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Improved stoves in India: A study of sustainable business models

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  • Shrimali, Gireesh
  • Slaski, Xander
  • Thurber, Mark C.
  • Zerriffi, Hisham
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    Abstract

    Burning of biomass for cooking is associated with health problems and climate change impacts. Many previous efforts to disseminate improved stoves – primarily by governments and NGOs – have not been successful. Based on interviews with 12 organizations selling improved biomass stoves, we assess the results to date and future prospects of commercial stove operations in India. Specifically, we consider how the ability of these businesses to achieve scale and become self-sustaining has been influenced by six elements of their respective business models: design, customers targeted, financing, marketing, channel strategy, and organizational characteristics. The two companies with the most stoves in the field shared in common generous enterprise financing, a sophisticated approach to developing a sales channel, and many person-years of management experience in marketing and operations. And yet the financial sustainability of improved stove sales to households remains far from assured. The only company in our sample with demonstrated profitability is a family-owned business selling to commercial rather than household customers. The stove sales leader is itself now turning to the commercial segment to maintain flagging cash flow, casting doubt on the likelihood of large positive impacts on health from sales to households in the near term.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 39 (2011)
    Issue (Month): 12 ()
    Pages: 7543-7556

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:12:p:7543-7556

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Improved stoves; Business models; Social enterprise;

    References

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    1. Feder, Gershon & Savastano, Sara, 2006. "The role of opinion leaders in the diffusion of new knowledge: The case of integrated pest management," World Development, Elsevier, vol. 34(7), pages 1287-1300, July.
    2. Hyman, Eric L., 1986. "The economics of improved charcoal stoves in Kenya," Energy Policy, Elsevier, vol. 14(2), pages 149-158, April.
    3. Barnes, Douglas F, et al, 1993. "The Design and Diffusion of Improved Cooking Stoves," World Bank Research Observer, World Bank Group, vol. 8(2), pages 119-41, July.
    4. Howells, Mark I. & Jonsson, Sandra & Käck, Emilia & Lloyd, Philip & Bennett, Kevin & Leiman, Tony & Conradie, Beatrice, 2010. "Calabashes for kilowatt-hours: Rural energy and market failure," Energy Policy, Elsevier, vol. 38(6), pages 2729-2738, June.
    5. Kremer, Michael Robert & Miguel, Edward A., 2004. "The Illusion of Sustainability," Center for International and Development Economics Research, Working Paper Series qt94p8w1d7, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    6. Rao, P. Sharath Chandra & Miller, Jeffrey B. & Wang, Young Doo & Byrne, John B., 2009. "Energy-microfinance intervention for below poverty line households in India," Energy Policy, Elsevier, vol. 37(5), pages 1694-1712, May.
    7. Edwards, Rufus D. & Smith, Kirk R. & Zhang, Junfeng & Ma, Yuqing, 2004. "Implications of changes in household stoves and fuel use in China," Energy Policy, Elsevier, vol. 32(3), pages 395-411, February.
    8. Smith, Kirk R. & Shuhua, Gu & Kun, Huang & Daxiong, Qiu, 1993. "One hundred million improved cookstoves in China: How was it done?," World Development, Elsevier, vol. 21(6), pages 941-961, June.
    9. Bailis, Rob & Cowan, Amanda & Berrueta, Victor & Masera, Omar, 2009. "Arresting the Killer in the Kitchen: The Promises and Pitfalls of Commercializing Improved Cookstoves," World Development, Elsevier, vol. 37(10), pages 1694-1705, October.
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    Cited by:
    1. Cheng, Shikun & Li, Zifu & Mang, Heinz-Peter & Neupane, Kalidas & Wauthelet, Marc & Huba, Elisabeth-Maria, 2014. "Application of fault tree approach for technical assessment of small-sized biogas systems in Nepal," Applied Energy, Elsevier, vol. 113(C), pages 1372-1381.
    2. Richter, Mario, 2013. "Business model innovation for sustainable energy: German utilities and renewable energy," Energy Policy, Elsevier, vol. 62(C), pages 1226-1237.
    3. Sesan, Temilade & Raman, Sujatha & Clifford, Mike & Forbes, Ian, 2013. "Corporate-Led Sustainable Development and Energy Poverty Alleviation at the Bottom of the Pyramid: The Case of the CleanCook in Nigeria," World Development, Elsevier, vol. 45(C), pages 137-146.
    4. Troncoso, Karin & Armendáriz, Cynthia & Alatorre, Silvia, 2013. "Improved cook stove adoption and impact assessment: A proposed methodology," Energy Policy, Elsevier, vol. 62(C), pages 637-645.
    5. Vahlne, Niklas & Ahlgren, Erik O., 2014. "Policy implications for improved cook stove programs—A case study of the importance of village fuel use variations," Energy Policy, Elsevier, vol. 66(C), pages 484-495.
    6. Vanschoenwinkel, Janka & Lizin, Sebastien & Swinnen, Gilbert & Azadi, Hossein & Van Passel, Steven, 2014. "Solar cooking in Senegalese villages: An application of best–worst scaling," Energy Policy, Elsevier, vol. 67(C), pages 447-458.

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