Market Infrastructure Perspective Is it Available

The market infrastructure perspective instructs us to consider the presence of local diffusion agencies that are actively propagating an innovation, as well as providing installation and after-sales service. In the case of solar in rural areas of emerging markets, we can imagine why such an infrastructure would be important. Unelectrified households tend to live in more remote locations, where existing support infrastructure of all kinds is weak. Many would not even be aware of solar as a solution, and even if they were, they would be wary because of the up-front costs. Even if they were convinced to buy, they would struggle to find a sales point, and would struggle even more to find a trained technician to help them install the system and to turn to in the event that it broke down.

In the early to mid 1990s people started to realize that the lack of this infrastructure was holding solar back.53 Some proclaimed the 'need for a solar infrastructure'.54 Others found that after consumer finance, 'a second crucial element is the building and strengthening of a local market infrastructure'.55 In Sri Lanka, for instance, it was found that in addition to the lack of credit, the main obstacle to wider diffusion was an 'underdeveloped sales and distribution infrastructure'.56 Indeed, the importance of such an infrastructure can be inferred from the statement of a solar executive in Asia: 'If I had the retail outlets that Honda has for diesel generators, we'd be a massive business.'57

In terms of a sales infrastructure, the early experience in solar diffusion suggested that it was not enough to set up sales points and wait for the customers to come in. It was necessary to go out to the customer, effectively selling door-to-door, to raise awareness and convince customers to part with a large chunk of their annual income for a new technology.

In the Dominican Republic, trained technicians were said to 'constitute the "front line" in PV promotion in terms of influencing public perceptions of the product ... because they are the ones who work most closely with the clients'.58 Here each technician was treated as a small-business owner responsible for sales, installation and maintenance of systems. And giving some hint as to their importance, it was found that solar diffusion largely kept up with the number of such technicians, which grew from:

zero in 1992 to more than 20 [in 1995] actively installing systems in each of the country's 18 departments. ... The number of systems installed during each year has grown exponentially with the number of small businesses, jumping from 60 installed during 1993 to 300 during 1994 and to 550 during the first half of 1995, and by the end of 1995 it was estimated that over 1000 systems had been sold.59

In Mexico, a major electronics company trained over 60 dedicated sales agents, called promotores, and asked them to demonstrate and sell the product, provide upgrades, and carry out limited servicing. Their conclusion was that these agents were 'the most valuable asset in the diffusion of solar home kits'.60 In Kenya, it was concluded that the driving force behind the relatively more rapid diffusion of solar in the late 1980s and early 1990s was the combination of hundreds of trained sales agents plus rural technicians.61

Returning to the terminology of the market infrastructure perspective, it is important to also consider the extent to which solar is an 'infrastructure-constrained innovation'. It may not be constrained in the same way that a telephone requires a connection to a national telecommunication infrastructure to work. But it is constrained in the same way that the early diffusion of the photocopier may have been constrained - that is, if it is not installed well and serviced regularly, it can break down, and if there are any technical difficulties, it helps to have a technician to troubleshoot.

It is not enough, then, to put up sales points and put sales people into the market. It is just as important to have an installation and after-sales service capacity:

Of course, it is easy to open a store and sell systems; it requires much more to develop a service capability. But if solar systems are to become an integral part of rural electricity development, service must be provided.62

Installing a solar system is not easy, and most of us would get something wrong in doing it ourselves. The solar module has to be positioned correctly towards the sun: both its tilt angle and the direction it is facing. It also has to be secured well, to ensure that it does not disappear with the next typhoon or monsoon rains. And if a household has installed a system that powers four or five lights, then the lights will also need to be installed properly, the entire house wired and the lights connected to wall-mounted switches. Furthermore, additional sockets need to be arranged for other appliances, and the charge controller needs to be mounted and connected to the battery. In addition to this, there would then be a need for customer education on how best to use the system and manage household energy requirements, as well as an understanding of what to do to maintain the batteries, and who to turn to for support if the system fails.

This need for a strong installation and service support is something that comes up time and again in the early reports on solar diffusion. For example, experience in the South Pacific found that the success of solar electrification programmes was highly correlated with training and equipping of techni-cians.63 Moreover, to do their job effectively, these technicians needed to have access to a ready supply of spare parts for servicing.64 Customers could not be expected to install, maintain and service the systems themselves - they fundamentally needed assistance:

While the simple design and dependability of the solar home system allows a single technician to service a large number of customers, the need for local technical support remains. Users can perform simple maintenance functions. However, field experience shows that very few households can service their system themselves over long periods of time.65

The absence of this essential technical infrastructure in many emerging markets meant that by the turn of the century it was estimated that 10-20 per cent of household solar systems around the world were no longer operational.66 Returning to the communication perspective, we can in turn conclude that this would have damaged customer perception of solar, and further served to limit its early diffusion.

In the end, when we talk about a market infrastructure for solar, we are talking about sales points, delivery channels, trained sales people, trained and equipped technicians, and access to spare parts. This kind of infrastructure is often taken for granted when it comes to buying a more established product, for instance a new stove:

A European wants a new cooker. They will choose from the cookers available to them, undertake to pay the capital and running costs, often by monthly payments, make space in their kitchen, arrange for gas or electricity ... organize delivery, installation and maintenance. ... These actions are easily done in a consumer society, because the industrial, commercial and financial infrastructure already exists to facilitate such transactions. In other circumstances and in other societies, this infrastructure may be incomplete and the receipt of technology may be impossible unless these problems are identified and addressed.67

In the 1990s, a market infrastructure for solar had only begun to be built, and that too in only a handful of emerging markets. Overall, this critical infrastructure was simply missing. Neither the product nor the trained technical support that customers required to purchase a solar system was easily available, and consequently diffusion suffered.

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