Investments in this strategy aim to reduce reliance on kerosene and other off-grid fuels to reduce air pollution and harmful emissions, decrease time limitations and financial burdens from costly fuels, and limit environmental degradation from collecting wood for cooking and heating. The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.

What

Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What is the problem the investment is trying to address? For the people experiencing the problem, how important is this change?

In emerging-market countries, heavy reliance on kerosene and off-grid solid fuels leads to emissions that harm billions of people, in addition to the expenditures and health risks associated with those fuels. Health problems can become economic burdens on households, both in terms of medical costs and the effect of poor health on the ability to work. Moreover, time spent gathering wood or other sources of fuel is time that could otherwise be spent generating income. Finally, kerosene fuel is often costly; savings from switching to clean energy can release more household spending on food, education, business inputs, and other socially beneficial goods. Investments in this strategy can contribute to impact by:

1. reducing emissions of black carbon, the second-largest contributor to global warming, after carbon dioxide (CO2) (5);
2. limiting smoke from kerosene and solid fuels, which can reduce health risks related to high concentrations of particulate matter , including heart disease, lung cancer, pneumonia, and burns (5, 6);
3. reducing the financial burden of kerosene, candles, and other solid fuels, as well as reducing emissions-related healthcare costs (7);
4. allowing household members (often women and children) to spend time typically spent on gathering wood for income generation, education, or leisure (6); and
5. limiting collection of wood, which can contribute to environmental degradation (e.g., deforestation).

What is the scale of the problem?

Every day, at two least billion people in emerging markets use kerosene lighting (1,2). Over 90% of World Bank-defined "low income groups" and over 40% of the global population use solid fuels, which include wood, charcoal, crop waste, and animal dung, for cooking and/or lighting (8). According to the World Health Organization, cooking with inefficient or unhealthy stoves leads to the deaths of over four million people every year from illnesses caused by indoor air pollution (6). As much as 10% of kerosene smoke is black carbon (4).

Who

Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who/What is helped through this strategy?

This strategy primarily targets rural households in emerging markets, the primary users of biomass and fossil fuels like wood, charcoal, kerosene, crop waste, and dung.

Low-Income Individuals, Primarily in Rural Areas: The pollution related to dirty fuel burned for cooking and lighting harms the health of people who use them, causing millions of deaths and contributing to the lower life-expectancies of people in emerging-market countries compared to developed-market countries.

Women and Children, Particularly Girls: Because women are the primary users of solid fuels for cooking and spend much of their time in the house, cooking emissions tend to have the greatest impact on their health. Women and children (especially girls) are also more likely to gather wood and other solid fuels, which can take a great deal of time. Like women, children also spend much of their time indoors, near burning fuel, and are susceptible to diseases and long-term harm caused by these emissions.

Environment and Climate Change: Black carbon emissions from kerosene and solid biomass fuels significantly contribute to global warming and can also have localized effects on rain, clouds, and snow-covered areas (1, 2). The collection of wood for fuel also causes deforestation, which further contributes to climate change and also leads to soil erosion, stream pollution, and loss of biodiversity (3).

What are the geographic attributes of those who benefit?

Of the 1.1 billion people worldwide without access to electricity and 2.7 billion worldwide without clean energy for cooking, 95% live either in sub-Saharan Africa or in Asia’s emerging-market countries (4). Approximately 80% reside in rural areas.

Contribution

Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

Is the investment’s contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How Much and Who?

Investments aiming to reduce reliance on kerosene and solid fuels, which are shown to produce high emissions of black carbon and greenhouse gases, will likely lead to better outcomes than what would occur without, although a product providing additional (not replacement) energy would necessarily make less contribution. One estimate suggested that shifting the global population now using traditional cookstoves to use of efficient cookstoves could save emissions of one billion gigatons of carbon per year, or approximately 2.5% of the world’s output (9). The extent to which this strategy can reduce the use of kerosene and off-grid solid fuels depends on the specific investee business and the product they are bringing to market.

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many can receive the outcome through this strategy?

The potential breadth of impact is dependent on the number of individuals in emerging-market countries who rely on kerosene or other fossil fuels to meet their energy needs, or roughly the 1.1 billion people worldwide without electricity, as noted above.

How much change can beneficiaries experience through this strategy?

The amount of change end beneficiaries derive from this strategy depends on the product delivered and the status-quo product(s) replaced. Individuals relying on kerosene or solid fuels could see more significant changes as a result of more renewable and reliable sources of light, compared to individuals who already use low-emissions products. Examples of change associated with investments in this strategy include the following:

  • A study of individual households in Bangladesh found that users of solar home systems reduced their annual CO2 emissions by 68.3–95.3 kg (10).
  • Studies in Peru, Mexico, and Honduras found that improved cookstoves decreased exposure to air pollutants (particulate matter), with a 70.5–74% reduction in kitchen concentrations of particulate matter and reduced personal exposure between 35% and 63% (11, 12, 13).
    - On a survey of solar lighting customers in Tanzania, the average household saved 9% of their monthly income after the purchase of a solar light, savings which households then spent on food, school costs, and farming or business inputs (14).

