photo by Barefoot Photographers of Tilonia
The idea of providing loans specifically to install solar energy systems is one I find very enticing—especially in parts of the world where the cost of the panels (or lights as the case may be) is even more prohibitive than it is in the United States. When you’ve got a yearly income of $2000, spending $300 on solar lighting, really isn’t feasible without some sort of assistance. Enter the UNEP Solar Loan Programme.
Renewable Energy World has a good story about how the program is working to provide affordable loans to low income people so that they can access cleaner energy to replace kerosene. Here are some choice quotes:
Solar Lights Save Lives
Vinoj Kanaya, a silkworm farmer, wanted an alternative to burning wood, dung or kerosene and found the brighter lights did more than illuminate the night:
After he installed two solar-powered lights with the help of a solar loan, Kanaya says attacks by deadly cobras have gone down because the snakes are scared off by the brighter solar light. The lights are much cheaper to run than those powered by kerosene and there are fewer accidents and burns with solar lights. Kanaya says that both his helpers and his silkworms work much better without the smoke and fumes of kerosene lamps.
UNEP Works With Banks to Reduce Interest Rates
UNEP's Indian Solar Loan Program worked to overcome the natural suspicion of bankers towards new technology by "holding their hands" as they evolved new lending products, offering incentives and guarantees that are gradually withdrawn as the loan market matures.
In the case of the Indian Solar Loan Program, UNEP "bought down" the interest rate charged by the banks from about 12% to 5%. In essence, the banks continued to make their normal rate of return for a perceived higher risk loan, while the customer paid the lower, more affordable rate. This "interest rate subsidy" was gradually withdrawn over the three-year program.
Access to Finance Grows Solar Market
The UNEP Program has helped change the Indian solar market from a small, cash-only business in 2003, to a growing market with more than 50% of sales financed by more than 20 banks through their networks of more than 2000 branches. UNEP has used the success of the Indian Solar Loan Program to expand such finance programs into Morocco, Tunisia and soon Algeria, Indonesia, Mexico and Chile.
Read the entire article :: Indian Solar Loan Program Offers Access to Light
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