Solar power impacts on industry

How beneficial is solar energy to communities, service providers and microfinance institutions?

Rural power project (RPP) director Mylene Capongcol said the use of solar energy provides a cycle of benefits for families, communities, local government units (LGUs), the solar system providers and the micro finance institutions (MFIs).

“RPP opens up business opportunities for the entire industry,” Capongcol said.

She pointed out that every solar energy project has to be financially viable, from the users to the investors.

“Solar photovoltaic (PV) systems that produce lighting have allowed students to read their lessons at night and provide extended hours for work and leisure, but that is only one aspect,” she explained.

“While this kind of energy source is a big boost to children’s education, it also opens up opportunities for livelihood for families. Basket weaving, wood carving, shell craft and other businesses have led families and even entire communities to enter into sub-contracting jobs with exporters. The income generating activities create its own development cycle in the local economy,” Capongol said.

She added that while RPP seeks to empower people in off grid areas, the adoption of solar energy technology should likewise open up business opportunities for sectors such as MFIs and solar PV suppliers. Both have to see that dealing with government is worth their time.

“This is precisely what we are trying to do. RPP, a World-Bank project under the Department of Energy, uses a multi-sectoral approach in providing electricity to off grid areas,” Capongcol said. As a partnership, RPP builds on trust and confidence among industry players. Business issues are addressed as each solar PV installation has tremendous impact on users, communities and LGUs.

“MFIs do not simply do business. More than business and profit is our role in the community, our obligation to society,” Cooperative Bank of Palawan manager Herudito Hista, Jr. said. But MFIs as well as solar PV suppliers want to make sure of the project’s sustainability among users.

In a seminar for MFIs and solar suppliers, both parties discussed critical success factors that would strengthen the partnership in the field level. It was pointed out that excellence of the solar PV installation, after-sales service, MFI-supplier-client relationship, and customer care are crucial and non-negotiable.

“We should all work together in transforming solar energy into a cost-effective, job-creating source of electricity,” Ramin Nadimi of Shell Solar Philippines said. Shell Solar has been installing solar PV systems in unelectrified areas nationwide for more than 20 years.

“This is a business you operate and serve the people’s development need at the same time so we must provide an excellent product. We must also make sure that it is sustainable because if people will depend on government grants, it is good only for 10 to 20 years,” Nadimi said.

With green attributes, solar PV systems address home pollution due to kerosene lamps which have been causing respiratory diseases among families, placing children at a higher risk. Studies conducted by Madecor Environmental Management Systems show that 97 percent residents in off grid areas use kerosene as the most popular fuel for their lighting.

To make solar PV installations affordable to off grid areas, the World Bank and the Global Environment Facility have set aside subsidies which MFIs and PV suppliers can avail. Innovative subsidies buy down the capital costs in order to improve the affordability of each installation.

The RPP uses public and donor resources to finance the energy requirements for key public facilities such as barangay halls, health centers, schools, and streetlights.