Published on October 5th, 2020 |
by Carolyn Fortuna
October 5th, 2020 by Carolyn Fortuna
Today, reaching last mile areas remains a significant challenge for many renewable energy solution providers and distributors. Systematically located in urban centers, they face a clear challenge of reaching customers located in rural, off-grid, remote areas.
The good news is that off-grid solutions are getting better: they’re becoming cheaper, longer-lasting, and more environmentally-friendly. New business models now include innovative financing and delivery options due to technology that can bring renewable energy options to a range of more diverse customers than ever before.
The bad news is that last mile customers remain difficult to access. Their low density and minimal purchasing power means that servicing this market segment often makes profits elusive, and, because not all customers think alike, there’s a lot of work to be done on both sides to help the last mile clientele understand how renewable energy options fit their local needs.
What Are Last Mile Energy Solutions?
The “last mile” is a term adapted from supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a final destination. The last mile in the energy industry revisits the traditional, centralized mode of delivering electricity and devises business models for generating energy at the edge of the electric grid that makes sense for consumers, alternative energy companies, and utilities.
Renewable energy access can catalyze social and economic development and promote better educated, healthier, more productive, and increasingly resilient communities. Yet, according to the International Center for Research on Women, more than 1.1 billion people, most of them in rural areas, have limited or no access to electricity, and 2.8 billion people still do not have access to clean fuel and technologies for cooking.
The poor and women especially are often more likely to be excluded because they are income constrained and can have different energy needs and preferences — a result of gendered economic and social roles — which may not be reflected in the energy solutions.
Disproportionate Energy Distribution
Women and their dependent children comprise the poorest and most vulnerable electricity consumers. In last mile rural contexts in low and middle-income countries, the share of female-headed households with access to electricity is significantly lower than their male counterparts. For example, in sub-Saharan Africa, electrification in rural areas at 26% is far beyond the urban rate of 74%.
Sustainable Development Goal 7 (SDG7) calls for ensuring “access to affordable, reliable, sustainable and modern energy for all” by 2030. The Energy Progress Report 2020 Executive Summary states that closing the access gap will “require concerted efforts.”
Policy frameworks need consistent updates and enforcement to support last mile energy innovation, which can include off-grid solutions and newer business models. Working in conjunction alongside other SDGs such as gender, health, and education requires an inclusive approach to strategic thinking and action. That approach must be combined with technical elements that leaves no one behind and maximizes the socioeconomic benefits of electricity.
The Robert Schuman Centre for Advanced Studies points to several caveats in which electrification supports the multi-scale impacts of SDG 7 — socio-economic empowerment of women:
- powering social services such as dispensariess to improve maternal health
- public lighting to increase women safety
- electrical water pumps to facilitate water fetching in last mile communities
The COVID-19 pandemic has posed an additional layer of uncertainty to last mile communities, so safeguarding past gains in electrification requires collective support from utilities, mini-grids, and off-grid service providers.
Why Are Energy Access & Gender Equality So Inextricably Linked?
Since they hold the role of household energy managers and often have extensive networks, women are well-positioned to connect with their peers, increase alternative energy awareness, and deliver energy products and services. Yet it is imperative that energy providers, governments, and advocates address women’s energy needs specifically if poverty is to be eradicated.
ENERGIA, the international network on gender and sustainable energy, argues that women can play a crucial role in scaling up energy access, especially in hard to reach communities. The organization’s Women’s Economic Empowerment program makes clear that women’s energy entrepreneurship should be adopted as an essential strategy. When women’s entrepreneurship is added to national policy with toolkits for achieving last-mile energy access, it reminds energy stakeholders that a huge global market opportunity exists for the private sector in energy access.
The Robert Schuman Centre for Advanced Studies calls for a holistic approach from private, civil society to the public sphere. In that way, mainstreaming gender in electrification programs can take place, as can the complementary measures required for achieving a gender-sensitive approach in the renewable energy sector. They add that integrating women in intra-household decisions related to energy can lead to relevant changes in choices and can sensibly affect family livelihoods and their revenue.
Such integration should include:
- decisions on number and place of lights
- different uses of consumption
- complementary appliance purchases
Challenges In Marketing Clean Energy Products In Last Mile Communities
Creating a market for clean energy products in last-mile communities is the first and most important part of marketing and sales, but it is difficult to build a market for clean energy products for this clientele. Why?
- There is a low level of consumer awareness of off-grid clean energy products, which leads to low demand.
- Even when consumers know about clean energy alternatives, many potential
customers do not know where quality-assured products can be purchased.
- Hesitation exists among consumers due to previous poor experiences with clean energy
products. Regaining their trust is not easy.
- A confluence of absence of post-project services like repair and maintenance and non-availability of accessories to replace damaged ones near to communities reduces consumer interest.
- Products that are distributed under subsidized programs may reduce consumer willingness to pay for unsubsidized products.
- Familiarity and cultural practices with certain products like cookstoves may hold people back from investing in them.
- Local entrepreneurs often find it difficult to sell beyond their immediate networks
of family, relatives, friends, and acquaintances. They also face problems in acquiring
working capital and in stock management.
Final Thoughts About Last Mile Energy
Successful last mile energy programs require an environment that includes a gender-sensitive approach through a structured framework for analyzing multi-level contexts. As with many issues, local knowledge prevails in last mile energy, so, when imbued with opportunities to sell, maintain, and finance energy products and services, women in last mile communities can become active change agents in the energy sector.
Empowerment activities like financial literacy, capacity building, and training across sales, marketing, and business management is imperative for successful last mile energy empowerment programs.
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