The Paradox of Mini-Grids : A Conflict between Business Viability and Customer Affordability

Mini-grids are growing in popularity as a viable solution to energy poverty in rural, hard to reach areas consisting of Bottom-of-the-Pyramid (BoP) markets. Social enterprises are starting to play a vital role in providing services to this neglected customer group but often face difficulties resulting from rural market imperfections. In this study, we aim to address the following research question: how and to what extent can a mini-grid based social enterprise resolve the technical and organisational challenges associated with providing services in a rural BoP environment? Using Husk Power Systems (HPS) as a case study, our interdisciplinary approach navigates the landscape between social entrepreneurship and socio-technical aspects of mini-grid operations in the rural BoP market. The case study is based on interview evidence with ten HPS employees, three founders and 22 user interviews. We make use of narrative analysis to analyse the interview material. The paper argues that continuous conflicts exist between social and commercial objectives concerning mini-grid operations in the rural BoP markets. As this case study reveals, social enterprises need to manage the socio-technical challenges inherent to mini-grid processes; otherwise, customer affordability and business viability become an unsolvable paradox