The iShack Project is using solar electricity to demonstrate how green technologies can be used appropriately to incrementally upgrade informal settlements and slums and at the same time build local enterprising capacity and resilience within the community.
The Sustainability Institute Innovation Lab (SIIL)
The Sustainability Institute Innovation Lab (Pty) Ltd, (SIIL) is a division of the Sustainability Institute. SIIL has developed a social enterprise model to deliver smart, sustainable utilities to poor communities in the global south.
Introducing the iShack Project
The iShack Project is using solar electricity to demonstrate how ‘green’ technologies can be used appropriately to incrementally upgrade informal settlements and slums and at the same time build local enterprising capacity and resilience within the community. This enterprise development model recognises the significant existing social, human and physical capital in these communities which can leveraged for sustainable development.
Our vision goes far beyond simply providing clean, safe and affordable energy. Other technologies and services that could be incorporated into the model include off-grid sanitation, ecological housing, water services and food production.
A Sustainable, Scalable, Solar Electricity Social Enterprise
SIIL’s flagship project is the iShack Project, a large-scale energy utility that provides a pay-for-use solar electricity service to residents of an informal settlement called Enkanini in Stellenbosch, South Africa.
The off-grid utility provides household electricity to power lights, television and other small media appliances. The energy capacity of the service is somewhat higher than what is typically deployed in rural off-grid electricity projects elsewhere in the world.
Fundamental to the technology design is the modular scalability of the household installation so that the electricity supply can grow incrementally as the technology evolves and as costs come down. For example, The iShack Project has started to pilot solar fridge upgrades and is developing a financial model to make such upgrades affordable and accessible.
Enkanini is an informal settlement of about 6,000 people on the outskirts of Stellenbosch, in South Africa’s Western Cape province. This community is typical of many similar settlements around South Africa: Hundreds of shacks are built in close proximity, with little or no access to clean and safe forms of energy, water or sanitation.
Here, as elsewhere in the global south, authorities are struggling to cope with the challenge of providing basic services to far more people than they have the resources to cater for.
The business model
SIIL received funding for infrastructure and start-up capital from the Green Fund and the Bill & Melinda Gates Foundation, and has also received generous donations from private individuals and groups. However the business model is designed to ensure that the energy service is financially sustainable without having to draw on ongoing grants and donations. Thus the long term running costs are paid for largely by the end-users, subsidised by the local municipality (via a Free Basic Electricity subsidy). The iShack ‘social’ business does not extract profits.
Demonstrating the model at scale
The iShack Solar roll-out started in October 2013 and by April 2015 the electricity service had been delivered to over 800 households. We aim to provide the service to over 1500 clients. Local residents from the community are trained as iShack Agents to market, install and maintain the Solar Home Systems. Sophisticated operational systems, adapted to the local context, have been developed, and are continually refined to ensure that the service runs efficiently and that the end-user experience is very satisfactory.
SIIL will support the replication of the iShack model elsewhere in the global south by working with funders and local implementing partners (local government, NGOs, or private social-impact companies) to design, plan and implement off-grid utilities such as the iShack Project.
Upgrading Informal Settlements – closing the (waiting) gap
The iShack Project was established as a social enterprise following a number of years of applied research by students and academics at the Sustainability Institute and Stellenbosch University. The academic question that was considered during the research phase was:
While communities, living in informal settlements are waiting (often many years) for state-lead delivery of formal services (electricity, water, sanitation, roads, and housing), what can be done in the meantime to initiate a process of incremental upgrading, that does not rely on capital intensive, conventional infrastructures, and which takes advantage of affordable, renewable, appropriate and environmentally friendly technologies?
This question was approached using transdisciplinary research techniques including a process of relationship building and ‘co-production’ between the academic researchers and residents of an informal settlement in Stellenbosch called Enkanini.
An alternative, incremental response to energy poverty?
Part of the research work focussed on energy poverty, and this lead to the concept of the ‘iShack’: an improved shack comprising a range of dwelling upgrades, using ecologically sound concepts, technologies and materials such as solar electricity, recycled materials, and passive house design - all aimed at improving the holistic energy utility of the shack. Practically this translated to a shack, still built conventionally with corrugated iron and wood, but with improved insulation and ventilation, better thermal comfort levels and access to clean, solar electricity).
- The iShack demo house contested the notion of a clear distinction between formal and informal housing. The technical iShack concept was thus a practical demonstration that people living in shacks can conceivably start to incrementally improve their homes while they wait for the state to deliver formal services.
- The iShack Project is now demonstrating, at scale, a viable enterprise model for delivering a subsidised pay-for-use off-grid electricity service while simultaneously fostering other economic multipliers for the community through local skills development and job creation.
Achievements so far
- Over 800 shacks electrified by April 2015, meaning approximately 2500 citizens are accessing clean, safe electricity in their homes for the first time
- The project has created 7 local jobs for residents of the community and trained at least 14 residents on a range of skills including solar electricity installations, maintenance, marketing, and administrative systems for least 14 residents
- SIIL has secured a municipal tender which will enable the project to claim a Free Basic Electricity (FBE) subsidy on behalf of each of its clients in Enkanini. This subsidy goes towards the ongoing maintenance costs of the systems, and helps to keep the client fees as low as possible. This innovative use of the FBE subsidy to support an off grid service, delivered by a private enterprise, is a first in the country.
- On target and in budget...so far
Learnings so far
- Poor communities are prepared to pay for the services that they need and value. Renewable technologies such as solar electricity remain relatively expensive, so some form of subsidisation is necessary and fair.
- With the active support from and in partnership with funders and/or national and local government, a fairly priced, commercially branded service offering can be an effective means of supporting sustainable, basic service delivery to indigent citizens.
- Detailed quality management systems and procedures that are consistently implemented and continually monitored are critical to the resilient and efficient functioning of a large off-grid electricity utility.
- Having a very local operational base in the community and using as much local talent and skills as possible in the delivery of the service (made possible through comprehensive training and support), is an effective way of establishing buy-in, and developing a resilient, viable business operation of this nature.
- Community involvement in decision making and ‘ownership’ should be appropriately matched to the particular needs of the enterprise and the end-users.
- Running an off-grid solar electricity utility is a challenge that requires continual innovation and review – especially when ethical and equitable business practices are a #1 priority.
Scaling - deeper and wider
SIIL will continue working in Enkanini to build on the work that we have done around alternative models and technologies for sustainable service delivery. Our next ‘demonstration’ of incremental energy services is a fridge-upgrade offering which will shortly be launched in Enkanini.
However we realise that much of what we have developed and learnt is applicable to other poorly serviced communities around the world. SIIL has developed detailed operational to run the iShack enterprise effectively and efficiently systems (procedures, plans, policies financial models, record-keeping systems and databases and monitoring indicators). Our aim is to work with like-minded partners to share our learnings and training programmes to replicate the energy utility elsewhere in the global south. We invite potential partners, including funders and local government to make contact – or better still, visit us to see our work.