to achieve scale in India by examining the most successful company in terms of unit sales. Through that extensive research of the off-grid market in India, it was revealed that GLP far outsold other companies in its class around 2015. One of the factors affecting its ability to scale is the fact that its products are modular and require little to no financing for the customers. This case study further reveals that the company’s main innovation is the business model, which relies on networks of sales agents operating under a system of sales targets, incentives and boosters. By shifting the responsibility of making sales to last-mile entrepreneurs, the company leverages its network to continuously move inventory off the shelf and into the hands of customers.
Achieving universal access to modern energy has become enshrined in the new U.N. Sustainable Development Goals [
Schumpeter [
Suurs [
The role of networks, specifically social [
The problem of inadequate investment in pro-poor energy, a major barrier to scaling energy access, has been compounded by the fact that the energy sector suffers more broadly from chronically low investment in innovation [
This paper presents an in-depth case study of how unit scaling can be achieved for pro-poor energy innovation. It is part of a broader research endeavor aimed at understanding which firm-level factors affect the scaling-up (or not) of off- grid solar technologies in India [
The main tool used for qualitative inquiry were semi-structured interviews conducted with various employees of the company, including the CEO, the head of the Service Center in Patna, the acting District Manager responsible for Vaishali District, a Team Leader and two Sales Business Associates. The purpose of these interviews was to understand in greater detail the evolution of GLP’s business plan and the challenges faced and opportunities leveraged as the firm grew in size and customer base. In addition, a randomized structured survey was conducted of 15 Green Light Planet customers in several villages of Vaishali district in the eastern state of Bihar in July 2014 (see
interviews were designed to assess: 1) the demographics of the customer base of off-grid solar technology firms; 2) finance and the technology; 3) servicing and maintenance issues; 4) fuel switching; 5) quality and satisfaction; and 6) livelihood improvement or augmentation. The purpose of these surveys were to verify responses of GLP staff as well as identify the challenges and opportunities post-deployment of the company’s business model.
The author also participated in a few sales attempts with a local sales agent of Green Light Planet to better understand the sales strategy and witness the interaction between potential customers and the company. To identify and analyze the role of social networks in GLP’s business model, a combination of observation, process tracing, content analysis, and constant comparison were utilized. When examining the impact of each customer helping diffuse the technology further as in
Green Light Planet is a private enterprise that manufactures and sells off-grid solar energy technologies across India. The company’s products, predominantly a variety of solar lanterns1, with or without mobile phone charging capability
(see
1) Deployment Model Innovation
GLP is one of the few companies in India utilizing village level entrepreneur networks (VLE) that facilitate the sales of their products to the “last mile”. Bairiganjan and Sanyal [
Organizational Chart
In the direct sales model, GLP organizes its staff into the following categories:
Product Type | Retail Price | Solar Power | Daily Run-Time1 | Brightness2 | Mobile Phone Charger |
---|---|---|---|---|---|
Eco | $17.99 | 500 mW> | 30 hours | 25 lumens (2 × kerosene) | No |
Solo | $24.99 | 700 mW> | 24 hours | 50 lumens (5 × kerosene) | No |
Mobile | $29.99 | 1.5 W> | 36 hours | 75 lumens (8 × kerosene) | 1 × USB charger |
Pro2 | $49.99 | 3.3 W> | 36 hours | 150 lumens (15 × kerosene) | 2 × USB charger |
1. Sun King uses Lithium-ferro phosphate batteries that last 5 years. 2. Max lumens depending on setting chosen and the approximate brightness as compared to kerosene lamp.
A Zonal Business Manager (ZBM) is incharge of a particular state.
Several Regional Sales Managers (RSM) look after a few districts each and report to the ZBM.
Each District Sales Manager (DSM) is responsible for the management of sales in his district and report directly to the RSM.
Up to eight Team Leaders (TL) are responsible for the management of sales in several villages and report directly to the DSM incharge of the area.
Each TL manages up to 16 Sales Business Associates (SBA) who are responsible for sales in their own villages.
