Developing Power Business Plan: Empowering The Bottom Of The Pyramid

CSS Publication Number: 
CSS04-08
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Abstract: 

The purpose of this thesis is to develop a business model for a renewable energy company called Developing Power. This business model is a response to the need for a viable solution for effectively meeting the electricity requirements of large rural off-grid villages in developing countries. The research is presented in the form of a business plan followed by appendices that provide additional detailed support for the business model.

Developing Power designs and constructs hybrid power systems, which are a combination of energy technologies (often solar, wind, and diesel power) to achieve optimal performance at the lowest cost. Developing Power hybrid systems are 1/3 the cost of traditional grid extension and provide electricity at 1/5 the cost of what consumers are currently spending on inefficient forms of energy. The Developing Power business model relies on five steps to implement the use of hybrid systems:

1) Partner with non-governmental organizations to obtain access to local markets and to develop deal flow for the company,

2) Design optimal systems in a sophisticated software program called HOMER (Hybrid Optimization Model for Electric Renewables) and construct systems based on this optimal design,

3) Establish Energy Service Companies (ESCOs) using local labor to maintain and operate the hybrid power systems,

4) Implement a prepayment system based on smart cards and electricity meters to collect payment and manage system use, and

5) Sell the complete package system to a range of potential owners, the most likely being a regional or local utility.

The key finding of this research is that by incorporating important lessons learned from previous rural electrification projects with the innovative use of hybrid power optimization design andprepayment systems based on smart cards, the Developing Power business model has the potential to be a scalable solution for 30 million people that lack electricity. In addition to earning a financial return, Developing Power expects to provide $1.5 of social and environmental benefits for every $1 invested in the business.

Publication Type: 
Master's Thesis
Full Citation: 
Baron, Scott Gregory. 2004. Developing Power Business Plan: Empowering The Bottom Of The Pyramid. Master's Thesis, University of Michigan: Ann Arbor: 1-72.
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Publication Status: 
Published