Founded in 2007, Greenlight Planet is a leading US-based company focused on delivering affordable energy to the world´s 1.2 billion off-grid consumers.
Dedicated to both innovation and value, Greenlight Planet´s Sun King™ Solar Lamp products are the first in the rural marketplace to burn for 30 hour straight and offer a breakthrough five-year lithium ferrophosphate battery. The lantern is tremendously versatile and can be nailed to the wall, used on a stand, hung from the ceiling, or carried by hand.
In terms of pricing, the brand is the most affordable in its category because of its performance and lifespan. The product is built to last. The company offers the best warranty service in the field and is proud of its impeccable record. Speaking to POWER TODAY, Anish Thakkar, Co-Founder and CEO, Greenlight Planet reveals that over the past six months, the company has been rapidly expanding its operations and network of agents to encompass 95 per cent of India´s off-grid population.
The company´s exponential growth has been fuelled by two distinct factors: its intelligent, durable, and affordable products, and its unique distribution model. The company has sold over three million of its award-winning Sun King™ solar light and energy devices to off-grid homes in 30 countriesù1.5 million of these devices have been sold in the last twelve months.
´Today, the company has 6,000 village direct sales agents located across India, Kenya, and Uganda as well as 680 full-time employees across 11 offices in the United States, Africa, India, and China,´ says Thakkar.
As far as investment is concerned, most of the players in the micro-grid space take cautious steps while investing.
This is due to investment risk as well asthe social obligation of providing cheaper power. So far, the company has invested Rs 127 crore in the business. Suggests Thakkar, ´The business is a for-profit organisation geared around achieving a critical social mission.´ Meanwhile, he also has a clear-cut business philosophy, and sends a message to his peer group in the micro-grid space about the need for clean energy, which can be achieved in a sustainable and scalable manner through commercial and profitable business ventures and not charity or donations.
The company has experienced a 100 per cent growth for the past three years. It has sold three million Sun King´ solar lamps since 2009 and serves over 15 million users. Thakkar points out, ´In a five-year period,one million lamps were sold in the last eight months alone and the goal is to light 100 million homes by 2020.´
Importantly, these projects certainly carry a certain amount of risk - like any other business venture. Here, the company´s intention is to serve the toughest and remotest regions in the world with clean energy, so it is quite a challenging task. Thakkar adds, ´At the same time it is profitable, if done correctly, as we have seen and experienced in several parts of our business. We are expected to break even in FY 2015-16 and that´s when we will start making profits on investments that we have already made.´ In 2008, the company raised a seed fund of $500,000 drawn from Chicago-based angel investor, Prabha Sinha, after ´crashing´ the ZS Associates Company Christmas party. ´I had left ZS Associates a few months ago and showed up that night with a prototype of the lamp in my hand,´ he says.
The Series-A funding of $400,000 was led by Bamboo finance in 2012. This year, Fidelity Growth Partners India led the Series B funding of $1,000,000.
Meanwhile, since most businesses have a mix of debt and equity financing, too little equity could prevent the company from securing or repaying loans, while carrying little or no debt could indicate that you are too risk-averse, and that the business might not grow as a result.
´So a 50-50 mix of debt to equity is ideal and very stable from financial risk, leverage, and sustainability standpoint,´ Thakkar says, while explaining risk mitigation in this business.
The company´s go-to market strategy has two distinct business models practised in India and Africa. One is, through internally incubated developed distribution network of Sun King Business Associates (SBA) who are village level micro entrepreneurs, carrying out door-to-door selling of the lamps in their neighbourhood. Over the last five years, the company has created a network of nearly 6,000 such SBAs, who are involved in selling their lamps, primarily in Bihar, UP, and Orissa.
´The other is through levera¡ging our partner´s distribution network in the regions where we have a market for selling our products. The partners typically consist of Micro-Finance Institu¡tions (MFIs), NGOs, and other local rural networks,´ he explains. Meanwhile, both channels have their own advantages and it is ideal to have this combination to ensure that the end consumers in these markets are well-served. As far as potential market is concerned, Bihar is one of the biggest markets for the company. While it was challenging to begin with initially, Greenlight´s efforts have really paid off. The other states with potential are UP, Orissa, and the North-East belt.
Energy services are essential to meet basic human needs, reduce poverty, create and accumulate wealth and sustain advances in social development. There are a billion-and-a-half people who don´t have access to electricity and depend on dangerous alternatives.
According to Thakkar, customers have shown considerable savings from lowered kerosene consumption and increased revenue due to improved productivity after sunset. As per an internal research by Greenlight, using Sun King lamps, results in 25 per cent increase in household income, thanks to the ability to work at night and 75 per cent increase in study time. Moreover, it amounts to savings of nearly Rs 9,450 after switching from kerosene. Access to adequate, affordable, and basic modern energy services is thus crucial for achieving sustainable human development.
Sun King has a profound impact on life:
Sun King improves education: Independent studies have reported a 75 per cent increase in daily study time for school-going children.
Sun King improves safety: A 2006 Journal of Energy study found one in 24 off-grid homes reported a catastrophic home fire caused by a kerosene lamp exploding or tipping over, igniting the homeùabout half of the fires reported lead to a death. ò Sun King (probably) improves health: A 2009 Berkeley study found women were nine times more likely to contract tuberculosis if their home used a kerosene lamp, than a home nearby with electric light.
Sun King helps the environment: Each Sun King displaces the use of a dirty kerosene lamp, preventing about 190 kg of CO2 emissions each year-Sun King homes in aggregate offset about 500,000 tons of CO2 emissions each year!
At the end, being into the micro-grid space is not any one´s cup of tea considering the amount of capital cost that goes into it. Moreover, the biggest challenge is to get funding from either nationalised or private banks. Complains Thakkar, ´It is a difficult task because banks want to see a financial track record for your business that demonstrates your ability to repay the money they´re lending you.´
However, companies like Greenlight Planet don´t have a track record of past profitability. Neither do they have a ton of fixed assets on the balance sheet that can be offered as collateral. Commercial banks have stringent requirements in terms of profitability records and collaterals, which coupled with very high interest rates, makes it an unviable option during the nascent stages of the business - when the need for capital is highest.
Hope the Power Minister is listening!
- Rahul Kamat
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