The role of this extensive, organized network in facilitating sales is evidenced by the increase in revenue through sales in the state of Bihar from approximately $70,000 per month in 2012 to approximately $417,000 per month in 2014(see
Every staff category is salaried on the GLP payroll, except the SBAs who work on 10% commission per product sold. There is constant communication and coordination for sales, demonstrations, and meeting of targets between the DSMs, TLs, and SBAs. There is a monthly review meeting between the DSM, RSM and ZM. All TLs meet with the DSM in the district once a week, and a RSM may meet with the DSM 3 - 4 times a month. Furthermore, GLP even facilitates the cross-pollination of ideas between its staff in India and East Africa through exchanges. The constant sharing of information through this network probably allows for greater diffusion of GLP’s technology. Finally it should be noted that GLP could be classified as both an enactor as well as a selector in Suurs’ [
both because GLP not only creates its own technology but its network of sales agents pick and choose which combination of technologies sell best in their area.
Supply Chain
A supply chain is defined by Mentzer et al. [
A Team Leader is responsible for buying inventory from GLP through the stock point and selling it to the SBA. SBAs are far from stock points so they rely on the Team Leaders to purchase products for them. This arrangement reduces the transportation costs for the SBA as well. The SBA generally purchases two pieces of each product from the TL.
Sales Business Associate (SBA)
The primary role of the SBA is to motivate the customer to purchase GLP products. Nearly all of them do their job part time, choosing to focus on sales either in the morning or evening hours. One of the SBAs interviewed during the study, has been with GLP for almost two years. He also serves as a lab technician for a pharmaceutical company while his family operates an after-school tutoring center and engages in agriculture. Another SBA interviewed, is an influential man in his village who has been with GLP for nearly a year and is known to be one of the company’s most successful SBAs. In addition to his duties as an SBA, he operates a poultry farm.
Recalling the importance of knowing the user’s needs when trying to diffuse an innovation [
Direct sales is a difficult job. It takes approximately 30 - 40 minutes for a SBA to convince the customer and requires on average 3 - 4 visits as well. The sales pitch typically starts with the health challenges of using kerosene and a cost-benefit analysis of switching from kerosene to a solar lantern. For example, on average a person in Bihar might spend Rs. 10 ($0.17) a day on kerosene. Similarly, a person might spend Rs. 150 ($2.50) a month for approximately 3 hours a day of use to get access to a diesel generator-based plug point connection (for mobile charging).
The GLP model is also unique because it shifts the risk of completing sales from the parent corporation to its network of sales agents. All SBAs have targets for monthly sales that are set for them by District Sales Managers and facilitated with the help of Team Leaders. Both SBAs and TLs are under immense pressure to meet monthly sales targets. To meet these targets, TLs take on high inventory loans from GLP and pass these loans on to SBAs (see
Debtor | Monthly Debt (USD) |
---|---|
Team Leader | $833 - $1667 |
Sales Business Associate | $167 - $334 |
for a much longer time with a dealer. The desire to get rid of inventory debt drives sales. Though this model results in relatively high sales, the pressure to meet targets (and to carry debt) results in a low retention rate of 50% - 60% for SBAs in the GLP network.
Sales vary from region to region with some SBAs managing to sell up to 80 pieces a month. The average monthly products and highest ever sales per month for the two SBAs interviewed for this study are listed in
Team Leader
A good Team Leader has prior experience in marketing and distribution. One of the Team Leaders interviewed during the field visit to Vaishali district in Bihar previously worked with Aircell, a cellular network provider, for two years in a marketing position. Working fulltime dealing with his SBAs, he must reach out to at least two of them a day to ensure that they are meeting their sales targets. Through all his combined SBAs, a Team Leader should average $167 in sales a day. In June of 2014, prior to the field visit, the TL interviewed executed $6,667 in sales with the help of his 21 SBAs.
Commission and Incentive Structures
As mentioned before, SBAs are not on the GLP payroll. The company has set up an incentive and per product sales comission structure (see
Incentives, or sales “boosters” for SBAs are established on the basis of the number of products an SBA sells every month.
