Renewable Energy (Solar Power) Impact Study

Contents

Page No.

  • Renewable energy in Pakistan
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  • SVDP – An overview
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  • SVDP is different & unique because;
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  • Renewable Energy & Soon Valley Development Program
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  • Solar energy Product and Its Features
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  • Product Facts & Figures
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  • Why to do Impact study
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  • Abstract / Variables to be Measure
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  • Sample Size for Impact Study
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  • Mode of Research
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  • Findings and results
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Renewable energy in Pakistan

Energy is considered to be life line of any economy and most vital instrument of socioeconomic development of a country. Pakistan’s energy infrastructure is not well developed, rather it is considered to be underdeveloped and poorly managed. Currently the country is facing severe energy crisis. Despite of strong economic growth and rising energy demand during past decade, no serious efforts have been made to install new capacity of generation. Pakistan needs around 15,000 to 20000 MW electricity per day, however, currently it is able to produce about 11,500 MW per day hence there is a shortfall of about 4000 to 9000 MW per day.Pakistani’s as a nation are facing energy poverty and while residing in this country one cannot claim that he/she has not suffered from it. One reason for this energy poverty is our working on single paradigm of tackling it. Our government and development agencies only worked on hydral power generation sector and had not even think of working on renewable energy means. Although hydral energy is the cheapest form of energy but it require well before time judgments and decision making along with heavy financial investments. Renewable energy in Pakistan is a relatively underdeveloped sector; however, in recent years, there has been some interest by environmentalist groups and from the authorities to explore renewable energy resources for energy production, in light of the energy crises and power shortages affecting the country.

Solar Power: There have been some efforts to install and expand the use of solar energy in Pakistan. The average amount of daily sunlight in Pakistan is nine and a half hours [citation needed]; there are a few cloudy days even in the wettest regions. Eight power generation plants have been installed and eleven are in various stages of completion. Further feasibility studies are undergoing. In December 1981, the first solarphotovoltaicsystem was commissioned, located inMumniala(a village 60km fromIslamabad).

SVDP – An over view

SVDP a non Governmental/ not for profit organization working in agro based rural economies of district Khushab and Chakwal with the prime objective to reduce poverty through optimum use of available natural resources in significant and sustainable manner.Soon Valley Development Program (SVDP) is a non-profit, non-governmental organization was established on 14th. August 1996 and is registered as a Company at SECP under section 42 of companies act. Its Head Office is in Naushera, Soon Valley District of Khushab-Punjab-Pakistan.

Agreement between OPP-OCT and SVDP for provision of Credit line signed during 1996 which lasts till 2005. Partnership with PPAF started in 2002. First agreement on Microfinance Program between PPAF and SVDP started from 01 August 2005. Presently Phase VIII of Microfinance Program is going on. SVDP is currently operating with 04 branches. 03 branches are at district Khushab and 01 is at district Chakwal.

SVDP isdifferent & unique because;

  1. Cropping pattern change and its marvelous results: Through our DMPP interventions, our continuous hard work and support from PPAF, we are able to change the cropping pattern in the whole soon valley. The paradigm of the people has been shifted to potato from cauliflower. That has brought a great revolution in the area and is a unique model in itself in Pakistan. It has boosted the local economy by at least Rs. 300M TO 400M annually.
  2. Pioneer in extending Micro finance in Renewable energy sector: our partner PPAF (Pakistan poverty alleviation fund) in the year 2011 made a pilot project with us in which we were asked to extend micro finance for solar and alternate energy solutions. We completed this intervention quiet successfully and have set a role model for the development sector in Pakistan. Till date we have extended solar and other renewable energy loans to more than 1700 families and their direct beneficiaries are more than 12000 human beings.
  3. Pioneers in Micro Insurance Sector: SVDP was amongst the 02 organization in Pakistan who successfully implemented the project of micro insurance and is replicating it. We are the first in Pakistan who built in micro insurance of live stock in our live stock loan product. This is also for the first time that this insurance coverage is not on conventional grounds but this product is developed under the supervision and guidance of live stock and insurance experts of Pakistan. In it, the concept of value addition in the purchase price of animal has been introduced and in case of death of insured animals, claims are settled as per the value addition per living day of the animal. We are successfully implementing this model for last 04 years.

RENEWABLE/SOLAR ENERGY & Soon Valley Development Program

In the year 2009, Pakistan poverty alleviation fund (the major donor organization of SVDP) granted SVDP an amount of Rs. 1.000M for installation of home based solar systems on grant basis in the off grid/ UN electrified 02 villages of Soon Valley District Khushab. The intervention went well which bring awareness regarding solar energy amongst the communities of off grid areas.

Soon after the success of this grant based intervention, Pakistan Poverty Alleviation Fund (PPAF) for the first time in Pakistan did a pilot with SVDP in which Micro finance was extended to the communities for installation of home based solar systems. Most of these installations were targeted in the un electrified/off grid areas of Soon Valley. The efforts of both the partners went well and produced wonderful results by bringing awareness and ownership in the communities by enabling them to tackle their energy poverty in a very sustainable way. This also provides a model for the Micro finance practitioners in Pakistan to replicate.

