NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

If you think George Bush’s solar powered spa is hot, hot, hot, then wait to you hear about Fabio Rosa and his electrifying projects south of the border. Who is this man, you might wonder? Well, Fabio Rosa is a social entrepreneur?a businessman with both social and economic motivations?who has spent the last twenty years bringing electricity to rural areas in Rio Grande do Sur, Brazil’s southern most state. In the early 1980s Rosa achieved the status of a cult hero after he introduced a technology that reduced energy prices by 90%, making electricity affordable to thousands of low-income residents.

But when Brazil privatized its electricity infrastructure in the late 1990s, Rosa, who was working with the publicly owned utilities, saw his projects come to a grinding halt. ?The [private] utility companies had little experience working with low income rural markets, and saw no incentive to provide electricity to rural off-grid communities,? Yerina Mugica explains.Determined to press on and meet the needs of Brazil’s BOP, Rosa founded The Sun Shines for All program (TSSFA) that aimed to provide off-grid electricity to rural communities. Through market research TSSFA discovered that rural Brazilians spent an average of $11 per month on batteries and other nonrenewable energy sources like candles and kerosene. The organization also discovered that most rural Brazilians were not interested in buying solar panels. Armed with this knowledge, TSSFA decided that selling solar panels made little sense. Instead, it opted to rent them on a monthly basis, charging customers an initial installation fee and a monthly rental fee. Rosa’s business model, which is specifically tailored to the BOP, has been met with a wave of success. He now plans to expand his business throughout Brazil.

The social benefits of a program like TSSFA’s are enormous. As the Guardian reported last week, rural to urban migration has skyrocketed, with an increasing number of city dwellers seeking refuge in sprawling slums. Introducing conveniences like electricity into rural areas is the first step for slowing the flow of urban migration and alleviating the burden that migrants place on cities. And let’s not forget that solar energy is sustainable and environmentally friendly.

From a business perspective, electricity can be an important economic catalyst, driving commerce in a region. Although it’s too soon to tell, with a little luck, electrified villages might transform into the cities of the future. And who knows, maybe someday Rosa’s solar panels will be used to power a spa like the one used by President Bush. Now that would be hot.