Iluméxico: Working with families to fight energy poverty in Mexico
Iluméxio is a social enterprise based in Mexico that works with solar energy to fight energy poverty. The business model consists of four pillars: TECHNOLOGY: They design, produce and manufacture solar charge controllers, and they use mainly Mexican suppliers for the rest of the solar system components; DISTRIBUTION: The last-mile distribution model is based in local Community Engineers that run a local office, these team members promote, sell, install and provide technical service to all customers; MICROFINANCING: Working with the base of the pyramid requires financial schemes so that people can buy their systems according to their own economic possibilities, the financial products are also custom-made for this market; SOCIAL PROGRAMS: Iluméxico emphasizes complementing products and services with workshops, conferences, knowledge transfer, etc., mainly in sustainable education, financial education and solar energy education. This engagement ensures a good long term relationship. Also, they have different programs to empower local store owners and rural entrepreneurs so they can be trained distributors of the products and services.
Iluméxico aims to provide solar lighting products and technology to rural marginalized communities in Mexico.
The homes that benefit from this program belong to highly marginalized locations in towns that do not have access to the electric grid and are not included in the expansion plans of the Federal Electricity Commission or considered within the social program "Light for Mexico" (Banderas Blancas).
- 2,217 solar lighting systems installed in rural communities with no access to electric grid.
- Presence in over 11 states within Mexico
- 13,000 people have benefited from our programme
- 18 rural schools have been provided solar lighting systems.
- 680 tons of CO2 displaced.
- 7 rural branches in strategic locations across Mexico.
- Pioneer social business model in Mexico: Iluméxico offers highly marginalized communities an affordable opportunity to have access to solar lighting systems through a micro-loan scheme that allows them to purchase a solar system throughout a year with no interest rates. This makes it possible for families that have never had access to energy to purchase a solar system. As they have access to this technology, they are able to perform activities that were previously subject to the light of the day. With a solar lighting system they are able to do activities that increase their income (production) within their household, and also to increase the amount of hours dedicated to academic activities, among other things.
- Creation and development of solar Mexican technology that aims to design affordable and sustainable products for the base of the pyramid and promote social development. The products we design and produce are a product of Mexican technology. The solar lighting systems that are offered for rural communities have 4 basic components: 1 photovoltaic solar panel, 2 LED light bulbs, 1 battery, 1 controller (energy controller component). This technology is easy to adapt and easy to use. Users become familiarized with the technology as special emphasis is made on "technology transfer and adaptation.
- Unique model that seeks to reach the most challenging areas in Mexico in terms of geography and accessibility, reaching highly marginalized communities that have no access to the formal electric grid. Because of our operational infrastructure and our trained staff, we reach the most challenging communities in the country. In many of the locations we work in Iluméxico is the only social programme that has the ability to reach disparaged households.
- An innovative and integral programme that uses access to solar energy as a platform for the implementation of community engagement programmes. These programmes aim to involve users in projects such as financial inclusion and financial education, environmental education (for young students), community organization and other useful tools for development. Our programme also seeks to promote projects that are manged by community members that are interested in solar technology for rural schools, solar pumps, public lighting, or lighting for rural clinics.
- Cutting edge operational model that seeks national expansion through implementation of rural branches or "ilucentros" that are located in strategic areas of the country and aim to provide localized service to our users, as well as finding and offering the programme to new communities that lack access to the electric grid. These rural branches (7) are operated and managed by local young men and woman who have received some level of technical education and are seeking job opportunities within their communities. These young professionals are incorporated into the Iluméxico scheme and become an essential part of the project as they are empowered.
- Creation and promotion of clean sustainable technology that has a positive impact on the environment (displacement of CO2) and on health (people substitute the use of hazardous lighting sources such as candles and diesel as they obtain a solar lighting system).
As a social entrepreneur, Iluméxico began its first operational projects with grants that were procured via national awards and private funds that supported projects with our mission.
These funds provided the necessary grounding to kick-start the project, which involved securing some fundamental infrastructure assets, such as a space to work, basic human resources and technology to produce solar lighting components.
The first grants that were awarded prepared the organization to become a more financially stable project and allowed the current financial setting. Solar lighting programs are often financed by the combination of these 3 models:
- Government funds that allow us to provide subsidized solar lighting systems in the rural context. This implies that the final user pays only for a percentage of the solar lighting system and the government (either federal, local or municipal) assumes the rest of the cost.
- Private companies that have a certain amount of budget assigned to “socially responsible” company sponsored activities can assume some of the costs of the solar lighting systems and may also invest in the implementation of community strengthening programmes.
- National or international calls for sustainable projects that aim to tackle environmental issues by strengthening rural communities. Iluméxico has constantly participated in these public awards to continue its work promoting the use of alternative energies to promote development.
