Lara Sinha

Solar Serve, a clean cooking revolution in Vietnam

SEED Interview Series 2015
BoP as customer
BoP as supplier
employment
Environmental Impact
Last mile distribution
Housing or Construction
Vietnam
East Asia and Pacific

We spoke to Bich Tan, manager at Solar Serve, to find out how they are helping people on a lower income access cleaner cooking stoves, providing jobs and what they now need to scale their business.


What does your business offer to your clients? What is the core value proposition? In 2000 the Solar Serve charity was setup to develop alternative energy and solar technology for the benefit of all people. In 2009 we started a social enterprise to start selling these products- a solar cooker, solar water heater and a solar panel system. In their production we provide jobs for local and disadvantaged people.

Tell us about your beneficiaries. Who are they, how do they use your product/service?

We have identified three levels of customer for our product. Richer people are interested in our solar panels, we analysed the customer for this is 7-10%. The middle class are interested in our solar water heater for schools and hotels. This focus is 30-40%.

Most of our customers we focus on are from lower incomes. They are interested in our solar cookers. As we have always worked with solar we had lots of enquiries from our customers about how people can cook without the sun. The price is also very high for those on low incomes. So we started researching a cleaner cooking stove. We tested it and started producing it for sale. This is now our main product for those on a lower income- from 2012 to 2014 we sold over 2,700 clean cookers. Now we want to develop the clean cooker model further in order to reach more people.

What are the costs to your customers?

We have 3 sizes of clean cooker. A small size for a family of four people is US$13. The medium size cooker is USD$17 for a family of 4-6 people. The large cooker is for commercial cooking for noodles or food for animals for a small business. That would be USD$28.

In addition to this is the cost for fuel. For those in the mountains they wouldn’t spend any money on fuel, as the resources are around them. However people who have to buy the fuel in other areas would pay around US$5 a month for fuel for the clean cooker.

Tell us about your impact – social/environmental/economic/health

The clean cooker stove has a 60% reduction in fuel compared to using a standard stove, which is good for the environment. It has a 60% reduction in smoke, which is hugely beneficial to the health of those spending hours cooking each day. It also has a 40% reduction in cooking time, which is a real benefit to the women working with the product, saving them time on this daily task that they can spend on other activities.

 

Do you have partners? Do you regard partnerships with other actors as a key route to scale or do you prefer to go it alone? Last year (2014) we started testing the clean cooker with SNV. SNV tested the clean stoves in the lab and is now testing on the ground in 2 districts with local women. We have distributed 120 clean cookers to test against other stoves. The results are starting to come back in and they are really exciting. The people like our model.

We have already tested the models ourselves on site- people tell us they save fuel, their kitchens are cleaner. But to have SNV testing our product and sending us the results makes us very happy. We see our product is really useful for low-income people.SNV are also helping to build the system in the local area.

What challenges have been encountered during implementation? What solutions were adopted to overcome these challenges?

The challenge for us is selling an environmentally friendly product in Vietnam- this topic isn’t really popular. We have a lot of expenditure on research and making the government and consumers aware about climate change and deforestation. This is the first challenge from the product.

The other challenge is selling to low-income customers. We are a social enterprise so we want to help this population. We are trying to find ways to supply to this customer. Most of the products we sell are not for the middle-income or richer people- they have other options. The low-income customers need more education about why they need our cookers, they want to see the product before they buy it, so we have to take products to remote areas to demonstrate the benefits. How do you appeal to these low income customers and make it easy for them to buy your product? First we create the demand. We’ve connected with churches who want to help poorer people. We help them bring our product to the local people. For example we give 50 clean cookers to local churches, if they are happy with them, they help us distribute more. Distributors get a commission of 20%.

We also work with NGOs. Last year we worked with World Vision, they bought 600 clean cookers from us. We worked with them to show them how to use the product.

Where do you see your business in 5 years?

We want to sell more through NGOs, churches and abroad. We are in discussions with a customer from Kuwait. But we are now preparing how to make the clean cookers faster, we can now make 1,000 in one month. But we have had to turn down orders because we cannot supply for it. Last month we had an enquiry from a business wanting to distribute in Nepal, to provide cooking equipment after the recent earthquake. But they wanted 2,000 in one month which we could not supply.

We now see that people are starting to care about the clean cooking trend, as it is harder to find fuel in the mountains. The market is very big in Vietnam. But we need the capital to develop our product. If we had the investment we could lower the cost of the product by buying a machine and buy materials in bulk and lower the price of the product for the poor. The key is always learning how can we lower the cost of the product but keep the quality.

Next steps

We want to work with other people who understand social enterprise. We have turned down some investors because they don’t believe in our vision. Working with partners who have the same understanding of our business is much easier. We can then really improve the value chain of this business. How many trees are we protecting? How many poor people’s lives are we improving?

We are a social enterprise. Making a profit and being successful as a business is very important, but we must keep our core mission. Helping poor people improve their lives is what we do. We also employ and train vulnerable people- 50% of our workers are deaf. If we don’t work with these people then we have lost our calling.

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