Innovation at Bottom of Pyramid - Husk Power System: Electrifying Rural India (A Case Study)

Abstract

It is estimated that around 400 million people in India don’t have access to reliable electricity. Hardest hit of this power scarcity is the rural population. Various Subsidy, incentive etc for new and renewable energy has been provided by government of India to increase their penetration for attainment of the national goal of Energy for all by 2012.New and renewable sources of electricity is not just about technology but Organizations appealing to the bottom of pyramid customers requires a business model innovation and unique implementation process for a better value offering for their customers along with sustainable development of the organization.The problem of power scarcity and its impact on social development is addressed by two entrepreneurs from Bihar with their company: Husk Power Systems (HPS). The company generates electricity from rice husk, a waste product of rice milling.Research has been carried out to investigate the success determinants of the firm by using a model of “Integrating elements of a business model” by a case based approach. Various integrating elements are been discussed in this paper. Developing new business models should always begins with devising a new Customer Value Proposition (CVP). Models designed to compete on differentiation next establish the resources and processes needed to deliver the CVP, the cost of which determines the price required in the profit formula. Models designed to compete on price proceed in the opposite way, establishing first the offering’s price, then the cost structure, and finally the processes and resources required.HPS integrates on both differentiation with low cost.