Illustrative Investment

SunnyMoney, a hybrid social enterprise, sells and distributes high-quality solar lights in Africa. SunnyMoney and its NGO arm, SolarAid, had sold over 1.7 million solar lights as of 2015, providing an estimated 10 million people with solar light in Uganda, Malawi, Zambia, Tanzania, and Kenya. Their products have generated an estimated USD 345 million for 1.5 million households, released two billion additional study hours for children, improved health for 5.8 million people, and averted emission of 880,000 metric tons of CO2 (15).

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

NESTA: 3
Electricity and Sustainable Development: Impacts of Solar Home Systems in Rural Bangladesh

Blunck, Michael. “Electricity and Sustainable Development: Impacts of Solar Home Systems in Rural Bangladesh.” (2007): 43.

NESTA: 2
Stiftung Solarenergie (Sts) & Hybrid Social Solutions (HSSi) - Social Impact Assessment

Planète d’Entrepreneurs. 2011. Stiftung Solarenergie (Sts) & Hybrid Social Solutions (Hssi) – Social Impact Assessment.

NESTA: 2
Micro Hydro Power Plants in Andean Bolivian Communities: Impacts on Development and Environment

González, A. Hueso, A. B. Aristizábal, and R. M. Díaz. “Micro Hydro Power Plants in Andean Bolivian Communities: Impacts on Development and Environment.” In International Conference on Renewable Energies and Power Quality, Valencia. 2009.

NESTA: 3
Access To Energy In Rwanda: Impact Evaluation Of Activities Supported By The Dutch Promoting Renewable Energy Programme

Dutch Ministry of Foreign Affairs. 2014. Access To Energy In Rwanda: Impact Evaluation Of Activities Supported By The Dutch Promoting Renewable Energy Programme. IOB Evaluation No. 396.

NESTA: 2
Application of Environmental Assessment Related to GIZ ECO Micro Hydropower Plants in the Sidama Zone/Ethiopia

Meder, Katharina, Olaf Bubenzer, and Marcus Nüsser. “Application of Environment Assessment Related to GIZ ECO Micro Hydropower Plants in the Sidama Zone/Ethiopia.” PhD diss., MSc Thesis, Heidelberg University, 2011.

NESTA: 1
Accelerating Access to Electricity in Africa with Off-Grid Solar: The Impact of Solar Household Solutions

Harrison, K., A. Scott, and R. Hogarth. “Accelerating Access to Electricity in Africa with Off-Grid Solar: The Impact of Solar Household Solutions.” Overseas Development Institute ODI Report (2016): 9.

NESTA: 2
Welfare Impacts of Rural Electrification: Evidence from Vietnam

Barnes, Douglas French, Shahidur R. Khandker, Minh Huu Nguyen, and Hussain A. Samad. Welfare Impacts of Rural Electrification: Evidence from Vietnam. No. 5057. The World Bank, 2009.

NESTA: 1
Social Impact Assessment of BBOXX in Uganda

Enea Consulting. 2012. Social Impact Assessment Of BBOXX In Uganda.

NESTA: 1
Access to Clean Lighting and Its Impact on Children: An Exploration of SolarAid's SunnyMoney

Esper, Heather, Ted London, and Yaquta Kanchwala. “Access to Clean Lighting and Its Impact on Children: An Exploration of SolarAid’s SummyMoney.” Child Impact Case Study 4 (2013).

NESTA: 2
Impact Assessment of the Solar Electrification of Micro Enterprises, Households and the Development of the Rural Solar Market

Harsdorff, Marek, and Patricia Bamanyaki. “Impact Assessment of the Solar Electrification of Micro Enterprises, Households and the Development of the Rural Solar Market.” In Research Report. PREEP (Promotion of Renewable Energy and Energy Efficiency Programme) and GTZ (Gesellschaft für Technische Zusammenarbeit), 2009.

NESTA: 1
Off-Grid Solar Market Trends Report, 2016

Global, Lighting, and Bloomberg New Energy Finance. “Off-Grid Solar Market Trends Report 2016.” Bloomberg New Energy Finance and Lighting Global in cooperation with the Global Off-Grid Lighting Association (GOGLA) (2016).

NESTA: 3
Impacts of Solar Lanterns in Geographically Challenged Locations: Experimental Evidence from Bangladesh

Kudo, Yuya, Abu S. Shonchoy, and Kazushi Takahashi. Impacts of Solar Lanterns in Geographically Challenged Locations: Experimental Evidence from Banglades. No. 502. Institute of Developing Economies, Japan External Trade Organization (JETRO), 2015.

NESTA: 3
A First Step up the Energy Ladder? Low Cost Solar Kits and Household's Welfare in Rural Rwanda

Grimm, Michael, Anicet Munyehirwe, Jörg Peters, and Maximiliane Sievert. “A First Step Up the Energy Ladder? Low Cost Solar Kits and Household’s Welfare in Rural Rwanda.” The World Bank Economic Review (2016): lhw052.

NESTA: 3
d.light Solar Home System Impact Evaluation

IDinsight, USAID, Shell Foundation, UKAID. 2015. d.light Solar Home System Impact Evaluation.

