In this section, the case study results are presented. The details of the cases are presented in Table 3.
Our assessment of the upscaling of the five enterprises is summarized in Table 4, based on an analysis of their past performance and ongoing progress. We will elaborate on these upscaling dimensions below.
With respect to quantitative upscaling, SELCO has provided sustainable energy products and services to more than 100000 households and is in the process of reaching 200000 households soon. SELCO has also supported 110000 rural homes, 2000 institutions, and 10000 small business cottage industries. It has installed over 125000 solar home lighting systems since 1995 (Ashoka and Hystra 2009; SELCO India 2005, 2007, 2011; AYLLU & the CSTS 2011). AuroRE has been successful in delivering affordable, reliable renewable energy products and services to more than 80000 Indians. AuroRE’s projects include installing 1025 solar water pump sets to farmers in 11 Indian states, such as Punjab, providing solar lanterns to street hawkers in Chennai, and coordinating a rural electrification project in Ladakh using 8700 solar home kits and 6000 lanterns (AuroRE India 2004; AuroRE 2009). THRIVE’s long-term mission is to disseminate 100 million lights all over the world. Till now, it has benefitted approximately 160000 people, and most of those are poor and tribal people (Ramani 2010; THRIVE 2010). Noble Energy Solar Technologies Ltd. (NEST) had sold around 78800 solar lanterns till 2008, a gradual increase from 12100 back in 2002. The number of lanterns sold currently is around 90000, of which 80 % are sold in India and the rest are exported. NEST is targeting 1 million solar lanterns in 5–6 years under its unique programs such as Solar Seeding to contribute towards NEST’s mission of a kerosene-free world (NEST 2005, 2009; Uppal and Mahendra 2009). D.light Design had sold 1 million solar lanterns in over 30 countries by the end of February 2010. D.light is targeting 50 million people by 2015 and 100 million people by 2020 (D.light 2010, 2011).
As far as organizational upscaling is concerned, SELCO has had a successful growth over the last 14 years, with a turnover of around USD 1.75 million in FY 2009 and an estimated turnover of USD 3 million in FY 2010. The company made a loss of INR 7.5 million in 2008–2009, but returned to profit in the financial year 2009–2010, earning INR 3.8 million on a revenue of INR 150 million (Ashoka and Hystra 2009; Mukherji 2011; Pullenkav 2010). SELCO has around 170 employees (four regional sales managers, eight senior managers, 21 branch managers, 32 sales executives, 40 customer support executives, and 18 office administrators, in addition to members of the projects, finance and innovation departments, including senior management). SELCO’s expansion plans include the achievement of an annual turnover of USD 6 million (SELCO 2009; AYLLU & the CSTS 2011). AuroRE has quite different plans for organizational upscaling. It is focusing on becoming a knowledge service provider for energy services with core expertise in service provision, consultancy in renewable energy technologies, program and project management, and energy-efficient architecture through workshops, demonstrations, and site visits. Through its experience in renewable energy technologies, AuroRE is also offering its services to European companies looking to certify and carry out field inspections on renewable energy projects and carbon emission reduction projects and programs for their Indian clients (Lamba 2009; Shekhar 2009). THRIVE has generated revenues of around USD 2 million till now. THRIVE is developing a renewable energy center outside Hyderabad for training and demonstration projects in renewable energy. It has plans to start new programs for rural water treatment, rural electrification, rural banks, and rural village outlets. THRIVE also has plans to enter into the solar power generation business in line with the National Solar Mission of the Government of India. In addition, THRIVE is helping many corporate organizations to implement corporate social responsibility (CSR) programs in relation to LED lighting (Ramani 2010; THRIVE 2011). NEST is planning to expand its production, warehousing, and marketing and sales capabilities through an investment of around INR 60 million. It expects revenues of around INR 543 million by 2014–2015 and is targeting an EBIDTA (earnings before interests, taxes, depreciation, and amortization) of around 25 % from the fifth year onwards, i.e., from 2015. Mr. Barki is also planning the manufacturing of solar panels in China to reduce costs (Barki and Barki 2010; Uppal and Mahendra 2009; NEST 2009). D.light Design, on the other hand, is focused on becoming a truly global company. D.light Design has grown to over 70 employees in three years and has offices in the USA, India, Tanzania, China, and Hong Kong. In 2010, D.light Design centralized its product design and international sales in Hong Kong, with plans to move additional corporate functions (D.light 2010, 2011).
