Bangladesh-based startup SOLshare developed the world’s first peer-to-peer solar energy trading platform, making clean energy affordable and accessible to off-grid households through a decentralized system of energy distribution. SOLshare was the IIX Growth Fund‘s first Bangladesh investment.
We sit down with Dr. Sebastian Groh, Managing Director and Co-founder of SOLshare, to talk about how this “Airbnb of Energy” is helping communities in rural Bangladesh move up the energy ladder.
Tell us about SOLshare and the impact it’s making.
SOLshare provides a platform for peer-to-peer solar energy trading and a pay-as-you-go solution for low-income households in rural Bangladesh. We interconnect Solar Home Systems (SHS) and aim to empower communities to earn a direct income from the sun.
We enable the growth of local livelihoods by improving access to sustainable and affordable clean energy. Our automated electricity trading model allows owners of SHS to earn additional incomes by selling electricity from their solar energy systems and make excess energy available to the community. SOLshare supports several SDGs, including alleviating poverty (1), gender equality (5), clean energy (7), sustainable cities and communities (9) and climate protection (13).
What pain point are you addressing and how are you addressing it?
Bangladesh has the highest density of SHS in the world, with over 4.5 million systems installed across the country. We found that a vast amount of excess energy (up to 30%) is produced across the millions of systems in the field. Yet, everybody needs more power, but is constrained by their system’s respective designs. Allowing the people to share (excess) electricity in an effective, flexible manner creates incredible value.
What are some of your main challenges in growing your company?
Finding the right team who understands the idea was a big challenge at the beginning. Also, Bangladesh is a cost-sensitive market—low costs are critical to ensure a profitable business. The prohibitively high cost for consumers to switch electricity providers also lowers our chance to move them from our competition.
Getting end-users to adopt the technology is not an easy task either. Citizens in rural areas of Bangladesh and similar countries are usually not familiar with smart-grid technology. The lack of solid business rules and excessive bureaucracy also add significant costs to our operations.
What is your plan for growth?
SOLshare currently has 20+ operational Peer-to-Peer (P2P) grids on the ground, and is poised for a massive scale-up with another 100 to be installed this year in partnership with Grameen Shakti, which has single-handedly installed close to two million individual SHS to date.
We’re also constantly working to further improve user experience and minimize technical issues. SOLshare, being a start-up, is still in the process of growing, but the market implications for its innovative technology are global. SOLshare has already found huge market potential across South Asia.
Globally, 2.3 billion people live with either an insufficient or complete lack of access to electricity supply . Therefore, our main target will be providing access to energy to households and small businesses in off-grid rural areas to address an untapped global market in wait. For example: since 2010, US$3.9 billion has been invested in off-grid electrification, providing 360 million people with access to electricity (as of 2017). I believe the time of top-down planned energy generation at locations where energy is not needed is a thing of the past.
I also strongly believe that the new energy world is fueled by the 5Ds: Decentralization, Decarbonization, Disruption, Democratization, and Digitization. Having said that, our solar P2P grids may very well represent the future of utilities globally.
What would you advise other impact enterprises when raising capital?
My first piece of advice to other impact enterprise is that your idea should be a solution to an actual problem. SOLshare has been able to raise capital and grow at such a fast rate simply because we discovered a better solution to an existing problem that people were not aware of.
The next step is all about the presentation of the solution. By making people understand why your idea is necessary and why you should do it will set you on a very good track.
What was it like working with IIX?
I would rather say what it is like. Our collaboration increases in intensity every year. We worked with IIX even before we were incorporated. Rob [Kraybill, IIX Managing Director] acted as our mentor during and after the CTI PFAN program in 2013/14 and has been supporting us since in various capacities.
Once SOLshare matured, our collaboration intensified. IIX undertook an SROI impact assessments on our grids and supported us in getting our financials going. We are very proud to have been the IIX Growth Fund’s first investment in Bangladesh. Rob now serves on our Board of Directors. It has been a tremendous pleasure working with IIX and continues to be, jointly driving the impact from the backstreets to Wall Street.
How did you come around to creating SOLshare?
I used to work on Europe’s biggest trading floor in Frankfurt in investment banking during the pre-Lehman era. I would be lying if I said I didn’t like it. However, I already felt then that there were deeper things I wanted to explore. While still at University, I attended a talk on How to do Business with the Poor, and became interested to work with the low-income sector. While working as a consultant at MicroEnergy International, which brought together microfinance and decentralized energy supply, I saw a variety of innovative energy solutions (and their shortcomings). I heard about the SHS program in Bangladesh, then already a world record with over 3 million systems installed. Through my Ph.D. program, I joined the Stanford Ignite Program in 2013, and proposed an energy-sharing model based on the SHS in Bangladesh. So in January 2014, I ventured out to Dhaka and haven’t returned since. These were the seeds of SOLshare—I have been working in Bangladesh as the CEO and co-founder of SOLshare since then.
What keeps you motivated and how do you avoid Founder burnout?
You have to find the balance between going against the mainstream, and still being able to work with it. Otherwise, things can get very, very difficult. You need to be 100% passionate and serious, otherwise you’ll get lost on the way and become frustrated. Find a team with complementary personalities. Find a good mentor. But most importantly: Do it. Try it. You will never know if you don’t try, and one day you may look back and regret it.
As for the Founder burnout, I don’t think I have figured it out yet. I know well-being is extremely important not only for you as a Founder and your co-founders but for the entire company. I think it is important to realize that you are running a marathon, and not a 100 meter race!
Dr Sebastian Groh is the Managing Director and Co-founder of SOLshare.
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