Distributed solar energy in Brazil: Fabio Rosa’s approach to social entrepreneurship

Approximately 25 million people in Brazil do not have access to electricity. Fabio Rosa, a local social entrepreneur, is aiming to fill this need through innovative distributed solar energy systems.

In the southern state of Rio Grande do Sul, for example, about 150,000 people remain isolated from the electric power networks. There are no plans in place to provide these people with access to conventional electrical services.

Prior to the 1990s the Brazilian government launched a number of initiatives to expand the electric grid and provide power to people in rural areas. However, the 1990s marked a period of extensive deregulation in the country. As a result of this trend, in the late 1990s Brazil’s electric utilities were privatized. While the government had not only served existing clients but also sought to increase access to electricity and create new clients through its efforts to extend the grid to rural areas, the privatized corporations focused only on servicing locations with existing grids.

Fabio Rosa has a long history of delivering electricity to low-income Brazilians. An agronomist by trade, Rosa has been developing electrical distribution solutions for over twenty years. Through his work in developing rural electrification solutions, Fabio Rosa founded both a for-profit corporation, Agroelectric System of Appropriate Technology (STA) and a not-for-profit organization, the Institute for Development of Natural Energy and Sustainability (IDEAAS). Both STA and IDEAAS have been working to bring electricity and community development to rural Brazil since the mid 1980s.

IDEAAS is a non-profit organization founded in 1997 to create and demonstrate models of self-sustainable development for low-income rural populations by focussing on the use of high-efficiency and low-cost technologies in the fields of renewable energy and agricultural science.

Rosa began to explore new business models that could serve the needs of the millions of potential customers that had been left without access to electricity. He began by conducting a market research study which found that almost 70% of the families interviewed spent at least US$ 11/month on non-renewable energy sources such as kerosene, candles, batteries and liquid petroleum gas. Rosa knew that he could lease his solar energy service for close to the same cost as people were spending on these inferior, non-renewable energy sources. The business plan that ensued was dubbed The Sun Shines For All (TSSFA) project. STA performs the manufacturing and assembly of some components used by TSSFA, in addition to being the project’s home.

TSSFA developed a basic photovoltaic solar home system that could be rented for US$ 10/month plus an initial installation fee, a little more than what people were already spending on non-renewable forms of energy.

Operations started in 2004 and TSSFA estimates that it will reach breakeven at the end of year four with 6,000 customers. Projected sales for the first four years of operation are as follows:

STA estimates that providing solar energy to 12,900 families (approximately 52,000 people) would save:

• 9 million liters of kerosene;
• 4.6 million kilos of liquefied petroleum gas;
• 46.4 million wax candles;
• 9.3 million radio batteries;
• 23.2 million liters of diesel fuel.

The Quiron project is an integrated project for sustainable rural development, income generation, employment of renewables for domestic and productive use, biodiversity management, forestation and carbon credits. The viability studies and the development of the business plan are being carried out in partnership with AVINA (a foundation based in Switzerland), the Canopus Foundation (Germany) and the Horus Institute of Environmental Conservation and Development.

The goal of the project is to increase the income of the rural poor through the use of decentralized renewable energy and appropriate micro-technologies. The project also provides income-generating solutions that protect against environmental degradation through conservation and reforestation.

If successful the Quiron project will provide significant value to the local community and economy. By providing people with the tools to improve their income level and living conditions, the Quiron project aims high on social impact.

The Quiron project business model is based on micro-lending. Customers are provided with the means to generate income (seeds, livestock, etc.) and are required to payback those inputs once these products provide income. As with any other enterprise that extends credit, the Quiron project is exposed to credit risk. However, through formal credit checks as well as more informal verification of customer integrity, IDEAAS can mitigate these risks.

Further information

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Author Prepared by Yerina Mugica under the direction of Professor Ted London Publication Date 2 Aug 2004 Document Type Case studies Issue/Topic Business Role/CSR Development Electricity Utilities Energy & Climate Region Latin America Country Brazil		374 kb   162 kb   356 kb   63 kb