Q1: Acumen’s Pioneer Energy Investments Initiative PLUS, is a five-year, $ 25 million initiative that invests early-stage capital in companies that provide renewable energy-powered solutions to micro-entrepreneurs and smallholder farmers in India and Africa. The goal is to leverage these technologies to boost incomes and climate resilience in vulnerable communities.

a) What made you focus specifically on this segment?

The productive use of the energy sector is still emerging, but it demonstrates the incredible potential of decentralized renewable energy solutions for powering not just basic energy access like homes but building an entirely new market ecosystem of businesses and sectors based around locally-led, climate-smart innovation.

b) Could you highlight the potential and related challenges that you observed, that merited a focused accelerator support?

As part of the Pioneer Energy Investment Initiative (PEII+), together with Acumen Academy and with the support of Apple, we launched the Energy for Livelihoods Accelerator India program in 2023, bringing together 15 of the most promising entrepreneurs in the sector to develop their business models, and build a community.

The impetus behind the Energy for Livelihoods Accelerator program lies in the challenges these solutions face in scaling. The high upfront costs make these technologies inaccessible for low-income households. Furthermore, the early-stage companies developing these technologies often lack the capital, ecosystem support, and expertise needed to scale effectively. The renewable energy market in these areas is also fragmented, with weak supply chains, limited technical support, and inadequate policy frameworks, making it difficult for companies to thrive and for communities to access and maintain these appliances.

By nurturing innovation, building market readiness, and fostering a supportive ecosystem, the accelerator ensures that these companies can develop sustainable business models, scale their operations, and reach the communities that need them most. The purpose was also to strengthen the broader sector.

Q2: For the benefit of our readers, could you shed some light on the landscape of Productive Use of Energy (PUE) solutions in India?

What are the nature of innovations you are coming across and at what stage of growth are they?

India is ripe for innovations in the PUE sector, showcasing a dynamic ecosystem of innovative solutions. This landscape includes a variety of solutions, such as solar-powered cold storage, smart farm management devices, and e-mobility options. For example, Mowo Fleet in Hyderabad offers training and work opportunities through electric two-wheelers and three-wheelers specifically designed for women drivers, empowering women to enter the mobility workforce. S4S Technologies is addressing food waste while generating income for rural communities through solar-powered food processing, recently winning the Earthshot Prize for its impact.

We shortlisted 15 diverse innovations that were a part of this accelerator. There is a pipeline of a variety of innovations tailored to address the challenges faced by users in remote areas with unreliable power. For instance, Suryanirbhar Agritech offers emission-free technologies for post-sowing activities, specifically catering to smallholder farmers. Companies like Yotuh Energy are pioneering electric refrigeration systems for trucks, enabling microentrepreneurs to access cold chain logistics for perishables.

Successful PUE solutions integrate technology with market access; some examples from our portfolio companies include Promethean Power Systems, which partners with NGOs to connect farmers to larger dairy markets, ensuring the collection of high-quality milk. Financing models play a critical role as well, with Oorja Development Solutions employing a pay-per-use model for solar pumps to make essential equipment more affordable for smallholders.

Q3: The report highlights how PUE solutions lack the presence of a conducive ecosystem to reach their solutions at the last mile.

From your experience with the accelerator, what are the key priority areas where ecosystem support needs to be developed?

Reaching and customizing clean energy solutions for dispersed and low-income communities requires partnerships, creativity and patience.

Firstly, partnerships are essential. Collaborations between startups, NGOs, local governments, and larger enterprises can facilitate better market access and distribution channels. By leveraging existing networks, companies can more effectively reach target communities, and establish credibility for the new technologies. Initiatives within the accelerator include DD Solar, which partnered with Rajeevika, an initiative involving women self-help groups in Rajasthan, to introduce solar-powered cold chain solutions in rural areas.

Secondly, end-user financing mechanisms are crucial. Many PUE solutions face high initial costs, which can be a barrier for low-income communities. Jaljeevika is a company that has ensured accessibility for farmers by linking the product with available subsidies under the federal Ministry of Fisheries and the Rural Livelihood Mission. In addition, Jaljeevika has developed partnerships with financial institutions that will enable the user to pay for the product over time.

