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Page 1

Best Practices for the Sustainable Scaleup
of Lighting Technologies

in Bottom of the Pyramid Communities
by

Pragnya Y. Alekal

M.Eng in Civil and Environmental Engineering
Massachusetts Institute of Technology, June 2005

B.S in Civil and Environmental Engineering
University of California at Los Angeles, June 1999

Submitted to the Engineering Systems Division
in Partial Fulfillment of the Requirements for the Degree of

MASTER OF SCIENCE IN TECHNOLOGY AND POLICY
at the

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

SEPTEMBER 2007

© 2007 Massachusetts Institute of Technology. All rights reserved.

Signature of Author....... .... ...... .................... ....................
Technology and Policy Program, Engineering Systems Division

August 10, 2007

Certified by.... .......................................... ........
Richard M. Locke

Alvin J. Siteman Professor of Entrepreneurship and Political Science
Thesis Supervisor

Accepted by ..................................... .... . .............. ......... . .............
Dava J. Newman

Professor of Aeronautics and Astronautics and Engineering Systems

Director, Technology and
Policy Program

ARcHIVES

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Chapter 3: Case Studies in Lighting

3.4 Case Study II: THRIVE

The primary resources for all information in this section are interviews with the CEO and
employees of THRIVE, their project partners, and clients conducted during site visits
over January 2007.

3.4.1 Background

THRIVE (Volunteers for Rural Health and Information Technology) was founded in
January 2001 with an aim to "develop, showcase and implement technologies and
processes [for the] comprehensive development of the rural and underdeveloped
communities in the areas of education, health, communication, rural lighting and water
lifting" (THRIVE, 2007). Founder and President, Dr. Ranganayakulu (Ranga), stated that
his own interest in the organization's mission came from having grown up on a farm in
rural Andhra Pradesh, not far from where THRIVE is now situated. Intimately familiar
with the conditions of rural farmers who primarily comprise India's poorest, Dr. Ranga
strongly believes that advances in technology can greatly alleviate the difficulties
associated with poverty, such as access to better healthcare, lighting, water, sanitation,
and information technology, and that technologies catered to the poor will be adopted and
used by them. This is why he founded THRIVE and he has already proven that this is
possible through his work in rural lighting.

THRIVE was first founded with an emphasis on rural health and information technology
improvement prompted by Dr. Ranga's own background. He holds a Ph.D. in Health
Informatics and has done numerous international consulting assignments with the Indian
government, the World Bank, and UNICEF (United Nations Children's Fund). He has
also served as a professor at the Administrative Staff College of India, a prestigious
university where all of India's elite civil service administrators are trained.

3.4.2 Lighting: 2002-2003

THRIVE's foray into lighting began in early 2002 when Dr. Ranga moved the
organization's headquarters into a rural area (Chintapally, in Nalgonda District; see
Figure 3.1) about 100 kilometers outside of Hyderabad, "to be closer to the people [he]
wanted to serve." This primarily tribal area was still largely underdeveloped in 2002.
Although connected to the Andhra Pradesh State Electricity Board (APSEB)21 grid, few
residents had access to any power either because they lacked the money to connect, as the
grid rarely extended beyond a small area, and/or because it was unreliable. Residents
reported that power was often available only during daylight hours, when they were out
tending to their fields, herding livestock or fetching water. In the nights, they had to rely
on candles, kerosene, and dung or other biomass.

21 Electricity systems in India are generally owned and operated by the various state governments.
Only union territories are run by the central government.

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Chapter 3: Case Studies in Lighting

Frustrated by the lack of lighting in his own rural center, Dr. Ranga began experimenting
with different sources and types of lighting. By the end of 2002, he had settled on solar-
powered LEDs. Solar power fulfilled two objectives: it is abundantly and freely available
in these parts; and it can provide an environmentally friendly alternative to the increasing
deforestation that was plaguing the region. While cost was a problem, the LEDs seemed
to fit their needs because they gave light for long periods of time using very little power,
were bright, lightweight, and sturdy. The only disadvantages he noted were that they
were expensive and very unidirectional (i.e., they lit only the area or objects on which the
light was directed).

To mitigate the high cost of LEDs, Dr. Ranga began investigating the different
components to increase efficiency and decrease operating costs. Over the next few years,
he became intimately familiar with the markets and technology of the different
components-the circuit boards, box materials, batteries, LEDs, and solar panels-and
began buying from manufacturers who offered the most competitive prices. He also
worked with experts to increase the technical efficiency of the LEDs, circuit design and
the batteries. Finally, he collaborated with a local partner to manufacture a lighting case
to put the components together.

Ranga also started recruiting highly motivated youth from the surrounding communities
and training them in the design and development of LED technology. They would
become his primary workforce.

