Last month, we launched the Acumen Energy Impact Report, a comprehensive look at the impact of our 10 years of investing in off-grid energy. If you had asked us about our impact a few years ago, we would’ve told you how many customers our companies were reaching and shared anecdotes about their lives. However, as an investor that stands with the poor, this wasn’t good enough.
We wanted to talk to customers directly and understand if and how our companies are having a meaningful impact on their lives. That’s why we created Lean Data, our customer-centric, technology-based approach to impact measurement and spent the last year using this method to talk to more than 5,500 of our energy customers who are using the improved cookstoves, solar home systems and other products that our companies are making available across the developing world.
We are excited to share what we learned in this report, from customer income levels and their spending behavior to how their quality of life has changed since accessing clean energy. The detailed, customer data within this report is a first for us and, we believe, for impact investing and off-grid energy as a whole.
By the Numbers
Our impact work is built first and foremost on three core areas: Breadth, or how many people a company reaches; Poverty Focus, or how many low-income customers a company serves, as measured by World Bank international poverty lines; and Depth of Impact, or the difference a company’s product or service makes in the lives of its customers.
While we are proud of the number of low-income people our energy portfolio is reaching with improved lighting, power and cooking solutions, we know we can do better at reaching the poorest—those living on less than $3.10 a day. Today, 35 percent of our energy customers live below that amount, and our goal is to reach 50 percent over the next 10 years. Our plan is to work with our companies to improve affordability and consumer financing and explore the role of tools like smart subsidies.
Looking Deeper at Our Impact
We can’t serve people living in poverty if we don’t know what they want, which is why the bulk of our Lean Data work focuses on what low-income customers value most. Overall, 49 million of our portfolio’s customers shared that their quality of life has improved significantly as a result of access to their new products and services. And 58 million have access to modern energy for the first time. They were either using dangerous kerosene lamps or smoky traditional cookstoves before owning a product or service from one of our companies.
There were small gender differences in some of the responses, especially in how men and women talk about safety. Men refer to improvements in the security of the home while women talk about safety in terms of family, health and accidents. This presents some interesting insights in designing and marketing a product or service.
Spending
We saw a lot of variability when it came to customer spending across our companies. Overall, our customers save an average of $43 in their first year of owning a product or using a service provided by our portfolio companies, but not all households save money immediately when they switch to solar. Much of this comes down to whether households stop spending on kerosene and other fuel sources and, more importantly, the total cost of the energy product or service they purchased.
For instance, spending on an inexpensive solar lantern is recouped the most quickly while, on average, households that purchase solar home systems end up increasing their spending on energy during the first year (and sometimes beyond, depending on credit terms) as they are paying off the system. What’s important though is that most of these customers are paying for a higher level of energy, so we’re not comparing the same kind of access.
Usage & Behavior
We are very interested in how customers are using their products and services to understand the impact of energy access in their day-to-day lives and work with our companies to improve how they serve their customers.
- 1 hour of extra study time is gained at night for solar-lit households, contributing to more opportunities for children to participate at school.
- 7 minutes are saved on average when cooking the main meal each day.
- 1/3 of cookstove customers have stopped using traditional stoves, which is an important step toward realizing other benefits of improved cookstoves.
Customer Experience, Feedback & Satisfaction
We also looked at areas of impact related to customer experience, feedback, and satisfaction. With this data, companies can create the most impactful products and services and ensure they market the most valuable features.
56 million people believe that the benefits of the product or service are more valuable than the price that they paid.
21 million people experienced challenges using their new products or services. If customers cannot use their product to best effect they won’t experience the maximum benefits — and they probably won’t be very happy either, so this is an area we are working to fix with our companies.
Environmental Impact
Lastly, as an off-grid energy investor seeking to displace the use of dirty and dangerous fuels such as kerosene, we look at our environmental impact through the carbon dioxide and black carbon emissions our companies have helped avert.
Why All of This is Exciting
What’s most exciting about now having all of this information on low-income customers is how we are turning it into actionable data. From informing our investing to improving the support we provide to our companies after investing, we are using this data to become smarter investors in off-grid energy. We believe by being as transparent as we can with our customer impact data, we will encourage other investors and entrepreneurs to do the same so, together, we can make a more meaningful difference in the lives of the poor.
This piece is a part of a series that delves deeper into the results of Acumen’s Energy Impact Report. Get the full report here.
