“Women feel the most pain from energy poverty and they also stand to gain the most from a transition to clean energy.”
EMPOWER GENERATION AT A GLANCE
Location: San Francisco, CA, and Nepal
Team Members: 6 in the US (2 full-time); 9 in Nepal
Impact: Built a network of 19 solar businesses and 158 solar sales agents to provide 50,000 lights to 250,000 people.
Recognition: 2015 Clean Energy Education and Empowerment (C3E) International Award for leadership
Structure: Hybrid nonprofit/for-profit
2015 Revenue: $500,000 in sales
Worldwide, around 650,000 women and girls are sold across international borders into some kind of slavery each year, often as a result of deep, systemic poverty in their communities. Without economic alternatives, women and their families are more vulnerable to the false promises, desperation, and risky behavior that leads to trafficking. Meanwhile, two billion people lack access to reliable energy. Tackling just one of these issues is obviously tough. Tackling both of them at the same time? That just might be brilliant.
At least that’s what social enterprise Empower Generation is hoping. The organization uses the power of clean energy business to enhance the lives of women in remote, impoverished communities while improving access to energy in those same spots. Empower Generation trains and supports women in starting their own solar retail companies, selling and servicing solar lanterns and home energy systems door to door via a network of sales agents. Meanwhile, the female solar retail CEOs gain business skills, a good income source, and — perhaps most importantl — respect within their communities. We caught up with co-founder and executive director Anya Cherneff to learn more about how having two missions can be twice as powerful.
How did you end up starting this business?
Anya Cherneff: I’m coming from a background of working in nonprofits around women’s rights issues, especially anti-human-trafficking and anti-prostitution. And I got a bit burnt out. I came to this realization that rescuing victims of human trafficking is incredibly important and it’s a really big job, but it’s just like putting a Band-Aid on the larger issue. It’s the systemic poverty that needs to be addressed. To put it in economic terms, in order to reduce the supply of people into exploitative labor, you have to provide them with value-adding job opportunities in their communities.
My now-husband Bennett [Cohen] was working in clean energy. He pointed out that there are two billion people around the world without reliable access to energy. “What if you trained women to work in this industry?” he asked. “What if we capitalized on this market opportunity?” We thought that was a cool idea. We liked that it was combining our two passions. We called it “Solar Babe” for a long time and joked about it. And eventually we had joked about it enough.
We didn’t want to reinvent the wheel or impose any idea that didn’t fit a particular community. So we went on what we called a “learning tour.” We travelled for just under a year through a few different countries in South and Southeast Asia. In Nepal, the energy poverty situation was obvious. Less than 40 percent of the population has access to electricity. And those that do — even for the tourists — you literally get a schedule from the government telling you when your power is going to be on every day. It’s usually between like midnight and 3:00 a.m.
It was really clear that there’s a big need there. And I’d lived and studied in India, so I was familiar with Hindu-based social structures and knew how oppressive they can be to women. Women are basically considered property of their families until they are sold to their husbands’ families. They are second-class citizens or below.
And then when I was in Nepal, I met my business partner Sita Adhikari. I was on a trip learning about this great women’s micro-finance cooperative that was working really well, and here is this woman telling me that she’d grown it as a volunteer. I’m thinking, “In our culture you would be the head of your own company or a leading CEO, and here you’re just a star beneficiary of a nonprofit’s program.” During that meeting, she said to me: “My real dream is to start my own business, and I would like to employ at least 100 women.” That was our lightbulb moment. All of the pieces came together and I thought: “Well, if this woman is willing to give our ‘Solar Babe’ idea a try, let’s support her.”
Can you explain the business model?
AC: We import clean energy technologies, like solar home systems, solar lamps, clean cookstoves, water filters, etc., and then we sell them through our women-led distribution network of local retailers. So we do two things as a social enterprise. On our nonprofit side, we work as a capacity-builder. We identify rural women who are uneducated and inexperienced in business and train them to register, own, and operate their own clean-energy retail company. And on the for-profit side, we import technologies and sell them wholesale to our retail network. Those retailers then sell products or clean energy to their last-mile customers.
“WOMEN ARE REALLY THE ONES WHO ARE GOING TO DEVELOP THEIR COMMUNITIES IF THEY ARE EMPOWERED ENOUGH TO EARN A SUSTAINABLE INCOME.”
You also do loans and funding? How does that fit in?
AC: On the capacity-building side, to get the women’s businesses off the ground, we provide a whole range of support services. We do a lot of business skills training for the entrepreneurs. We provide discounts for the purchase of these clean energy technologies, and then to get them started we provide them with a $1,000 line of credit or working capital loan for their first order of inventory. They recruit sales agents that work on commission, selling solar door to door, and we also provide branding and marketing support for them.
You also help the people in that community with loans?
AC: We sell two different types of products: small solar lanterns, which cost from $10 to $35, and larger solar home systems, which cost $100 and $350. The systems include several lights, enough power for an efficient television or a fan, and charging for a small tablet and mobile phones. For that we offer pay-as-you-go options to our customers. So, instead of buying the entire system up front, which most customers can’t afford, we allow customers to pay us on a monthly basis in similar installments as they’re already used to paying for kerosene; say, $10 a month over a period of three years, after which they own the system.