Finally, Dr. Ranga needed to address the unidirectional lighting component of the LEDs.
To truly mitigate this, however, he felt he had to start a pilot project in order to
understand user adoptability, and tweak his model based on their reactions. He further
studied the lighting habits of the surrounding communities. Particularly he was interested
in the types of sources they used, and how and when they used the light that these sources
produced. The LED light was replacing candles, kerosene and biomass (dung, wood)
torches; and considering that the LED's luminosity (see Figure 2.15) far outweighed that
of a candle, he felt safe to move on. Over the years, he has continued to study and tweak
the lantern design to meet the needs of his customers.

3.4.3 First Lighting Project: 2003-05

By February 2003, THRIVE had its first LED lighting models. These were designed
exactly like light bulbs - consisting of LED lights that were permanently installed on a
wall and wired to the home's electrical system; which in this case was a battery that was
connected to a solar panel (see Figure 3.5). Pictures and details about this first model are
attached in Appendix 3. The very first models were installed in THRIVE's HQ in
Chintapally and in a local (Lambada) tribal village. The model was so successful and on
the cutting edge that it garnered publicity from all over the country, including from the
then President of India. The media blitz also brought the plight of the people to the
attention of the Andhra Pradesh State Electricity Board (APSEB), who quickly (and

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Appendix 4: LED Market Study

This high-level analysis makes several assumptions about how these different players
will all interact together. To begin with, there is no guarantee that IFC will act as an
efficient coordinating agent, or that they have the resources to facilitate all the
investments required to bridge all the upfront investments. Similarly, there is no
guarantee that players will specialize if allowed to do so, or that other cultural or
idiosyncratic barriers will surface to prevent the lights from being sold in the retail
market. Despite these assumptions, there is a compelling story for the IFC jumpstarting
the competitive LED market in India.

A4.6 Conclusion

Recent advances in solid-state lighting have positioned LED lamps as a potential
breakthrough technology with applications in the developing world. Although estimates
vary, it is apparent that a large, commercially attractive market exists in India for rural
lighting solutions. There are several players currently in rural India's LED market, each
attempting to be a holistic service provider of LED lights, providing everything from
manufacturing to post-sales service. Projects under this model have been "successful" but
only on a limited scale.

Perhaps because of their access to upfront capital, foundations currently appear to be a
much more formidable force in the LED space. They are able to provide their products
for free and while there is available funding, there are relatively fewer issues with
scaleup. However, this solution may not be viable in the long run. The model is
dependent on the funding preferences of donors. At worst, this money may dry up. At
best, the foundation capital provides a natural ceiling for expansion.

A for-profit mechanism would perhaps provide a more viable solution to the
electrification problem. This business solution requires two elements. First the upfront
capital requirements need to be bridged. Second, players should specialize into various
pieces of the value chain (i.e., manufacturing, wholesale, and retail). This specialization
could allow firms to be more efficient and competitive in the area of their specific
function. In theory, once the market is in place, competition could then fuel innovation
and price reductions in the specific segments.

The IFC has the potential to bridge both the upfront capital and coordination problem to
jumpstart the market. As long as the efficiency benefits of this scheme outweigh costs
added at each point along in the value chain, this could be a highly effective model.

If the above model is implemented successfully, everyone wins: India's rural poor get
access to electricity, and India's businesses make money-all in a self-sustaining manner.

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Appendix 4: LED Market Study

A4.7 References

Census of India. 2001. Data Highlights. New Delhi: Office of the Registrar General,
India.
http://www.censusindia.net/hh_series/web/data_highlightshhl 2_3.pdf

The Hindu. 2007. "Government plans to restrict subsidies on LPG, kerosene." January
18.
http://www.hindu.com/thehindu/holnus/002200701181623.htm

International Energy Agency. 2002. "World Energy Outlook 2002." OECD/EIA: Paris.
www. iea. org/textbase/nppdf/free/2000/weo2002.pdf

International Finance Corporation. 2006. "Distribution Channels and Value Chain -
Lessons from Kenya - Session IV" World Bank: Washington, D.C.
www. ifc. org/led

Mills, Evan. 2002. "The $230-billion Global Lighting Energy Bill." Proceedings of the
Fifth European Conference on Energy-Efficient Lighting, International Association for
Energy-Efficient Lighting.
eetd. bl. gov/Emills/P UBS/PDF/Global_Lighting_Energy.pdf

World Bank. 2003. "India: Access of the Poor to Clean Household Fuels." ESMAP
Report 263/03. World Bank: Washington, D.C.
wbln0018. worldbank org/esmap/site. nsf/files/263-03 +India.pdf/$FILE/263-03 +India.pdf

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