In Colombia, two million people and approximately 66% of the country’s territory does not have access to the electrical grid. Peasants, indigenous, and Afro-descendant communities, who live without grid, usually satisfy their needs by using diesel generators. Communities have to pay high costs for the fuel and 99% of them have less than 6 hours of service a day (Florez, et al., 2009).
Colombian situation is a mirror of what is happening globally. According to United Nations, in 2015 about “2.8 billion people had no access to modern energy services and over 1.1 billion do not have electricity” (UN, 2015).
Discussion about renewal energy has grown in the past decades. The FAO of the United Nations, for example, promotes the generation of electricity from photovoltaic solutions as a possible vehicle for agricultural and rural development (van Campen et al., 2000). However, in many contexts, the success of such efforts is limited due technical limitations, lack of basic skills in the management of solar solutions, and limited financial support.
The aim of this article is to analyze the transformations and adaptations needed to develop a business model in order to provide affordable and manageable solar energy solutions to vulnerable population in isolated rural areas. Specially, the article highlights how to incorporate a sustainable approach (social, financial, and environmental value generation) to consider a wide range of stakeholder interests, including environment and society. It also shows how to develop such an approach from the early development of start-ups.
To do so, we examined the experience of Hybrytec, a solar-energy Colombian start-up that strengthened its business model to include a triple bottom approach (balance among economic, social and environmental issues). Helped by ECOS group, a Swiss investment fund, the business practices evolved and new management practices were implemented.
A qualitative approach was taken. In-depth interviews with several stakeholders of the company were conducted (CEO, employees, local distributors and clients). Categorization and analysis of the data was conducted and validated with secondary sources (triangulation process).
Hybrytec, in a short period of time, became leader of its segment with 23% of the market share, providing basic electricity needs for 43.400+ people. Its business model was re-configured to create social and environmental value. For one of its business lines (which represents 40% of the revenue), Hybrytec developed a network of distributors. The network includes over 200 rural small entrepreneurs that receive training to design and distribute solar energy projects in remote areas. A second business-line is related to social impact projects. These projects -normally financed by public and international cooperation resources- are aimed to impact vulnerable or isolated communities by providing them with electricity, water pumping systems, and cooling through solar energy. The third line develops large projects with private companies to reduce their CO2 emissions.
The evidence of the case shows that through a profit-making initiative it is possible to develop a business model that creates social and environmental value by empowering low-income populations, and lowering barriers to access to safe, affordable and clean energy.
5a Corporate sustainability strategies (and sustainable entrepreneurship)
