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Dissemination Of Solar Home Systems In Vietnam
[top] [end]IntroductionThe Vietnam Women’s Union (VWU), a women’s NGO, in partnership with the Solar Electric Light Company (SELCO), a commercial company and the Vietnam Bank for Agriculture and Rural Development (VBARD), a development finance institution, has been disseminating solar home systems in Vietnam since 1995. The arrangement makes use of a credit scheme where VWU markets SELCO’s systems and administers consumer loans provided by VBARD, while SELCO provides systems and is responsible for service.[top] [end]BackgroundTen million people in Vietnam do not have access to grid electricity, especially in mountainous and rural areas, which directly affects women and children, who have no chance to study, a key factor in the low status of women. The Vietnamese government has encouraged non-governmental organizations to play a role in providing access to electricity to rural populations. Solar home systems (SHSs) are a logical technological solution, particularly in South Vietnam, where solar radiation is abundant.[top] [end]The organizations[top] [end]SELCO-VietnamThis is a commercial company, chosen to be the recipient of the “Award for Corporate Excellence 2001” by the U.S. State Department. The company, (then called SELF), was the first solar energy company licensed to produce sell and service solar electric lighting systems in Vietnam.[top] [end]Vietnam Women’s UnionThe Vietnam Women’s Union (VWU), founded in 1930, represents more than 11 million women in Vietnam, working towards their equality and development. The VWU is a key part of the district and provincial governmental structure. VWU has several businesses such as sale of seeds, fertilizers etc. Its interest in promoting solar home systems stems from the potential of solar home systems in improving women’s lot, reducing pollution and protecting the global environment.[top] [end]Vietnam Bank for Agriculture and Rural DevelopmentThe Vietnam Bank for Agriculture and Rural Development (VBARD) is wholly owned by the Government. VBARD’s outreach extends to 70% of the rural households served by the formal financial institutions. In absolute terms, it provides about three quarters of rural credit in the country.[top] [end]The Solar Home System initiativeIn 1996, SELF installed 200 systems on credit, with a credit recovery record of 85%. Aware that rural Vietnamese women make decisions on most domestic issues, SELF reached a joint agreement for a solar project in support of rural women and children.[top] [end]Phase 1: Pilot projectBetween 1995 and 1998, a pilot project was implemented. This included an innovative model used in Phase 2. This model works as follows:
Important achievements of this phase were: 600 solar home systems installed in five pilot communes providing lighting, access to radio and television, improved cultural activities; 20% utilized solar electricity to sew, make handicrafts and sell sundries – generating income. The key lesson learned was that communication and education activities were key ingredients for successful promotion of solar home systems.
[top] [end]Phase 2: Commercial expansionPhase 2 begun in 1998, is similar to Phase 1, but the advance payment by households has been raised to 25% (from 20%), with the remainder paid over 3–4 years. Monthly interest is charged:
The roles of the three organisations are summarised in the Figure 2. The revolving credit system has been highly successful. Ninety-five per cent of the payments are made on time and there has been no problem with defaults. Households have started coming forward to buy solar home systems on a cash basis. In some specific areas, the local government offers 50% subsidy for people buying solar home systems. In these areas, VWU communes identify the households for subsidy, and provide support for processing these applications.
[top] [end]ImpactsNearly 2000 households and commune centres have installed solar home systems under the project. Solar home systems are used for lighting, accessing information, and generating income to improve living standards in rural areas. About 10% of the families involved in the electrification project have independently purchased black and white televisions. In addition, street lights installed in the village markets provide an element of safety that has extended trading hours.VWU has effectively put solar energy on the agenda at local and national government level and several local authorities have started financing households for purchase of solar home systems. [top] [end]Lessons learnt[top] [end]Building on the pilot projectSetting up demonstration units resulted in creating awareness, which was followed up with targeting opinion leaders and progressive farmers first. The pilot project was instrumental in effecting key changes in strategy, including fine-tuning the technology and addressing problem areas.[top] [end]Focusing on core competenceBy focusing on key competencies, the strategy allows each party to focus on its strength area.[top] [end]Creating local presenceVWU operates through its commune offices, allowing it to respond better to consumer needs. Its presence instils confidence in rural customers. By setting up local sales and service centres, SELCO has involved local people and created jobs both in supply and quick and effective repair.[top] [end]Judicious use of grant moneyAs in its India operations, SELCO treated grant money as investments into its venture. SELCO used the IFC/GEF financing to cover its collateral guarantee to VBARD, thereby ensuring their interest and involvement in the operations.[top] [end]ConclusionsThis programme demonstrates how photovoltaic systems can contribute to sustainable development in remote rural communities. Contrary to popular belief, the experience shows that even in poor rural areas, commercialisation of solar home systems may be possible. This initiative harnessed the core competencies of partners, minimizing risks and keeping overheads low; developing financial mechanisms appropriate for consumers and posing little risk to lenders; creating a local presence and responding to the operating environment. Perhaps the single most important lesson is identifying untapped, potential markets and nurturing them. It also demonstrates that a mass organization such as VWU can play a key role in attracting the support and assistance of local authorities.[top] [end]References1. SELCO, the Solar Electric Light Company website [online] http://www.selco-intl.com. [accessed: 4 August 2004] 2. E & Co Energy Through Enterprise website [online]: www.energyhouse.com [accessed: 4 August 2004] 3. Solar Electric Light Fund website [online] http://www.self.org [accessed: 4 August 2004][top] [end]Download the original article Dissemination of solar home systems in Vietnam: a case study of successful partnership by Soma Dutta (201 KB)[top] [end]Contents: Boiling Point 50 - Scaling up and commercialisation of household energy initiatives
Categories: Boiling Point 50| Vietnam| Solar Home Systems| Solar Photovoltaics| Scaling Up| Partnerships | ||||||||||||
Page created:
27 June 2007; Last edited:
28 June 2007; Version: 0 | ||||||||||||
Pagename: DisseminationOfSolarHomeSystemsInVietnam @HEDON: HEFA | ||||||||||||