Additionally, training and capacity building are needed to empower local stakeholders and improve the after sales services, particularly in rural areas. Initiatives like EMPBindi's training for rural women to provide after-sales support demonstrate how skill development can enhance service delivery and product adoption.

Lastly, awareness and education initiatives are essential to inform communities about the benefits and usage of PUE technologies. For example, Aumsat has taken the lead in raising awareness about their solar-powered water conditioners by conducting workshops and engaging with local leadership, such as village heads, to demonstrate the impact of their technology on improving irrigation water quality.

Q4: You speak about how physical challenges and behavioral barriers hinder the large-scale adoption of PUE solutions.

What are the nature of partnerships that the accelerator enables, that have helped address these issues? Could you share a few examples from your cohort?

There can be a lack of awareness or understanding of these technologies among potential users, leading to skepticism about their benefits. Behavioral barriers also play a crucial role. Cultural norms and practices may influence the acceptance of new technologies, making communities hesitant to change established methods.

Collaborating with local NGOs, government agencies, and community organizations who have strong relationships and are trusted by communities can ensure that PUE solutions are tailored to meet the specific needs and circumstances of users.

The public sector will be a critical player if energy companies are to overcome these barriers. The Indian government is supporting productive use of energy with targeted subsidies that make off-grid energy products more affordable and accessible. Additionally, strengthening partnerships between enterprises and the national and state-level rural livelihood schemes, such as India’s National Rural Livelihood Missions, can help businesses reach last-mile customers, establish credibility of the new technology, scale operations, and attract much needed investment capital.

Aumsat partners with local governments under initiatives like the Jal Jeevan mission and Mowo fleet uses a targeted approach through social media channels to reach their target market.

Q5: The report cites examples of innovative enterprises which have balanced tech-innovation and keeping the end-user requirements in mind.

From your experience, what could be the pathway for entrepreneurs in this space, to design, develop and implement a solution that leverages technology and is yet able to address the intrinsic needs of the sector?

What should early-stage entrepreneurs keep in mind?

Innovative enterprises in the Productive Use of Energy (PUE) sector successfully balance technology and end-user requirements by prioritizing user-centric design and engagement throughout the development process. For entrepreneurs in this space, the pathway involves a few key steps.

First, conducting thorough market research is essential. Entrepreneurs should actively engage with potential users to guide the design and functionality of solutions, ensuring they are practical and relevant.

Second, entrepreneurs should adopt a flexible approach to technology. Solutions must be adaptable to various contexts. This iterative process allows for continuous improvement and ensures that the technology remains aligned with user needs.

Third is to think beyond technology. Entrepreneurs should consider additional requirements that will ensure the solution is profitable for end users. For instance, providing training on how to use the products effectively, and integrated support services—like farmer advisory programs or access to markets.

Finally, early-stage entrepreneurs should focus on developing sustainable business models that consider affordability and accessibility. Financial viability is crucial, so incorporate innovative financing options, like pay-per-use models.

Q6: What are the nature of synergies that Acumen seeks through the accelerator that can enable impact on a larger scale?

Could you highlight some priority areas in the near-term?

Acumen seeks to create synergies through its accelerator by bringing together diverse stakeholders. This involves connecting entrepreneurs with funders, investors, and established organizations, allowing them to leverage shared resources, knowledge, and networks.

In the near term, a key priority is enhancing access to patient capital for early-stage enterprises. Many startups face capital constraints, so Acumen focuses on supporting our portfolio companies in developing innovative financing approaches that make their business models commercially viable.

Acumen also emphasizes capacity building within the ecosystem by providing entrepreneurs with technical support, mentorship, and training to enhance their operational capabilities. Promoting knowledge sharing among cohort members is vital, as it fosters a collaborative environment where best practices and lessons learned can be exchanged.. From our cohort, 10 out of 15 startups are pursuing partnerships post the program.

Background of Acumen

Acumen is an impact investment fund based in the U.S. that focuses on investing in social enterprises working to break the cycle of poverty. Acumen supports social entrepreneurs across the capital continuum and accompanies them on the journey to build sustainable markets and create transformational change. Operating in India since 2001, Acumen focuses on sectors at the intersection of climate and poverty: off-grid energy, resilient agriculture, and dignity of work. Acumen India has deployed over $ 43 million across 44 companies, reaching 94 million of lives through market-based solutions.