SELCO : Harnessing

Sunlight to Create

Livelihood

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By:
Abhinav Sharma 33061
Daphne Albuquerque 33072
Kriti Kaushal 33081
Mridul Kumar Dhaniwala 33089
Sunakshi Agarwal 33113
Sushant Bhatia 33115

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 Case Summary

• SELCO is a for profit social enterprise which has been providing sustainable energy solutions to the poor
and underserved regions of India for the past 15 years

• It has managed to maintain strong linkages between its end users, energy services, technology and
financing as each one is interdependent on the other.

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 Situation Analysis

• SELCO has reached a stage in the business where they want to spread their objective of bringing solar
energy solutions to other parts of the country. At the same time, there is a change in the top management
of

the company, and SELCO is looking for ways to replicate their business
model.

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 External Environment-
PESTEL Analysis

• Political: JNNSM was launched by GoI which favoured large centralized production- SMEs were unable to
influence policy makers

• Economic: Subsidies available in Foreign markets because of which big suppliers divert to such markets.

Financing method- Customers find it difficult to get loans through existing c1/h20a/1n3 nels.
 Industry Analysis

• Relatively untapped industry

• Alternative energy interventions, only by the government

• Very few small and medium enterprises

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 Competitors

• Providing cheap and dubious quality products

• Competitors don’t have financial model like SELCO’s.

• Customers forced to make trade off between cost and quality, given their economic status

• LPG, Kerosene, Firewood, which don’t involve one time investment (even
1/2 0 /1 3
t h o ugh more expensive in long run)
 Internal Analysis

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 Objectives

• Long Term: Sustainable business.

Create opportunities for lower income groups of society to access alternate energy sources.

• Middle Term: Rural electrification on a large scale(2 Lakhs rural households in 4 years)

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 CRITERIA

• Identifying new leadership and ideas

• Social objective

• Financial viability

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 Alternatives

• Expand SELCO geographically

• Diversify products to address other energy related needs

• Create a franchise model

• Invest and incubate the potential entrepreneurs to replicate SELCO’s business model.

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 Evaluation of Alternatives

• Expand SELCO geographically

- New employment will be provided but potential leaders won’t be identified

-Social objective will get compromised.

-More financial burden on SELCO as innovative financing will become difficult for customers.

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 Diversify products to

address other energy related needs

• Increase in cost due to R&D

• Leadership problem not addressed

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 Create a Franchise model

- Bitter past experience in AP

-Target pressure on franchise to increase sales, making objective purely commercial

-Effective leadership not identified

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• Invest and incubate the potential entrepreneurs to replicate SELCO’s business model

– New leadership identified

– Social values transferred, Social objective not compromised

– Model can be replicated

– Context based ideas generated

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 Best Alternative

• Invest and incubate the potential entrepreneurs to replicate SELCO’s business model

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 Implementation

• Identify potential entrepreneurs in Karnataka and other parts of the country, already working or
interested in energy sector

• Provide training, Share knowledge

and align them to the social objective of SELCO

• They will then develop context based ideas in their areas

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• SELCO will continue to support and