The majority of our customers actually purchase a solar lantern without needing any credit, because the payback on a solar lantern is usually less than three months, based on the amount of money they spend on kerosene and candles.
We’re basically creating a market with every woman whose business we help launch. We’re creating sustainable demand for the products that we import and sell.
AC: Throughout the world, women are undervalued in terms of the formal economy, and we want to work towards some sort of systematic change to create gender equality. That’s the warm and fuzzy reason. But another real reason is that women are the best business opportunity and the best business investment. Microfinance has proven that in these remote developing communities, women are more reliable. They tend to pay back their loans more effectively, and we see that the income that they earn is put back into the community and their families in a really meaningful way. So whether that’s paying for their continued education or for their children’s education, or to support some sort of school, or some sort of community installment, we see that women are really the ones who are going to develop their communities if they are empowered enough to earn a sustainable income.
And then on the energy side, in Nepal at least, we find that our women are usually marketing to women as the household energy managers. Women are the ones responsible for the majority of the household energy inputs, like cooking fuel or lighting. So they have a good sense of how much they are spending, how dangerous or harmful things like kerosene can be, and how ineffective products like candles can be. Women feel the most pain from energy poverty and they also stand to gain the most from a transition to clean energy. It’s very effective for a woman entrepreneur in her community to get up, take her solar light, and explain to another group of women how this light has changed her life. It’s really relatable.
What are the largest challenges you’re facing right now with this business, and how are you addressing them?
AC: Surprisingly, having women lead their own businesses is working out really well. We thought that was going to be the biggest challenge — will people accept a woman-run company? There is maybe a little bit of pushback in the very beginning when a woman attends that first training. But then once she starts making her first sales, the impact a solar light makes on a customer’s life is just so self-explanatory. Then the customers become good advocates for her, and she tends to be pretty supported in her business.
So I’d say that the biggest challenges for us are access to capital and working in a high-risk country. Obviously we have to work there, because that’s the type of place that we’re trying to influence, but it can be tough. There’s a reason why Nepal is one of the poorest countries in the world. It has little to no infrastructure. The power is out all the time, for example. The government is pretty inept, if not totally corrupt, and so it can be a really risky, tricky place to get business done.
The third issue is probably finding and retaining talent, because the level of education in Nepal is just not great. We have to do a lot of work capacity-building, not only for the women we are supporting to be business owners, but also for our local team that is supposed to support them.
You started as a 501(c)3 nonprofit, but now you’re making a transition to a hybrid for-profit. Tell us about the transition.
AC: We’ve always wanted and planned to be sustainable [as a for-profit], rely less and less on donor grants, and have a profitable company, from our smallest retailer up to our headquarters. We figure if we’re convincing women to take the risk to start a business and sell these products, we’d better be able to do it ourselves. And going back to the original reason we started this business, it was to capitalize on this huge market opportunity. In Nepal, for example, the off-grid solar opportunity alone is about $440 million annually.
The first few years, we just wanted to prove that our model worked and make sure that we could earn money doing this. Then we spent the next year and a half trying to figure out the best hybrid structure. It gets tricky in the US, working with a traditional charity structure and a for-profit structure. It’s not well-defined.
Now we’re at the point where we figured out the structure, we know our model is working and growing and scaling, and we are just at the beginning stages of raising seed capital for the for-profit.
Is there anything you’ve learned in five years of working with women as entrepreneurs that has surprised you?
AC: I was really nervous in the beginning that we would have a lot of women drop out of our program in the first few years, because a startup never really makes money right off the bat, and I thought if it was totally about income-generation, we wouldn’t be giving these women what they needed to keep going. And none of them have dropped out for reasons that have to do with not earning enough income in the beginning. They all really quickly recognize the leadership benefits, and see the change in the way their community is treating them. They stay in it first and foremost because of that, and then know that the money part is coming if they continue to work hard. Just having them recognize that on their own was really surprising to me.
1. Empower Generation provides training and loans to women in rural areas who want to run their own business selling clean energy technology to their communities.
2. Women business owners purchase clean energy technologies from Empower Generation at wholesale prices. Empower Generation helps the entrepreneurs set retail prices for the products to help them increase their margins.
3. Entrepreneurs either sell products directly to customers or via a village-level sales agent who earns a commission on each sale they make from the entrepreneur.
4. Gradually, the women pay back the initial loans made by Empower Generation to set up their businesses and purchase clean power products through the profits made by their businesses.
5. Once a loan is paid back, Empower Generation helps the entrepreneur get a working capital business loan from an independent, local microfinance organization in their area. The original loan is then redeployed to help another woman start her own business.
Impact Lenders and Donors
As a nonprofit/for-profit hybrid, Empower Generation is supported financially through donations and grants (nonprofit) and impact investment and debt (for-profit) funding.
Clean Energy Technology Suppliers
Empower Generation purchases clean energy technologies in bulk from suppliers, which it then sells to entrepreneurs at wholesale prices.