Lessons on doing more for clean energy with less from emerging markets

Last week’s Cleantech Forum in San Francisco kicked off 2016 with the timely theme, “more with less.” At the Forum I heard from many companies and investors with exciting ideas for how to scale up cleantech using leaner resources, but the ones that struck me most were the companies working to scale up renewable energy to the masses in emerging economies like Kenya and India.

Justin Guay (Climate Program Officer, Packard Foundation), Christopher Horner (Founder & CEO, Powerhive), Sandra Kwak (10power), and Ned Tozun (CEO, d.light design) spoke on the “More Power to All: Democratizing Energy Access” panel. Each shared the successes and challenges they’ve faced building cleantech businesses in emerging markets.

The opportunity to bring distributed generation to all promises significant economic and environmental benefits. Regions that are currently in desperate need of electrification, such as parts of rural Uganda, could leap frog the dirty industrialized power generation that characterized the US’s growth the past two centuries straight to clean sources, like solar. Distributed generation makes great sense in places like Mali where, one panelist noted, grid extension can cost up to $19,000 per kilometer.

In many developing countries, electrification can empower children to study after dark and succeed in school, to spare families currently using kerosene stoves to power their homes the risk of dangerous air quality or fire, and to improve medical care delivery. It can enable a small business to make plans around a reliable source of electricity and increase its productivity.

At the same time, there are significant challenges to electrification in developing countries that beg for solutions that do “more with less.” Lack of capital and financing structures in emerging markets often prohibits individuals and businesses from investing in distributed generation that would increase their quality of life and productivity. As Kwak explained, “the biggest problem right now is that there’s no financial liquidity for people in places like Haiti to buy solar and open distribution pipelines.” Kwak’s company 10power seeks to build innovative finance models that solve this problem.

Additionally, the long-term nature of payback from cleantech companies working in emerging markets deters some investors from getting involved. Panelists called for increased contributions from impact investors and stronger financial infrastructure in emerging economies. Guay from the Packard Foundation noted that the philanthropic sector can play an important role in jump starting cleantech in emerging markets.

The Cleantech Forum gathered some of the most prominent VC and startup leaders together to think through how to “do more with less” to create a greener future. I hope that attendees took note of the immense economic and social impact opportunities for renewable energy development in emerging markets showcased at this panel.  After all, necessity is the mother of invention.