Till date Soon Valley development program (SVDP) has provided micro finance to more than 1700 families with direct beneficiaries of more than 13000. More than 90% of these loans has been extended to the off grid/unelectrified area’s/communities, where there is no chance of electrification for coming years. The repayment rate of these loans is more than 98% with 100% loan utilization ratio.

Besides this, in Renewable energy sector, SVDP is also extending its micro finance services for solar energy tube well and bio gas plants (both residential and commercial).

Solar energyProduct and Its Features

As discussed earlier solar energy product is very unique and is flexible with following features;

  1. Facilitation of customer need based assessment and then delivery of product usage/knowledge to the client from technical/experienced resource. This process is completed and insured at the time of loan application approval.
  2. Area based product designing with cash flow based repayment modes.
  3. Repayments ranging from monthly to yearly depending upon the clients income inflows and repayment capacities. Total loan period is also ranging from 6 months to 18 months.
  4. Family based lending model in which inclusion of female is highly encouraged. This brings ownership and empowerment amongst females in the local areas (especially these off grid areas females).
  5. Facilitation services in case of query/problem after the utilization of loan.

Product Facts & Figures

Being pioneer of this sector in Pakistan, SVDP’s management along with support and guidance from PPAF has put their special emphasis on solar and renewable energy products. Since our start in 2011 till date, we have extended loans to more than 1700 families in off grid areas of district Khushab. Our main focus and targeted areas are Noor pur thal (the THAL desert) and far flung areas of Soon valley and Katha saghral. Most of these villages/dera Jaats are inaccessible and are beyond normal human reach. Some loans are also provided in the already electrified areas to tackle down the load shedding problem. The details of Micro finance loans under this product are as under;

Sr. # / Phase / Branch / No. of Client / No. of Household / Amount Disburse
(in millions)
Male / Female / Total
1. / MIOP
2012
(6 month) / 261 / 112 / 373 / 373 / 7.500M
1. / V
2011-12 (2 years) / Naushera / 121 / 15 / 136 / 136 / 4.255M
2. / Katha / 4 / 0 / 4 / 4 / 0.140M
3. / Noorpur Thal / 145 / 125 / 270 / 270 / 3.845M
1. / VI
2013
(1 year) / Naushera / 128 / 25 / 153 / 153 / 4.770M
2. / Katha / 14 / 8 / 22 / 22 / 0.620M
3. / Noorpur Thal / 395 / 290 / 685 / 685 / 12.475M
1. / VII
2014
(1 year) / Naushera / 48 / 7 / 55 / 55 / 1.625M
2. / Katha / 0 / 0 / 0 / 0 / 0
3. / Noorpur Thal / 7 / 11 / 18 / 0.375M
1. / MCB
2014
(1 year) / Noorpur Thal / 14 / 7 / 21 / 21 / 0.385M
TOTAL / 1137 / 600 / 1737 / 1737 / 35.990M

Why to do Impact study

Following are the reasons for this study;

  1. SVDP being pioneer in this product in Pakistan requires detail revision and in depth analysis. Is it beneficial for our communities/clients or not. To what extent it is beneficial and in which manner it is befitting the life of our communities.
  2. It allows us to further enhance and replicate this model.
  3. It provides rationale to us that why it is important to continue with such product and how much scope is available to us.
  4. It also provides us the chance to understand this product/our shortcomings. The grievances and issues of the community and their direct understanding to the senior management of SVDP. It provides us the chance for the betterment of this product.
  5. It will serve as a model study for future implications of this product and enhances the chance of betterment in our other products and services.
  6. It has provided us a chance to revisit those clients and communities whose loans has been closed with us. It provides us the understanding about the sustainability and ownership status of the solar systems.

Abstract / Variables to be Measure

In every research based study, one should define the measurable/variables to draw results and conclusions. In this study we try to cover following variables related to the economic and social benefits to our clients;

  1. From where did you heard about solar system?
  2. Before solar system installation, monthly expenses on fuel or lighting.
  3. After solar installation, how much new rooms have been lightened.
  4. After system installation, benefits earned by the client. It includes both social and economic benefits like educational, health, time and financial benefits.
  5. No of beneficiaries other than your family.
  6. How much people got motivated from the client and installed renewable energy systems.
  7. Utilization of additional time got from solar lighting.
  8. Additional benefits if any to females and children of the family.

Presently SVDP is working with 04 branches and loan of this product has been extended in every branch. However most of the disbursements as described above has been made in the off grid areas of district Khushab. SVDP has its branch at Noor Pur thal in the great Thal Desert, the third largest desert of Pakistan. In Thal desert the poverty level is very high and some major villages and localities are still off grid and un electrified. There are also many small localities known as dera jaats and some small villages at Soon Valley where there is no electricity.