NESTA: 3
Powering Impact Phase 1 Report

Powering Impact. 2014. Powering Education Project Phase 1 Report.

NESTA: 2
Solar Lamps Field Test in Uganda: Final Report

Brüderle, Anna. “Solar Lamps Field Test in Uganda: Final Report.” German Agency for International Cooperation (GIZ) (2011).

NESTA: 1
Capturing the Multiple Benefits of Energy Efficiency: Roundtable on Industrial Productivity and Competitiveness

OECD/IEA. 2014. Capturing The Multiple Benefits Of Energy Efficiency: Roundtable on Industrial Productivity and Competitiveness.

NESTA: 3
Impacts of Rural Electrification in Rwanda

Bensch, Gunther, Jochen Kluve, and Jörg Peters. “Impacts of Rural Electrification in Rwanda.” Journal of Development Effectiveness 3, no. 4 (2011): 567-588.

NESTA: 2
Affordability and Expenditure Patterns for Electricity and Kerosene in Urban Households in Tanzania

Mnenwa, Raymond, and Emmanuel Maliti. The Affordability and Expenditure Patterns for Electricity and Kerosene in Urban Households in Tanzania. Research on Poverty Alleviation (REPOA), 2011.

NESTA: 2
Off-Grid Energy Services for the Poor: Introducing LED Lighting in the Millennium Villages Project in Malawi

Adkins, Edwin, Sandy Eapen, Flora Kaluwile, Gautam Nair, and Vijay Modi. “Off-Grid Energy Services for the Poor: Introducing LED Lighting in the Millennium Villages Project in Malawi.” Energy Policy 38, no. 2 (2010): 1087-1097.

NESTA: 2
A Comparative Risk Assessment of Burden Disease and Injury Attributable to 67 Risk Factors and Risk Factor Clusters in 21 Regions, 2990 - 2010: A Systematic Analysis for the Global Burden of Disease Study 2010.

Lim, Stephen S., Theo Vos, Abraham D. Flaxman, Goodarz Danaei, Kenji Shibuya, Heather Adair-Rohani, Mohammad A. AlMazroa et al. “A Comparative Risk Assessment of Burden of Disease and Injury Attributable to 67 Risk Factors and Risk Factor Clusters in 21 Regions, 1990–2010: A Systematic Analysis for the Global Burden of Disease Study 2010.” The Lancet 380, no. 9859 (2013): 2224-2260.

NESTA: 1
Identifying and Reducing the Health and Safety Impacts of Fuel-Based Lighting

Mills, Evan. “Identifying and Reducing the Health and Safety Impacts of Fuel-Based Lighting.” Energy for Sustainable Development 30 (2016): 39-50.

NESTA: 2
Quantifying Carbon and Distributional Benefits of Solar Home System Programs in Bangladesh

Wang, Limin, Sushenjit Bandyopadhyay, Mac Cosgrove-Davies, and Hussain A. Samad. “Quantifying Carbon and Distributional Benefits of Solar Home System Programs in Bangladesh.” (2011).

NESTA: 1
Black Carbon and Kerosene Lighting: An Opportunity for Rapid Action on Climate Change and Clean Energy for Development.

Jacobson, Arne, Tami C. Bond, Nicholoas L. Lam, and Nathan Hultman. Black Carbon and Kerosene Lighting: An Opportunity for Rapid Action on Climate Change and Clean Energy for Development. The Brookings Institution, Washington, DC (United States). Global Economy and Development, 2013.

NESTA: 2
Self-Reported Impacts of LED Lighting Technology Compared to Fuel-Based Lighting on Night Market Business Prosperity in Kenya

Johnstone, Peter. “Self-Reported Impacts of LED Lighting Technology Compared to Fuel-Based Lighting on Night Market Business Prosperity in Kenya.” Lawrence Berkeley National Laboratory (2009).

NESTA: 1
Energy, Gender, and Development: What Are the Linkages? Where Is the Evidence?

Köhlin, Gunnar, Erin O. Sills, Subhrendu K. Pattanayak, and Christopher Wilfong. “Energy, Gender and Development: What Are the Linkages? Where Is the Evidence?.” Where Is the Evidence (2011).

NESTA: 2
Impact Assessment of the Solar Electricification of Health Centers in Uganda

Harsdorff, Marek, and Patricia Bamanyaki. “Impact Assessment of the Solar Electrification of Health Centers.” Kampala, Uganda: GIZ (2009).

NESTA: 1
From Carbon to Light: A New Framework for Estimating Greenhouse Gas Emissions Reduction from Replacing Fuel-Based Lighting with LED Systems

Mills, Evan, and Arne Jacobson. From Carbon to Light: A New Framework for Estimating Greenhouse Gas Emissions Reductions from Replacing Fuel-Based Lighting with LED Systems.” Energy Efficiency 4, no. 4 (2011): 523-546.

NESTA: n/a
Rural Lighting in Kenya (forthcoming)

Innovations for Poverty Action. 2017. Rural Lighting In Kenya. Accessed July 12.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.