In order to assure that Iluméxico is replicable and sustainable, a decentralization strategy was initiated that that involved the creation of “rural attention branches” located in strategic areas where there is a high demand for solar systems due to the lack of electric grid service, or in many cases, due to the poor quality of the service.
Local young technicians manage these rural branches or "Ilucentros" and provide regular service to the users of the systems, allowing the general number of users to increase. As Iluméxico looks to secure income in each branch it can become independent from national, international or private grants and awards.
Because Iluméxico promotes the use of affordable and sustainable clean energy a great effort has been made to complement the work of the National Energy Agency in addition to a constant collaboration with the Energy Ministry. This has been achieved by going through the agenda of both the Energy Ministry and the National Energy Agency or CFE (Comisión Federal de Electricidad- CFE) to review the areas in which solar energy can complement the national effort to provide access to energy across the country.
Both agencies have trusted in Iluméxico by sharing their long term agenda, which states that communities with less than 5,000 people will not be candidates for the expansion of the electric grid. This accounts for more than 3 million people living in rural areas across Mexico.
The understanding between these two agencies has also been important for the consolidation of alliances with local or municipal government officials, who support the intervention of Iluméxico in rural communities that lack access to the electric grid, making the project viable and sustainable.
In rural México having access to solar technology is generally a new and first-hand experience for users, especially those who live in highly marginalized communities. The use of solar technology represents a unique opportunity not only to have access to energy (sometimes for the first time in their lives), but also to gain useful skills that will strengthen the community as a whole. This is achieved by three main strategies:
- Microloan Scheme: Users in rural communities can purchase a solar lighting system by entering our “microloan scheme”. This consists in compromising to pay-off their system throughout a chosen amount of time, with set fees and no additional interests. Through this scheme users engage in an educational experience to save money, budget their expenses and compromise to a long-term programme. Ultimately, the fact that considerable amounts of people join the programme whole communities benefit from a healthy financial practice that translates into a tangible investment.
- Capacity building through technology transfer: Having access to solar technology implies that users from rural communities interact with innovative technology. This represents a unique opportunity for Iluméxico to transfer useful knowledge on solar technology that will enable users to make the best use of their systems as well as engaging to adopt a clean sustainable source of lighting for their every-day lives. This is achieved by delivering a formal training session on how to use the components of the solar system, the necessary attention that the technology needs and how to procure the “long life” of the systems. Through these practical sessions Iluméxico intends to strengthen its relation to our users and promote equal access to the technology by including in the training sessions women and children.
- Community engineers program: Central to the long-term sustainability strategy that Iluméxico seeks to consolidate is that the solar lighting program is promoted and executed by our “Community engineers”. Local men and woman who have received some sort of basic or technical education and that are familiar with local costumes and cultural aspects of the communities we work in. Community engineers promote and manage the solar lighting programmes in a variety of rural communities where their professional relation to users becomes a personal one through constant interaction, technical follow-ups and payment assistance. Through their presence in rural communities users build a solid relation with Iluméxico, committing to pay for their systems and through community engagement programmes.
The success of the solar lighting program relies heavily on the ability to engage with the communities in question. This is achieved by making sure that in the induction phase of the programme the community participates in the process of implementation and that this is done because of the generalized motivation to have access to energy as well as the shared interest to benefit from the microloan scheme. Community participation is achieved through the following stages:
- Community assembly to make the formal introduction of the solar lighting programme: General call-out to all members of the community to assist the introduction of the solar programme. Through this first gathering the product is introduced and the community is consulted on its current “energy status” and local needs. It is important to stress that if a community feels reluctant of the solar lighting program or decides that they have no need for solar energy, Iluméxico stands down and directs its attention elsewhere.
- Socio-demographic survey: Implemented in the first stage of the program, the aim is to gather information on living conditions, energy necessities, income and production data, level of education among other things. This information is later used to introduce other programs or products into the communities.
- Identification and alliance with local leader: Local leaders are essential to the organization of rural communities. Through a strong leader Iluméxico is able to introduce the programme and the technology so that other members of the community feel safe by trusting the energy proposal. The community leader in sometimes acts as an active representative of Iluméxico, he/she assists with general call-outs, promotions, payments and participation in community engagement programs.
In order to reach more rural communities in different states of México Iluméxico has a successful strategy to involve both the government and the private sector.
- Agencies such as Secretaría de Energía, Comisión Federal de Electricidad and Secretaría de Desarrollo Social that translates into sharing information, and/or grants and subsidies.
- State support programs: Collaboration with local governments in order for Iluméxico to implement solar lighting programmes in specific areas or communities. This translates into grants and/or subsidies that make the solar systems more affordable to final users and also the implementation of other community engagement programmes.
- Knowledge and Information: Establish communication channels with government agencies that allows to have specific information on potential work areas.
