Sebastian Groh was well on course to become an investment banker. He was majoring in Economics and was working during his semester breaks on the trading floor in Frankfurt. Then one day in July 2008, he attended a workshop titled 'Doing Business with the Poor' at his university in Germany.
From that workshop, Sebastian learned about the success of solar power in Bangladesh. While Germany was celebrated for its Energiewende, having 2.5 million private households with roof-top solar installations, Bangladesh already had nearly six million solar home systems (SHS). The success story of the South Asian nation fascinated him. He wanted to know more.
During his study on Bangladesh's solar power success, he found out some important areas which he believed could provide a springboard for launching an innovative model for energy sharing. Five years later, Sebastian was attending the famed 'Ignite' program of the Stanford University in the US as a fellow, and pitched his idea in front of a mock jury.
They loved it, but said Sebastian needed real field experience to figure out whether his theoretical model works or not. Sebastian decided to give his idea a full go and visited Bangladesh. Thus was born SOLshare in 2013.
What is SOLshare?
"In simplest words, SOLshare allows people to share electricity," Sebastian told The Business Standard.
"We operate according to a sharing economy model. When you talk about the sharing economy, people immediately think of cars or flats, as is the case with Uber and AirBnB. It's always an underutilised resource that you make available. In our case it is the underutilised electrons that we make available to people who have too little, too interrupted, or even nothing," he said.
SOLshare gives this reliable access to energy to the people in need through peer-to-peer (P2P) solar microgrids, an energy exchange platform that empowers users to choose how and when they want to use energy.
Building upon the success of an installation base of close to six million SHSs, that generate an excess amount of energy worth USD 1 billion per year that cannot be stored, SOLshare is pioneering a micro-energy transition model in Bangladesh, Sebastian explained.
They are interconnecting SHSs with smart peer-to-peer micro-grids, and monetising (excess) solar energy along the value chain with mobile money in real time and empowering rural communities to earn a direct income from the sun.
"The point of interconnection with the P2P microgrids is SOLshare's own SOLbox, a smart bidirectional meter which allows users to buy and sell energy depending on their usage" said Sebastian.
"Often we turn passive consumers of electricity into pro-active consumers and producers at the same time - prosumers. We are betting here on a trend that is gaining momentum. Now for every kWh which is being shared, we take a cut from the users, as well as we sell our smart meters and software intelligence to manage grids to our B2B partners," Sebastian added.
The challenges of reaching out
SOLshare currently operates 36 of these grids in Bangladesh and has around 4,000 end-users who benefit from their services. By the end of 2021, the expected number of grids is 110.
A lot of SOLshare's work is by definition in very remote areas - in the chars, and with users that are particularly vulnerable and experience the adverse impacts of climate change first hand.
"Reaching these communities in itself becomes a humongous task. Under such a scenario technical mistakes are double punished and being able to do OTA (over-the-air) updates is a must. However, often internet connectivity is very weak in those areas, which have led us to innovate on this front as well," Sebastian said.
On the flipside, he said, this further strengthens their platform and opens the door to collaborate with other organisations serving those populations who require sustainable access to electricity, internet, and local storage.
Sebastian thinks the trick lies in how to optimally make use of existing resources.
"Now with increasing electrification, SHSs become increasingly underutilised, which means our potential of sharing is increasing as well. And whenever we have multiple infrastructures overlaying, we need to think hard on how to enable complementarity in a smart way," he said.
"This is where we come in. Leaving no one behind means we need to be able to provide those people, especially in the Chars that are not connected to the national grid with an equally good, ideally better, alternative," he added.
Financing for the venture
SOLshare received its first small project grant through the local GIZ office in Bangladesh. The Bangladesh government also provided its support through the Infrastructure Development Company Limited (IDCOL).
"These enabled us to build the world's first solar peer-to-peer sharing grid in Shariatpur in 2015, a huge milestone and pride for all of us," Sebastian said.
SOLshare worked together with Upokulio Biddutayan O Mohila Unnayan Samity (UBOMUS), one of the partner organizations of IDCOL, as well as the United International University—together they were awarded the UN Climate Award Momentum for Change which they jointly received during the COP22 in Marrakech in 2016.
Since then, SOLshare has been using a range of tools from the social venture financing playbook. They mixed grants and equity financing (convertible notes, SAFE notes, as well as a first priced round), international projects with the likes of UNDESA together with Grameen Shakti, UNHCR in the Rohingya camps, SBK Foundation, the ADB and the KfW/DEG, among others.
"Getting investment is incredibly difficult in any scenario for any start-up. Being a Bangladeshi start-up wasn't very helpful in this case either, as not only were you pitching your start-up, but also the country per se to the global investors," Sebastian said.
"However, this is slowly changing as a number of local start-ups have managed to get their first ticket from international investors. Now we need to be able to make the next step which is critical for scaled impact, where start-ups manage to raise consecutive rounds," he added.
Sebastian however believes that the start-up scene in Bangladesh has had a remarkable transformation in the last decade and is continuously growing with the digital ecosystem.
"Though the country has had a later start compared to let's say India, the ecosystem builders of both global and local incubators and accelerators have helped entrepreneurs like ourselves from raising funds to scaling up, but most importantly to legitimise a career as an entrepreneur or in a start-up as an aspiring career path," Sebastian said.