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Sunday, 28 September 2008
Economics of a solar powered rickshaw
Topic: Green Business

There has been some recent buzz around the development of solar powered rickshaws. They will particularly help the rickshaw pullers in the south asian nations where they barely make a living after putting in entire day of hard physical labour. The biggest challenge with the adoption of solar technology for low end applications is the high entry level price. Most examples on the internet regarding the economics of such applications start with a solution and then try to make sense of the cost. My belief is that such a solution has to start with the economics of the problem first.

In India, there are at least a million rickshaw pullers. A typical rickshaw costs about $100 and a typical rickshaw puller makes $6 - $8 on a good day. Most of these are male adults between 18 - 60 years of age and there are some older ones too, but they dont make as much money. They are day workers and work all days. So, basically, in a typical month they make $ 150 - $200. This number is much lower in many impoverished areas.

For a technology that can benefit them, it has to bring a productivity increase at least equivalent to the cost of the technology. If we thought of upgrading the vehicle to a new one, it will be out of reach of most, since the vehicle will cost over USD 1500. It will give them more leverage to charge higher prices, but it will be hard to justify the cost.

I believe that they would be more willing to buy a kit instead that puts up a solar panel on the passenger roof and fits an electric motor in the rear panel to provide the assistance while pulling. Any battery would add to the cost and weight and should be considered optional.

A very basic Solar Panel BSP10 comes for 140 USD and I believe it can be further brought down to USD 100 for mass production. It is not the best in energy capabilities and can add 25% to the productivity of the puller when coupled with a small electric motor which will cost about 50 USD. An installation cost of USD 10 - 20 is reasonable if the installation is simple enough. After adding other overheads, a solution can be devised for USD 200 including installation.

Such an amount can be microfinanced from the several microfinance websites in play on easy terms. Lets say that this has a potential to increase the earnings of this person by 20%, so, he makes an additional USD 40 per month. Then he should be able to pay the loan within six months including interest from additional income. This is of course assuming that he will be taking the market away a little bit from competition.

I am willing to invest some time in thinking through and investing my time in this, if it turns out to help the mankind.

Posted by praneymittal at 12:25 PM PDT
Updated: Sunday, 28 September 2008 3:36 PM PDT
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