Cover Image
close this bookPhotovoltaic Household Electrification Programs - Best Practices (WB)
close this folderInstitutional models
View the document(introduction...)
View the documentEnergy service company (ESCO)
View the documentLeasing arrangements
View the documentConsumer financing
View the documentCash sales
View the documentThe role of governments and donor agencies
View the documentRole of the world bank and other donors

(introduction...)

5.1 This Chapter examines institutional structures for implementing household PV programs and discusses the roles governments and donor agencies can play in supporting such programs. PV systems programs have been implemented with various institutional arrangements. These range from electric utilities or rural electric cooperatives to private sector leasing and direct sale programs. No single institutional design is applicable in all countries; rather, successful programs are based on local conditions, capabilities, and consumer needs. The experiences of Indonesia, Sri Lanka, and the Philippines demonstrate that effective and sustainable programs have made use of existing institutions, rather than new organizational structures. While this approach avoids the problems of creating and staffing new institutions, the capabilities of existing institutions may have to be strengthened through staff training and, occasionally, through expansion. Also, existing institutions may require specific incentives to accept additional responsibilities. When it is not possible to utilize existing organization, new dedicated solar electrification organizations can be established. In the Pacific Islands, the Tuvalu Solar Electric Cooperative Society was set up after several attempts to use the local utility failed.

5.2 This following section discusses four models for household PV programs: energy service companies (ESCOs), leasing or installment arrangements, consumer financing through dealers and commercial banks, and cash sales. It also discusses ownership arrangements, financing mechanisms, and the flows of products, services, and money. The institutional models described apply to newly created solar electrification organizations as well as existing institutions.

Table 5-1. PV Program Structures

Structure

Ownership

Financing

Product flows

Service flows

Money flows

Examples

ESCO

Module and

Provided by

Bulk purchase of

Provided by ESCO as

Monthly consumer

Utility: Idaho Power Company (USA)


controller

ESCO through

systems or components;

part of ESCO

payments to ESCO; ESCO



owned by

service

installation by ESCO or

agreement

pays equipment suppliers,

Coop: Rural Electricity Coops (Philippines),


company;

agreement

by supplier under


service and admin. staff,

Tuvalu Solar Electric Cooperative


other


contract to ESCO


and bank loans

Society (Pacific Islands)


components







may be owned





Private: SOLUZ, Inc. (Dominican Republic)


by customer or







company






Leasing

Module and

Provided from

Bulk purchase of

Provided by

Monthly consumer

NGO: Gansu Solar Electric Light Fund


controller

intermediary

systems or components;

intermediary or

payments to intermediary.

(China)


owned by

through lease

installation by

private vendor under

Intermediary pays



intermediary;

agreement

intermediary or supplier

contract to

equipment suppliers,

NGO-led. Coop-run: Solanka Sun Society,


other


under contract to

intermediary; may be

admin. staff, and bank

Sarvodaya (Sri Lanka), Enersol


components


intermediary

included as part of

loans. Service technicians

(Dominican Republic)


usually owned



leasing agreement

may be paid by consumer



by customer




or intermediary.

Govt-led. Coop-run: BANPRES (Indonesia)

Consumer

All

Provided from

Individual purchase of

Provided by private

Proceeds of loan used for

Dealers: ADESOL, ADEPE, ADESJO,

Financing

components

commercial

system; installation by

vendor, generally on

lump-sum consumer

SSID (Dominican Republic); Pt.


owned by

bank, coop, or

private sector or NGO

a fee-for-service

payment for equipment.

Sudimara, Pt. Kyocindo; (Indonesia);


customer;

vendor


basis, through service

Monthly consumer loan

Solar Power & Light Company (Sri


module can be



contracts

repayment. Servicing paid

Lanka), Electricidad del Sol, Industrias


used as loan




by consumer at time of

Electricas (Dominican Republic)


collateral,




service.



although other





Banks: Bank of Ceylon, Hatton Bank (Sri


loan security





Lanka)


may be







needed.






Cash

All

Not applicable

Individual purchase of

Provided by private

Lump-sum payment to

Dealers: Pt. Sudimara, Pt. Kyocindo

Sales

components


system, installation by

vendor, generally on

vendor. Servicing paid by

(Indonesia); Solar Power&c Light


owned by


private sector or

a fee-for-service

consumer at time of

Company (Sri Lanka), Electricidad del


customer


consumer

basis, through service

service.

Sol, Industrias Electricas (Dominican





contracts


Republic); all companies in Kenya