Sample Size for Impact Study

The total population and sample size of impact study is as under:-

  • Total population, amount disbursed under this intervention for solar loans is Rs.35.990M
  • Total population, clients 1737 (1737 families) where these loans are disbursed.
  • Sample selected clients, 50 families
  • Amount disbursed to the selected Sample selected Rs. 1.205M
  • All the clients are picked from off grid areas of Tehsil Khushab and Tehsil Noor pur thal.

As already discussed that SVDP is using family based approach in this product for lending so 50 family heads are approached for this research study.

Mode of Research

Mr. Tahir Bashir, SVDP’s monitoring and evaluation officer has been deputed and trained for the task. In person detailed interview on individual basis of at least half an hour has been conducted with each family head on the subject matter. Before starting the interview the client has been informed about what we are doing, why we are doing and why he/his family are selected for the purpose. The interviewer tried his level best to first get the trust and confidence of the interviewee and then started asking questions. All the information has been extracted from him as per already designed format/questionnaire. He has also been provided an opportunity to communicate and share his personnel experiences and grievances if any with us. In last the interviewer completes the questionnaire by getting the contact details of the family head and his signatures there on. Following are the questions asked in the interview/survey form;

  • Source of earning and monthly income?
  • Before this loan from SVDP, what was your source of lighting
  • How much were the monthly spending on previous source of lighting?
  • Before this loan from SVDP, any knowledge about the Renewable energy?
  • How much expense on installation of solar system, how much time to install the solar system?
  • What are the benefits from this system?
  • A) Financial benefits.
  • B) Benefit to women
  • C) Benefit to children
  • D) Health benefits
  • E) Time benefits
  • After installation of solar energy how many new rooms are lighted

Findings and results

Amount of Loan / No. of Families / Total family members / Total Disbursement / Per family average Monthly Income / Source of lighting before SVDP intervention / Average Monthly spending on light previously / Monthly spending on light now / No. of rooms enlighten previously / No. of rooms enlighten now
15,000 / 8 / 43 / 120,000 / 20200 / Kerosene oil and woods / Rs. 1645 / Nil / 2 / 4
20,000 / 14 / 87 / 280,000 / 21114 / Kerosene oil and wood / Rs. 1907 / Nil / 2 / 4
25000 / 14 / 109 / 350,000 / 21857 / Kerosene oil / Rs. 2200 / Nil / 2 / 5
30000 / 11 / 121 / 330,000 / 30181 / Kerosene oil and china rechargeable light / Rs. 2800 / Nil / 4 / 6
40,000 and above / 3 / 20 / 125000 / 33666 / Kerosene Oil and china light / Rs. 2833 / Nil / 3 / 6
1,205,000 / 23,804 per family average monthly income / Kerosene Oil / Rs. 2,277 Average per month / --- / 2.6 rooms on average / 5 rooms on average
Total / 50 families / 380 total members—Average 8 members per family

Beside above findings following are the benefits to the clients after using Renewable Energy Solar Loan

  1. Financial Benefits: from our survey with 50 families, we found that on average atleast each family is saving Rs. 2277 per month from our intervention. SVDP has disbursed Rs. 35.990M to 1737 families. It means that these families are enjoying around Rs. 3.870M per month saving from SVDP renewable energy intervention. Per year average savings should be around 46.440M. So the investment made once is being returned before the completion of 01 year period.
  2. Benefit to women: during our interviews for this survery with the communities, our special emphases was on family based benefits to the household and we tried to understand the in debth issues of females and their easining in life if any after this intervention. Following are the benefits of this intervention to the female members of the community;

a)Enhancement in working time (which they claim that our days are prolonged now) which has reduced pressures on nerves to complete the task with in day time.

b)Solar lighting has provides flexiblity in time and work and some work that previously remained un accomplished during day time is now accomplished at evening hours.

c)Side by side activities like embroidery, stitching, sewing can also be started in the night time now.

d)Positive impact on the eye side during night hours cooking and house works.

e)In some families where television/Radio has been bought after solar system installation, the females are now connected to the outer world. Previously these residents and especially females were totally unaware of the outer world dimensions and advancements.

  1. Benefit to children;

a)Educational benefits and now children can read and write in the night time due to availability of light.

b)Flexibility in night time studies has allowed them to enjoy their day time in recreational activities.

c)Positive impact on eye sight during studies at night time.

d)General knowledge and society knowledge upgrades through TV/Radio availability.

e)Solar lighting has prevented small children and infants from kerosine oil burning flame smoke because they mostly remain with the arm of their mother and these kerosine burners were also placed near women where she is cooking or doing house work.

  1. Health benefits

a)Flexiblity in time and working hours has lowered pressure on the nerves of women.

b)Eye sight benefits

c)Smoke and burning free environment.

d)Positive impact on the eyes and lungs of infants as described above.

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