The Problem of Energy Poverty

About 1 in 3 Indonesians, representing about 75 million people in Indonesia, do not have adequate access to electricity.^[1] 50% of them are located in non-electrified remote rural villages, and mostly rely on traditional sources of lighting such as kerosene lamps, oil wicks and candles.^[2] The use of these traditional lighting creates health problems due to excessive intake of particulate-laden kerosene fumes and exposes users to fire hazard. It further harms the environment as toxic substances like Volatile Organic Compound (VOCs) and carbon are released into the atmosphere.^[3]

However, existing clean energy innovations and other high-impact technologies are rarely able to reach the Bottom of the Pyramid (BoP) market, which often falls beyond the reach of the mainstream distribution network. Furthermore, customers in the BoP market are likely unable to afford such technology given their low and unstable income.

To bridge this gap and allow rural communities to access cheap, safe and clean sources of lighting, NDI creates a rural distribution network that taps on local women networks. It trains rural women to become last-mile entrepreneurs of solar-powered lamps for rural market. Many studies have shown that women have massive untapped potentials, among others strong social network and financial savvy. For instance, the USAID have found that for every dollar that a woman earns, 90 cents is reinvested to the family, as opposed to about 40 cents for men. Hence investing in women is generally believed to create a ripple effect of benefits that can extend to their family and community.

Program Overview

The first phase of the Program Rumah Terang Nusantara saw the introduction of solar lamp as a viable option to replace kerosene as the main source of lighting in rural communities. NDI identified Pulau Air Raja, Kecamatan Galang, Batam, Kepulauan Riau Province, Indonesia, as a suitable project site. The NDI team worked closely with the village leadership to introduce this new technology to the community through public forums and free product trials.

Following a series of house-to-house market assessment survey to understand the rural community's income level and energy consumption patterns, the team designed a suitable financing mechanism for the lamp in the form of weekly installment. The feedback from the community was overwhelmingly positive and the subsequent adoption rate of the solar lamp was high.

This was followed by a second phase which focused on women entrepreneurship training, with the main objective of extending the reach of the solar powered lamp to surrounding villages. The pilot class consisted of eight rural women who were selected to take part in this entrepreneurship training programme.

Key Program Features

NDI designs a customized entrepreneurship training program, the Program Rumah Terang Nusantara, to suit the rural context- where most women had little formal education with basic literacy and numeracy skills. The training is structured to be highly interactive and includes modules like product knowledge, marketing, sales and bookkeeping. This is followed by a guided practicum session where the women practice their newly acquired skills in a new environment beyond their immediate social circle, such as a neighbouring village.

Instead of the micro-credit system, NDI adopts a micro-consignment model to ensure that the women entrepreneurs will not fall into debt. The entrepreneurs obtain the solar lamp inventories upfront and pay NDI only after they have successfully made sales, instead of paying upfront. Moreover, they earn a commission for every lamp sales made, which helps to supplement their household income.

The participants who successfully complete the entire training programme are invited to a graduation ceremony, where they are given an official program T-shirt and a “business-in-a-bag” start-up kit. They are officially known as Ibu Rumah Terang (Mothers of Light). They work in partnership with NDI as last-mile entrepreneurs to reach the bottom of the pyramid market in Indonesia with solar lamps and other high impact products and services.

Scaling Up

Having successfully implemented the Program Rumah Terang Nusantara in its pilot village in Pulau Air Raja, NDI aims to replicate the program in other areas in Indonesia.

In 2013, NDI did their second pilot program in Pengujan, Tanjung Pinang, which subsequently failed due to unsuitable village conditions. Learning from this failure, one year later in 2014, it started the program in a third site, Pasir Panjang, Kec. Rempang Cate, Galang, successfully. In 2015, NDI worked with grassroot volunteers to do a large-scale energy survey in villages in Lampung, Pekanbaru and East Java, and shortlisted another 8 villages to implement the program.

Building on its customized training material and adopting the Train-the-Trainer approach, NDI further pursues a nationwide scale-up plan by developing partnership with local NGOs in Indonesia that share its vision of women empowerment to broaden the reach of Program Rumah Terang Nusantara.

Mobile Reporting System

One of the earliest technologies that NDI adopted was a mobile reporting system. This stemmed from its observation that the manual data entry that were used by the women entrepreneurs and the village coordinator was time-consuming and prone to inaccuracies. With the mobile reporting system, sales and inventory information can be sent from villages to NDI's central dashboard in real time, thereby improving communication and work efficiency.

The IT Collection

In 2015, NDI launched The IT Collection to cater to the growing interest of urban consumers in solar lamps. The IT Collection is an online platform that features high-impact technology that effects social change. It targets both individual and corporations who may need the lamps for personal use and Corporate Social Responsibility projects respectively.