To motivate Team Leaders, GLP has devised a four-tiered promotion and incentive structure for them. This includes a mix of salary increases, target driven monthly sales incentives and benefits (see
2) Sales Strategy
A variety of levers are used to drive the sales of Sun King products in the ecosystem in which GLP operates. These levers include marketing tools such as brand building and product demonstrations, and targeted sales and customer relationship building. The Regional Sales Managers (RSMs) are encouraged to
SBA | Avg. Monthly Products Sold | Highest Monthly Sale |
---|---|---|
SBA 1 | 21 | 40 |
SBA 2 | 25 | 65 |
Product | Maximum Retail Price (Rs.)3 | SBA Comission | Billed to SBA |
---|---|---|---|
Solo | 900 | 80 | 820 |
Eco | 600 | 60 | 540 |
Mobile | 1600 | 125 | 1475 |
Pro 2 | 2300 | 175 | 2125 |
Level | Monthly Salary (Rs.) | Boost |
---|---|---|
Team Leader 1 | 10,000 | Sales Incentive of Rs. 5 - 7000/month |
Team Leader 2 | 10,000 | Sales Incentive + Rs. 250/month (to cover mobile costs, etc.) |
Team Leader 3 | 10,000 | Monthly Sales incentive + Rs. 500/month (to cover mobile costs, etc.) |
Team Leader 4 | 17,000 | Monthly Sales incentive + Rs. 500/month (to cover mobile costs, etc.) |
come up with innovative localized marketing techniques. The RSM of Vaishali district has taken it upon himself to come up with unique marketing strategies including a ring-tone for his staff’s phones that is essentially a sales jingle for Sun King products.
Brand Building
All Sun King SBAs and TLs wear a bright yellow t-shirt and a cap with the logo so that villagers can recognize the Sun King brand. Leaflets for all products are carried with the GLP staff and taken for door-to-door sales pitches. The leaflet includes the contact information for the local SBA or TL for the customer to contact when they are ready to buy a product (see picture below). Posters of Sun King products are also placed at high-traffic areas such as chai stalls, general stores in villages or at the village chief’s house.
In Vaishali district of Bihar, the RSM has employed another unique strategy to build the brand and enhance sales locally. Termed a “van activity”, it involves a large Sun King banner draped around a van with a repeated audio announcement about the benefits of solar lighting. This van moves through 5 - 7 villages and generates one product sold daily over the course of the two-week activity. An SBA follows up with those customers who may have expressed interest during the time the van was moving through their locality. This activity, another that falls within Rogers’ theory [
Another brand building strategy employed by the local RSM is called “Halla Bol”. Every Saturday, eight GLP Team Leaders from a region travel through the region on motorcycles wearing Sun King branded shirts, blaring their horns and chanting slogans. This activity is not only a marketing ploy, it also allows TLs from different areas to interact with each other and share information on how to best facilitate sales.
Product Demonstrations
In the daily product demonstrations an SBA, a TL, and the DSM move together through a village after sunset with switched on Sun King lights hanging around their necks. This draws the attention of the villagers and starts the conversations about the products. Each demonstration activity generates immediate sales and totals approximately 25% of GLP’s sales in Bihar. Most people take leaflets and the SBA follows up with those who showed interest in the product but refrained from purchasing at the time of the demo in the next few days.
GLP staff also target shop owners with Sun King products because they are frequented by many villagers. An SBA might leave a Sun King product at the shop over night with their contact information. A potential customer may then inquire about the lit solar lantern and follow up with the SBA. By leaving a product free of charge with the shop owner for a few days, GLP manages to create awareness and trust in the product. If the shop owner is satisfied with the product they may choose to purchase it instead of risking having it being taken away by GLP staff.
Targeted Sales
Targeting locations without access to reliable electricity access or approaching businesses that have large lighting needs helps ensure sales. For example, a small poultry farm may require 40 - 45 Sun King lights whereas a brick factory could replace its liquefied petroleum powered lanterns with Sun King products and recuperate the investment in 3 months. In areas identified as having extremely unreliable or no electricity access presents an opportunity to conduct sales by using a general store in the area as a marketing and sales point.
Competition
Nationally, GLP competes with many kinds of alternatives to its products. In Bihar, the main competitors for GLP in the market identified by GLP staff are D. Light Design, Bhaskar Solar, G-light, and Sun Max (see
The main competitor most like GLP in the region and nationally is D.Light Design. Though not the focus of this paper, it should be noted that D.Light operates on a completely different business model than GLP, choosing primarily to focus on retailing through partners. In Bihar, D.Light sells its products through the government’s “common service centers” (CSC) known as Vasudha Kendra. CSCs serve as a hub for a variety of “high quality and cost-effective video, voice and data content and services, in the areas of e-governance, education, health, telemedicine, entertainment as well as other private services4”.
The graph below shows self-reported annual sales of both GLP and D.Light nationally. Both companies dominate the private solar lantern market in terms of total volumes sold and brand recognized.