With regard to geographical upscaling, there are unique patterns that are dependent on the chosen business model. SELCO is focusing on expanding geographically in five Indian states neighboring Karnataka, including Maharashtra, Tamil Nadu, Kerala, and Andhra Pradesh. By the end of financial year 2010–2011, it is expected that SELCO would be present in 16 districts of Karnataka, 3 districts of Kerala, 4 districts of Gujarat, and 3 districts in states like Maharashtra and Andhra Pradesh (SELCO 2009, 2010). However, SELCO has found it difficult to expand geographically across different Indian states due to the lack of spillover learning across different states and the lack of financial institutions with whom SELCO can partner with. At the same time, SELCO does not want to use the franchise system to sell its products and services, as the reputation of its brand depends on services and it is more difficult to guarantee the same quality of service from franchises. Hence, SELCO has decided to only move into a new region if there are good contacts there both for the dissemination of information and for providing good services (Mukherji 2011; SELCO 2009; SELCO India 2011). AuroRE has been successful in delivering affordable, reliable renewable energy products and services across 12 Indian states, such as Andaman and Nicobar Islands, Tamil Nadu, Pondicherry, Karnataka, Kerala, Orissa, Jammu and Kashmir, and Gujarat (AuroRE 2004). THRIVE, NEST, and D.light Design are the most internationally oriented of the five cases. THRIVE has established an international geographical reach due to the support from various groups and organizations around the world. At present, THRIVE is strongly established in Indian states like Orissa, Andhra Pradesh, Jharkhand, Bihar, Maharashtra, and Manipur, and countries such as Afghanistan, Cambodia, Bangladesh, Ethiopia, and Kenya (Ramani 2010; THRIVE 2011). NEST also has a wide geographical presence in India, with a network of 70 dealers in different states in India. Globally, NEST has expanded its operations to countries such as the UK, Sudan, Sri Lanka, Japan, Australia, Malaysia, Kenya, Nigeria, Malawi, Tanzania, Fiji, Belize, Bolivia, El Salvador, and Puerto Rico. Now, NEST has plans to reach other countries such as Nigeria, Somalia, Central America, Pakistan, Australia, and China (Barki and Barki 2010; Barnhill et al. 2011; NEST 2009). D.light Design has also developed a strong distribution in around 32 countries and has built additional distribution outlets in places such as South East Asia, Latin America, Pacific Islands, and West Africa. D.light Design is planning to expand further in India, Bangladesh, and East Africa, with the goal of selling millions of lighting products (D.light 2010, 2011; Shukla and Bairiganjan 2011).
With respect to deep scaling, it is found that the ventures discussed generally have not been able to reach increasingly poor segments of the population, i.e., going deeper down the economic strata in their existing locations, although it has to be said that they have developed rental schemes and special financial mechanisms to reach people at the base of the pyramid. The key problem is that commercial approaches, though appropriate in many cases, are unable to reach the extreme poor, i.e., those who cannot be offered loans from rural banks and microfinance institutions due to the lack of any kind of assets (Shukla and Bairiganjan 2011). For reaching the very poorest segments of the population, there is, thus, a need for mobilizing more financial support through government grants, carbon finance through the CDM mechanism, and support from international financial institutions (D.light 2009). This constitutes a major challenge for the future.
