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A Sunlabob technician checks solar lamps.

Laos is ranked among the 50 poorest countries in the world with 74% of the population living on less than $2 per day. The average annual electricity consumption per capita is 135 kWh, compared to a global average of 2,490 kWh, and only 48% of the population have access to the electricity grid.

The Lao government is committed to rural electrification of up to 90% by 2020 yet recognises that centralised systems cannot be relied upon to deliver electricity to remote, sparsely populated rural areas. Rural communities need alternative sources of electricity that can be delivered at the local level and at a price people can afford.

Solar energy is an obvious choice yet many initiatives have proved unsustainable because of dependence on direct subsidies to cover the upfront costs of the technology. The answer lies in making solar energy commercially viable yet affordable for the rural poor. Sunlabob has done just that. It has succeeded in developing a commercially viable business model providing high quality solar PV systems to the rural poor at a price they can afford. The success and sustainability of the scheme lies in a rental service which avoids upfront costs and direct subsidies and a network of trained rural entrepreneurs who can respond quickly to any technical hitches in the more remote areas and so maintain the high quality of the PV systems.

A network of trained franchisees install and maintain the solar PV equipment. Each franchisee trains technicians in the villages to perform day-to-day maintenance. Equipment is rented to the Village Energy Committee (VEC) which is selected by the whole community, and the VEC then leases it on to individual households. This puts the community in control of setting prices, collecting rents and performing basic maintenance. Larger systems are also supplied to health centres which has made a huge difference to the delivery of health care. Dr Sonexay Phonexaysack, a doctor at solar-powered health centre in Ban Kuai village, comments on the benefits of the system: "Before we had solar, we had to fetch essential medicines and vaccines from elsewhere, because we had no way of keeping them cool here. Often people are very ill by the time they reach here so it could make a difference to whether they live or die. With solar, we can operate at all hours. We used kerosene lanterns before, but they were dirty and smoky and the light was poor."

At present 1,870 home systems (including 20 larger ones for community use) and 500 solar lanterns are rented to families in 73 different villages. More than 5,600 solar-home-systems have also been sold to the Lao Government, development agencies and commercial enterprises as part of a separate scheme.

Solar-home-systems and portable solar lamps are rented at prices starting lower than the spending on kerosene for lighting, so that families can actually save money by switching to solar PV. Users benefit from safe light in the evening for household chores, income generating craftwork and school homework. As Mr Paek Keo Douangsouphan, a solar user says: "Before we had solar, the children could only spend an hour on their homework - till it got dark. But now they can spend enough time on it because the light is good. And that means they do better at school."

Mr Ban Ounlatsamy, adds: "I like making baskets, and now I can do them more quickly - and there's enough light for my grandchildren to do their homework as well. I was spending a lot on kerosene. Now solar gives me better light but doesn't cost so much."

These extended evening hours and the time saved from fetching kerosene and firebrands give more time to spend as a family and with their neighbours. The hazards associated with kerosene lamps such as burns, fires and indoor air pollution are removed as are carbon emissions.

"I've had the lamp for eight months, and its great. Before, if we were working in the fields or going into the forest, we used to take a firebrand but it would often go out and was useless in the rain. Sometimes the flame started fires and if you were careless you could get burnt. Now you just take the lamp and you don't have to worry about any of the that." Bounmy Chanxay, solar lamp user

The success of Sunlabob's business model and the high quality of their PV systems has led one independent renewable energy consultant with 30 years experience to comment: "I personally have been directly involved in rural electrification through solar photovoltaics in more than 25 countries. The Sunlabob project is easily the one that stands out as the best at integrating PV based rural electrification, rural business development and lifestyle improvement for rural dwellers and, most remarkably, has done so with no support from the government and with the apparently achievable goal of full cost recovery." Herbert Wade, Renewable Energy Consultant

The potential for growth and replication of Sunlabob's business model is huge. Sunlabob is already starting work in Cambodia and Indonesia, and is exploring possibilities in Bhutan, East Timor, Eastern Africa and Latin America. The main barriers for replication are the development of a local skill base and the establishment of small enterprises to run the franchises, but these are by no means insurmountable.

Sunlabob's success has led the Lao government to consult them on its rural electrification policy and also to comment: "Sunlabob really works well with local people. Because they are a private company they can make things happen quickly. If we had one or two more like Sunlabob, then I think the government would be very happy." Head of the Lao Government Rural Electrification Programme, Bouathep Malaykham

Ashden Award money will be used to expand and develop the rental services of solar lamps so that the monthly household lighting expenses can be reduced and directly compete with kerosene. Investment is required tackle the obstacles that limit the attractiveness of solar lanterns for rural communities.