3) Customer Relations
It is important to note the role of building good relationships with customers in order to establish trust in the brand and enhance sales. Trust, Rogers points out, is critical in the adoption of innovations in a target community and something that takes time and key individuals to establish. The GLP model relies on SBAs who are embedded in their local communities and therefore must meet product-servicing requirements as and when they arise. SBAs keep going back to check on customers, which gives them confidence and boosts sales through word
Brand | Product | Price ($) | Sales Channel |
---|---|---|---|
D.Light | Kiran lantern | $8.50 - 30 | Retail through Vasudha Kendra (government common service center) |
Bhaskar Solar | Solar Home Lighting System | >$150 | Procured through Gram Panchayat Fund |
G-Light | Eco-like Lantern | $15 | Retail |
Sun Max | Lanterns | $30-40 | Retail through Kirana Shops (Convenience Store) |
of mouth amongst the villagers. Villagers are often subjected to “fly-by-night” sales agents who offer faulty products of all kinds so convincing them to purchase a product can be a lengthy and challenging process. Continually asking them about their Sun King products and being visible in the community builds trust.
A closer examination of how these products are diffusing reveals that by targeting the elected head of the village, or another person in the community with high social capital, as the first customer, a lot more products can be sold in the community thereafter. This suggests that GLP products are diffusing locally along the lines of the network theories discussed above. One village chief interviewed said that in the beginning he would have the lantern turned on and placed outside his house during the evenings. People stopping by would inquire about the product. Around 30% of the respondents stated that they have taken their own or gifted new Sun King products to friends and relatives in other villages.
Maintenance and Servicing
An important part of maintaining good customer relations is providing quality maintenance and after-sales servicing. Quality maintenance and after-sales service support is one of the most important factors affecting the success of an off-grid solar energy enterprise. Every GLP staff member encountered during the field visit in 2014 seemed to agree that servicing in the area needed improvement. Before the arrival of the Service Center in the nearby city of Patna,
GLP used to simply replace any products facing maintenance issues with brand new ones. The main maintenance problems witnessed by customers in the area are to do with batteries entering a state of “deep discharge” from overuse and mobile charge port malfunction (perhaps due to loose wiring and the quality of the pin used to charge mobile phones).
Once the customer hands over the product to GLP staff, the entire process of repairing and returning should only take 20 days. However, the field visit revealed that one of the biggest challenges faced by GLP’s direct marketing business model was delay in the maintenance and repair of products. This delay comes from a few specific parts of the process. Delays in the transportation of broken products to and from a stock point may be one of the biggest problems. The distributor is responsible for this as he is responsible for choosing the transportation courier. In addition, the distributor may wait for a certain number of broken products to collect at the stock point before sending them all together as part of the same consignment to the service center. The sales team may also be responsible for delays by failing to pick up the products from the customers in a timely manner to pass over to the distributor.
The business innovation of GLP that relies on shifting the risk of conducting sales from the parent corporation to a network of reliable sales agents has given the company an edge in the distribution of off-grid solar technologies in India. By relying on the social capital of the locally embedded sales agents, the company is able to capitalize on the trust required for the adoption of its technology for the last mile customer. In doing so, GLP surmounts one of the biggest barriers cited by theorists as affecting the diffusion of new innovations [
communication between the dendritic network representing the company’s organizational leadership facilitates the flow of learning on how to conduct and continually improve sales. This structure of communication, so important for understanding customer needs, addresses yet another important factor in facilitating the diffusion of innovations [
I would like to thank my advisors Dr. Kelly Sims Gallagher, Dr. Jenny Aker and Dr. Ambuj Sagar for their guidance and the generous funding from the Center for International Environment & Resource Policy at the Fletcher School of Law & Diplomacy, Tufts University. In addition I would like to acknowledge the National Security Education Program (NSEP), which funded my travel to India and for my hosts, the Shakti Sustainable Energy Foundation in New Delhi. Lastly, I would like to thank the institutional homes I had during the time I worked to complete my dissertation and subsequently the post-doctoral work. These institutions include the U.S. Department of Energy, the Center for Global Development (CGD), and the Center for Strategic & International Studies (CSIS) in Washington, D.C.
Singh, K. (2017) Networks and the Diffusion of Off-Grid Solar Technologies. Low Carbon Economy, 8, 63-80. https://doi.org/10.4236/lce.2017.82006