This article was co-authored with LGT Venture Philanthropy.
Measuring impact has been a hot topic this year in the impact investing community. Yet much of the conversation remains at theory more than practice. Indeed measuring social impact can seem daunting for investors better versed in financial models than quantifying social outcomes and, as a result, few investors as well as entrepreneurs are extracting useful data that can help manage both their social and financial performance.
With this in mind, Acumen and LGT Venture Philanthropy joined forces recently to learn more about how our co-investee, Husk Power Systems, is creating change in rural India. In Bihar, India, more than 70 percent of the population has no electricity. At night, the only illumination comes from kerosene-fueled lanterns making it impossible to see much beyond their dim glow. To bring light to Bihar, Husk is building solar mini-grids that power two lightbulbs per household and provide mobile charging for a small monthly fee.
The promise of renewable energy is immense for the communities of Bihar. Husk’s mini-grids and rice-powered biomass plants have already touched 200,000 Bihar residents, and the Acumen-LGT study will determine how their lives have changed with this access to electricity. We will learn:
- The effects of pricing on whether people sign up for Husk
- How access to solar power improves a person’s standard of living, health and education
Acumen and LGT, along with other funders, are supporting a J-PAL-led randomized control trial tracking Husk customers from 3000 households: those receiving electricity at a subsidized rate, those receiving it at a normal price, and a control group comprised of those not offered Husk at all. The initial survey took place in 2014, but we will follow with another this year to assess the effects of energy access.
Providing access to reliable, affordable energy can have a huge social impact in India and throughout the developing world. The aim of this partnership is to explore whether access to renewable energy will decrease reliance on kerosene, leading to cost savings and potential health effects from less indoor air pollution. We also want to see if energy access can promote economic development by allowing men and women to work later and improve education by giving children the opportunity to study more. By making those connections, we will gain a more complete picture of Husk’s impact—and the energy needs of the poor as a whole.
By coming together as co-investors, we can bring down costs, take coordinated action based on the study’s results, and find more effective solutions for the energy poor. With this partnership, we want to uncover insights to help Husk improve its impact, but also to inform and inspire action from other investors, foundations, and government bodies like India’s Ministry of New and Renewable Energy. Our hope is that more impact investors will fund and work together on similar projects, not only to demonstrate the sector’s impact, but also to improve our collective efforts at building lives of greater dignity for the poor.