Over the last decade, I have worked directly or indirectly with dozens of social enterprises tackling energy access. Solar lights, biomass-powered chillers, and solar pumps are just a few of the well-known technologies that have been proven to dramatically improve quality of life for the global poor and often pay for themselves in as little as a few months. The challenge remains getting them out to everyone who can benefit from them.

Chasing the 2030 Goal

We understand that it’s more than a distribution problem, aspects of which Miller Center originally documented in 2015 in Universal Energy Access: an Enterprise System Approach. There remain persistent business model and financing challenges, which we have explored in our latest paper, Closing the Circuit: Accelerating Clean Energy Investment in India, written in partnership with the William Davidson Institute at the University of Michigan.

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Progress has been made, as evidenced by the number of people lacking modern lighting dropping from 1.5 billion in 2009 to 1.1 billion in 2018. We are moving in the right direction, but not fast enough to meet United Nation’s Sustainable Development Goal #7 of affordable and clean energy for everyone on the planet by 2030.

Optimism Prevails

I go through periods of optimism and pessimism about achieving anything close to such an audacious goal. Logic dictates that the easiest to serve are being reached first, so progress will get harder instead of easier. Sure, I am optimistic when I hear about new technologies, business model innovations, and new investment funds focused on energy access. But I also become pessimistic when I talk to brilliant, committed, focused entrepreneurs who are spending more time fundraising than running their businesses.

Right now, I’m optimistic, having spent last week in Delhi for events including the National Dialogue on Distributed Renewable Energy and an Energy Access Practitioner’s Roundtable. These events culminated Miller Center’s work over the last three years with New Ventures to implement the USAID-supported Energy Access India program, providing accompaniment to a portfolio of 30 social enterprises and developing relationships with key investors.

Much of the optimism comes from spending time with dear colleagues including the New Ventures India team, our advisors, Rakesh Rewari and Harvey Koh, and many of the social entrepreneurs we have worked with. There have been wins for many of the entrepreneurs in the program, including major investment into Cygni and Husk Power Systems.

Yet, lack of capital is holding companies back. $275 billion dollars of investment are needed to provide enough off-grid and mini-grid systems to achieve SDG #7. The best that social entrepreneurs can do for themselves is develop a solid business plan, a justifiable ask, and seek out capital that is aligned. But I am now convinced that ever larger numbers of capable social enterprises with strong business plans alone won’t unlock capital.

To many of us working at the ecosystem level, it is clear that there are many excellent entrepreneurs that are not getting funding, or are getting funding, but not in a timely and efficient fashion. Why is that?

The Risk/Return Spectrum for Clean Energy Investments

One of the biggest areas of learning for me during this project was to better see the energy access challenge from the investors’ point of view. I had the privilege of working with investor-minded colleagues like Mark Correnti (now of Shine Campaign, a co-sponsor of Closing the Circuit) and directly with insightful investors. Through them, I have learned much about what unlocking capital truly means.

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Investors face their own sets of constraints that guide how they deploy capital. In our research for the paper, we detected opportunities for investors to consider alternatives in credit risk assessment to increase access to affordable, short-term debt and to develop a more realistic risk/return spectrum for clean energy investments (especially in India). Progressive investors such as SunFunder are proving that such investments can work. We hope these models will be built on by others.

Of course, it’s easy to write these ideas here and much harder to implement them. Yet, given the proven clean energy solutions we have at hand and the knowledge that energy access is an enabler for so many quality-of-life improvements, shouldn’t we all continue our push to support the intrepid energy entrepreneurs who are at the forefront of this movement?

About the author

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Since joining in 2008, Andy Lieberman has been a driver in developing Miller Center's strategy, programming, and curriculum. He is also responsible for many of the efforts to formalize Miller Center's knowledge into whitepapers and presentations.