The Dominican Republic

24. About 400,000 rural households in the Dominican Republic lack access to grid electricity. Solar home systems were recognized as an alternative to supplying rural electricity, without the need for government agencies' involvement as they were unable to meet the growing demand for electricity. Thirteen small businesses, members of an NGO, ADESOL, are currently active in solar home system sales. By 1993, these groups had sold over 2,000 solar PV systems. ADESOL promotes solar home systems and other PV applications, finances solar home system sales through a revolving credit fund, and provides technical and management training to small solar businesses and their technicians.

25. The institutional framework of the solar PV program in the Dominican Republic consists of ADESOL, local NGOs which manage credit programs for solar PV purchases, and the entrepreneurs who sell the systems. ADESOL began in 1984 as a credit fund, part of a grassroots effort by a US-based NGO, Enersol Associates. Its charter is to offer solar home systems services to households in unelectrified villages. Enersol, which had previously collaborated with Catholic Relief Service (CRS) and the US Peace Corps on solar PV projects, supported a project in the town of Bella Vista, Sosnersol efforts led to the formation of ADESOL, and a small PV equipment supply business, which is now Industrias Elricas Bella Vista (IEBV). Enersol also promoted the concept of a local credit fund and solar home system supply business to others interested in PV. These efforts led to a solar PV project within the Development Association of San Jose de Ocoa (ADESJO). ADESOL and Enersol were effective in training small entrepreneurs and their technicians. The ongoing association between ADESOL and Enersol for technical assistance is strengthened by Enersol's ability to tap into grants targeted to US organizations.

26. The businesses in the ADESOL network employ 32 people and their resources vary considerably. Some operate in towns, with access to transportation and communication, while others are based in the villages in which they install the systems. IEBV imports all of its panels and purchases the remaining system components locally. Many of the smaller businesses purchase their panels from IEBV, although one company, Solar Luz Cibao, imports some of its own panels.

27. ADESOL board members, consisting of technicians and entrepreneurs, and its general membership, consisting of solar home system technicians, hold a one-day meeting each month to strengthen the solar technician network and perform follow-up training. ADESOL has only two permanent employees. They work with a group of about 10 Dominican and international trainers who conduct the training courses. Trainees who become active in the solar PV business join ADESOL and become part of its technician network. The fact that ADESOL has trained some 40 technicians since 1986 has been instrumental in disseminating PV technology within the country.

28. Currently, four NGOs are providing credit for solar PV purchases: ADESOL, ADEPE, SSID, and ADESJO. ADEPE, which began offering credit for solar home systems in 1991, combines an extensive rural promoter network with a well-established financial capability. SSID, a church-based community service organization, began financing solar home systems in 1992. ADESJO began making loans for solar home systems in 1985. These NGOs receive the initial funding from donor organizations, including Enersol, Peace Corps Partnership, UN 1% Fund, W. Alton Jones Foundation, the Dutch Embassy, and CRS. The NGOs then provide loans directly to consumers to purchase systems from local entrepreneurs.

29. In the Dominican Republic, NGOs with strong financial support tend to have an urban bias, while the most effective rural developers often lack the financial backing. Only ADEPE has the necessary financing and human resources to handle an expanded program. Businesses involved in the solar PV market face obstacles to expanding their operations, largely due to a lack of training, limited contacts that the rest of the educated business community enjoys, inadequate working capital, limited resources for promotion and advertising, and a lack of physical resources, such as vehicles, communication, warehouses, and workshops. The small businesses generally have not competed with each other for business because their regional markets do not overlap. This is changing in at least one region, where the ADEPE community now has two small entrepreneurs in the ADESOL network.

30. The PV module size of a typical solar home system ranges from 25 to 48 Wp. A solar home system consists of a PV module, one lead-acid automotive battery, a battery charge indicator/load center with a PV module disconnect switch, a fuse and light fixtures. A typical system powers one fluorescent lamp, four 15-W incandescent bulbs, a 14-W black-and-white television, and a small radio/cassette player. The average installed price of a 48-Wp system is about US $700. Many of the systems and installations were adequate for medium-term usage, although some systems did experience technical problems. These problems dealt with improper support structures for modules, missing battery boxes and voltage regulators, overloaded wiring, and owner misuse (bypassing the battery controller to direct-connect appliances to the battery). The PV modules were reliable except for those using thin-film silicon modules. The manufacturers honored warranties in all cases of failure. Users were generally well-informed about load management and technicians were trained in both installation and troubleshooting.

31. The systems are purchased and owned by the user. Monthly installments are about US$30, compared to about US$36 in households using kerosene and batteries. Prices of solar home systems have increased substantially in local terms, largely due to the devaluation of the peso. Customs charges, exchange-rate surcharges, and domestic industrial protection have also adversely affected the solar PV business. SOLUZ, a US firm, has recently been collaborating with IEBV to lease solar home systems, making the systems available to a larger percentage of the rural population. Since 1994, these efforts have resulted in over 100 systems being leased, with service fees sufficient to allow full cost recovery and be commercially profitable.

32. Access to credit is still a major constraint for solar home system sales. This lack of credit, coupled with solar home system promoters targeting the relatively affluent households, result in about 80% of the sales by cash. Commercial banks do not usually offer credit for solar home systems, which they view as consumer durable goods. NGOs offer loans through a revolving credit fund, which typically require a 25% down payment, 18% interest rate, and a 1-2 year payback period. The revolving credit funds are proving effective, but limited, largely due to the dependency on donations for initial funds.