Selco India: The Art Of Sustainable Business And Addressing Social Needs

Harish grew up in Rourkela, India and completed his undergraduate in Energy Engineering in Kharagpur – an academic path he says is driven by expectation in India.

He furthered his studies in the USA, completing his Masters and PHD in Energy Engineering at the University of Massachusetts. While working on his PHD in the early 90s, he joined a research trip to the Dominican Republic where he saw solar being used as a way to uplift society on a small scale.

This inspired him to change his PHD thesis and to research how solar could be used to reduce poverty. While this trip was a catalyst for Harish, he cites his realization of the unjust barriers to a better life in India (e.g. he was able to attend an elite school while many of his peers didn’t even have electricity) as the underlying motivation to do something about poverty.

In 1995, Harish set up SELCO India which, at its core questioned 3 key assumptions:

• Poor people cannot afford sustainable technologies
• Poor people cannot maintain sustainable technologies
• Social ventures cannot be run as commercial entities

“The poor are not beneficiaries, the poor are partners.”

Harish Hande

The idea was to empower the poorest of India whose needs were largely ignored by service providers.

This has always been the principal objective of SELCO along with the ability to provide customized power solutions to its customers. These were the people of India that burned kerosene, coal and wood for their light and energy needs (with severe health and environmental implications).

For Harish, the lightbulb moment (pun intended) was when a street vendor explained to him that “Rs.300 a month is expensive, but Rs.10 a day is fine”. On further investigation, Harish learned that a street vendor could pay Rs.15 a day for kerosene which was more than the cost of the use of solar power for one day.

It was clear that SELCO’s products not only needed to be fit for purpose but also had to support a financing model designed for daily micro loan repayments that would in effect, make the use of solar affordable on a day to day basis while building up asset ownership.

This model was not without its challenges. Harish started the business with virtually no financing and as a young 20-something year old, he had to convince all stakeholders that he was the real deal as taking advantage of the poor was (and still is) not uncommon:

• Rural, poor communities: Harish lived in a rural Indian village to better understand the unique problems that the underserved were facing on a micro level. He also installed the first 500 lights himself and traveled from village to village explaining the value proposition
• Banks: The daily financing model had not been done before and banks had not yet considered these communities as potential customers. Harish had to demonstrate that the model worked and that he would be around for the long haul

To address the second myth, Harish built teams of local technicians from rural areas to maintain the solar panels and distributed infrastructure. This model created local jobs and the organization has grown to employ 560 employees, most of which come from rural areas.

The 3^rd myth, to Harish, is about having a long-term business vision that meets social objectives as well as financial objectives. He argues that these two elements are critical for long-term business sustainability.

He jokes that SELCO is labeled as socialist and communist and yet, the unicorns of Silicone Valley are still not profitable, while SELCO has been profitable for the last 12 years.

“We have a joke here that we started the same year as Lehman Brothers and we still exist.”