Improved stoves in India: A study of sustainable business models

• Published in: Energy policy 2011-12, Vol.39 (12), p.7543-7556
• Main Authors: Shrimali, Gireesh, Slaski, Xander, Thurber, Mark C., Zerriffi, Hisham
• Format: Article
• Language: English
• Subjects: Air pollution; Biomass; Biomass energy; burning; Business; Business models; Carbon emissions; Cash flow; Channels; Climate change; consumers (people); Cooking; Cost-benefit analysis; Developing countries; Economic models; Energy consumption; Energy policy; Environmental economics; Environmental impact; family-owned businesses; Financing; funding; Global warming; Health; Health care; Households; Improved stoves; India; interviews; Management; Marketing; New technology; Non-governmental organizations; Nongovernmental organizations; Ovens & stoves; Pollution control; Poverty; profitability; Public health; Sales; Social enterprise; Stoves; Studies; Sustainability; Sustainability management
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2011.07.031

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. ► Business models to sell improved stoves can be viable in India. ► Commercial stove efforts may not be able to deliver all the benefits hoped for. ► The government could play a useful role if policies are targeted and well thought-out. ► Develops models for that hard-to-define entity mixing business and charity.