Companies and Institutions in the private sector are strategic allies for Iluméxico. Their internal strategies to become a "socially responsible company or enterprise" guides them to establish joint efforts and invest in programmes that have a direct impact on vulnerable contexts. The private sector is invited to join Iluméxico and make direct investments in socially beneficial programs, including the solar lighting program for rural schools and rural health clinics.
External benefits of the project can be appreciated by the segmentation of Iluméxico´s impact; the following data was obtained through a representative population sample in the states of Veracruz and Campeche. The presented data is a result of a comparative study between entry surveys applied before users had access to solar home systems and an exit survey applied a year after the users purchased their solar home system. Even though this data does not contemplate the totality of the users it portrays a general idea of the project´s impact. The most influential areas are:
- Level of user satisfaction with the program: 60%
- Number of users who have actively replaced the use of hazardous lighting sources for the use of a solar lighting system: 88.4%
- Average use of solar lighting system: 2.8 hours a day.
- Users that use the solar lighting system to perform domestic activities: 37%
- Users that use the solar lighting system to perform productive activities: 26%
- User who obtained a solar lighting system dedicates 2.3 hours a day to productive activities within the household, which translates into an increase of 33%.
- Users who have purchased a solar lighting system have saved in average between $90 MXN to $130 MXN per month.
- Users who use a solar lighting system have dedicated 2.3 hours to study, which translates into an increase of 17%.
- Environmental impact: Displaced CO2 = 63.4 tons per year.
- Health impact: 82% perceived improvement on health.
- Security: increase of 18% perceived by users of solar home systems.
Affordability: In order to assure the affordability of the technology offered to the final users Iluméxico has structured a “microloan scheme” that allows the users access to solar technology. The microloan scheme is structured as follows:
Users are presented with a variety of microloan options from which they can choose the most suitable form of payment. The users decide the number of months they want the loan for (3, 6 or 12) which determines the first down payment. According to their choice users are asked to make a monthly payment at their local Telecomm centre. Payments are registered in the system according to the user code. Users who fall behind a payment are encouraged to recover as soon as they are able to. In case they cease payment entirely a few attention visits take place and if those fail the solar home system is removed from the household.
Rural attention centres “Ilucentro”: In order to assure the sustainability and replicability of the programme Iluméxico has set in motion a strategy to decentralize the operations. Since 2013 they have opened four “Ilucentros”, rural attention centres that manage the local operations of the project.
Through Ilucentros, they are able to consolidate the presence in strategic areas, give personalized attention to the users (either social or technical) and remain close to the communities they work with, which translates into the consolidation of a solid relation between Iluméxico and rural communities.
The Ilucentros are also strategic to keep track of any technological problem that the solar home systems might present. If a user reports a problem with the system, the community engineers visit the household, inspect the systems, detect any failure or problem and proceed to fix it. This close relationship with the users and the technology allow Iluméxico to remain a “trustworthy” project in the rural context.
Iluméxico is a social enterprise that has been supported from the beginning by specific local stakeholders. Some of the supporters represent the private sector, including wide communication networks, private awards sponsored by banks, and public awards sponsored by the government. Their support was essential for the establishment of Iluméxico and has continued to be an important impulse of growth.
In order to evaluate the impact that solar energy has in highly marginalized communities in México, Iluméxico has developed a monitoring system that operates as follows:
- Implementation of entry and exit surveys that aim to gain knowledge on socio-demographic aspects of the population and also to measure the impact that having access to energy has regarding income, productivity, health, security and education.
- Entry and exit surveys are complemented by PPI specific questions from the Poverty Action Lab.
- Specific IRIS metrics are used to evaluate the impact of our community engagement programmes. These are targeted to measure how specific projects are related to having access to solar energy.
- Currently under construction is the SROI impact measure methodology, aimed to measure our impact in terms of financial investment.
The possibility to replicate Iluméxico as a sustainable project to provide access to solar energy in the rural context is central to our current growth strategy. To ensure this strategy is scalable Iluméxico has decentralized its operational model, implementing rural attention centres or "ilucentros" that execute and manage all solar lighting programs in rural communities.
This operational model is replicable in all contexts and at all levels taking for granted that there is demand for solar energy and the general conditions for its distribution and accessibility.
Iluméxico creates and distributes solar technology, which means that the model is replicable as long as the technology is available and affordable.
Manuel Weichers Banuet. Cofounder and CEO
Adolfo Prieto #1321, Col. Del Valle
Benito Juárez, C.P. 03100
Mexico D.F. México.
+52 55 55 33 35 32 ext. 103
Name:Iluméxico: Working with families to fight energy poverty in Mexico
Iluméxico is a social enterprise with a development programme for communities with high and very high marginalization.
Manuel Weichers Banuet. Cofounder and CEO
Adolfo Prieto #1321, Col. Del Valle
Benito Juárez, C.P. 03100
Mexico D.F. México.
+52 55 55 33 35 32 ext. 103
- Energy consumption
Project status:Ongoing project
- Equity investment