The ventures are generally performing well in terms of functional upscaling. SELCO has created new solar energy-related businesses such as PV-powered battery-charging businesses which supply single-lamp systems for both street vendors and poor homes, PV power for sewing machines to increase the productivity of sewing businesses, PV-powered soldering irons for TV repair, and small PV-powered silk looms. SELCO is also in the process of developing a cheap, improved cooking stove for its clients. It is also diversifying into energy services other than solar ones, such as thermal, efficient cooking, biogas provision, and drying, to its existing clients. Thus, SELCO is looking to become a complete energy provider, from just a solar lighting provider. In addition, SELCO is partnering with two organizations for multiple service-based e-kiosks in rural areas of India, which will be run on solar power, and providing solar-based power solutions for water purification (Datta 2009; Hande 2010; India Knowledge@Wharton 2010; AYLLU & the CSTS 2011). AuroRE is developing new products such as LED/CFL-based home lighting lanterns, as well as solar-powered reverse osmosis systems to purify drinking water. AuroRE is also working on new products such as an improved solar rice cooker, a solar lantern, and solar home lighting kits. In addition, AuroRE has developed the mission TEJAS, which is a platform of exchange and development for solar energy technologies by bringing together lighting designers, product manufacturers, NGOs, administrative bodies, financial institutions, and corporate/industrial R&D players (AuroRE 2009; Lamba 2009; Shekhar 2009). THRIVE has introduced additional forms of lights that are useful to the villages, like street lights, task lights, etc., at very economical rates. THRIVE is looking for a major share in niche markets such as street lighting, boarding, and institutional lighting (Ramani 2010; THRIVE 2011). Similarly, NEST is planning to increase its product portfolio by developing new solar street lights, solar-powered fans, mini solar desk lamps, etc. (Barki and Barki 2010; NEST 2009). D.light Design has developed several new products, such as a premium solar lantern with four brightness settings, affordable solar lanterns with 360° lighting and quality solar task lamps, and D.light S1, which is one of the cheapest solar lanterns at a price of around USD 8 (D.light 2011).
As far as replication is concerned, SELCO is trying to start an incubation system for new entrepreneurs and business associates, and aims to have 100 additional business associates. These business associates are rural youths, who would have a chance to create sustainable livelihoods for themselves by providing energy services through SELCO’s products and services to poor people through their own businesses, keeping the SELCO management as board advisors. SELCO has also set up a USD 3 million fund to help new entrepreneurs planning to start new enterprises for energy services in different geographical locations. SELCO has already helped to create more than 25 entrepreneurs who are serving 750 clients by providing solar lighting to street vendors, home-based workers, and small businesses (Hande 2010, 2011; India Knowledge@Wharton 2009, 2010; Mukherji 2011; AYLLU & the CSTS 2011). AuroRE is also focused on creating solar entrepreneurs. Such ventures can become financially sustainable in different ways, such as hiring out solar lanterns to market traders or supplying and installing solar water pumps to farms. AuroRE is aiming to set up a whole chain of local energy entrepreneurs by effectively providing them with managerial, technical, and financial backup. It is also training several people and developing a network of sustainable enterprises among economically deprived communities. This includes the training of at least 250 people in the installation and maintenance of PV solar systems (AuroRE 2004; AuroRE India 2004). THRIVE is encouraging village entrepreneurship by promoting solar light entrepreneurs and LED-based home lighting with the intention to create micro, small, and medium energy service enterprises for manufacturing, selling, and servicing LED lamps. THRIVE has also proposed alternative energy kiosks in villages in which users can walk and get light charges for a token fee and enjoy continued service and maintenance of light. The kiosks are run by local youths with minimum education like matriculation and basic training in electronics and mobile phone usage (Ramani 2010; THRIVE 2011). NEST is developing small businesses which manufacture charge controllers and plastic works exclusively for NEST. In addition, it is developing and supporting entrepreneurs in villages for the distribution of its products (Uppal and Mahendra 2009; NEST 2009). D.light Design has built a distribution base of 1500 rural entrepreneurs. Each rural entrepreneur handles around 2000 households who also source products from dealers (Raja 2009).
From the literature review in “Theoretical building blocks,” it was found that institutional upscaling is generally beyond the scope of individual enterprises and requires concerted action from a critical mass of entrepreneurs. All enterprises except SELCO score low in this respect. SELCO, in the past, has lobbied government institutions such as the Reserve Bank of India to reduce the procedural bureaucracy of foreign investment from social investors abroad to firms such as SELCO (Alexander 2009; India Knowledge@Wharton 2010). All the enterprises discussed found it difficult to be involved in institutional upscaling. Some of the key institutional barriers mentioned include high subsidies for fossil fuels and high taxes for solar energy products, lack of consumer finance from financial institutions, and other regulative barriers. Most enterprises have advised government officials about, and have even lobbied against, high subsidies for fossil fuels, but their efforts have not resulted in any major institutional changes. Enterprises have also found it time-consuming to engage in trying to bring in institutional changes, since this may make them lose focus from their primary work—the day-to-day functioning of the enterprise and meeting the needs of their customers (Alexander 2009; Barki and Barki 2010; Lamba 2009; Ramani 2010).