FA info icon.svg Angle down icon.svg Organization data
Type Microfinance Platform
Founded 2009
Founders Hugh Whalan
Scott Tudman
Location United States
Area served Africa

Energy in Common(EIC) is a not-for-profit organization, which is the first to enable microloans specifically and only for renewable energy technologies. EIC was founded by Hugh Whalan and Scott Tudman in 2009 (website launch 2010). It has the very ambitious goal of delivering renewable energy to 15 million people in the next five years, while fighting poverty by empowering developing world entrepreneurs through microloans.[1] EIC represents one of the most promising contenders in the growing green microfinance sector.

EIC operates very similarly to Kiva. In the case of Kiva, lenders provide funds with zero return expected to developing world entrepreneurs to invest in their businesses (typical loans are for things like seeds for farming). EIC does this as well, but specifically focuses on purchasing renewable energy systems like solar photovoltaic panels.

What makes EIC particularly unique in the microfinance non-profit sector is that they have created a model to measure the greenhouse gas emission reductions that are created by their loans. The EIC model helps provide funding to developing world entrepreneurs for energy solutions and also helps to channel additional funding into mitigating climate change.

How Energy in Common Works[edit | edit source]

  1. EIC enables individuals to lend money to poor entrepreneurs in the developing world via website using a Kiva-like model that connects individual lenders and borrowers. Upon choosing a borrower the lender can decide how much to lend - either a fraction or the entire loan requested by the borrower. The minimum loan is set at $25 for the standard microloans and $5 for their innovative nanoloans (discussed below). The total of a given range is usually found between $40 and a thousand dollars. When enough individual lenders have provided the fractional loans to a borrower and the total amount required has been reached, the loan is dispersed by the EIC. All of the EIC loans are meant to directly alleviate poverty and mitigate greenhouse gas (GHG) emissions.
  2. EIC has partnered with several microfinance institutions (MFI)s. The MFIs provide EIC with lists of potential borrowers, which are screened by the EIC before any individual borrower is profiled. MFIs are responsible for disbursing the loan directly to the borrower and all maintenance and support services to the borrower after the energy product is purchased. To cover the expenses related to this responsibility, the MFIs receives all of the interest charged to the customer for the loan. For their part, the EIC helps their MFIs partners with sourcing reliable energy technologies. Currently, EIC works with four MFIs all based in Sub-Saharan Africa, but has plans to expand into other regions.[2]
  3. When a loan is repaid, funds are deposited back into the lenders account and EIC calculates the individual project's GHG emission reductions. These GHG emission reductions can be used by a lender to offset their carbon emissions through a tax deductible donation to EIC. Presumably the carbon credits may also be sold to third parties. The total carbon emission offsets are determined for a project by subtracting the carbon emissions before and after the energy loan was provided.

Appropriate Technologies Funded by EIC[edit | edit source]

The following list of primarily renewable energy technologies:[3]

Biodigesters[edit | edit source]

Biodigesters convert organic wastes such as food waste, human waste and animal waste into nutrient rich liquid fertilizer and biogas (thus a renewable fuel made up primarily of methane). A biodigester is made up of a bag or tank that holds the organic 'wastes' over a period in which bacteria breaks down the organic matter and produces biogas. Biogas is used as a replacement for kerosene, firewood, or any other combustible fuel source used in the developing world such as cow dung. Biodegesters thus produce renewable energy, cut down on odors and pathogens in organic materials, reduce surface and groundwater contamination, improve indoor air quality and provide a source of high quality organic fertilizer as a byproduct -- that has been shown to improve crop yields and decrease fertilizer costs.(citation needed)

Clean Burning Stoves[edit | edit source]

Clean burning stoves improve the fuel utilization over common stoves. There are several types but the ones funded often burn propane instead of less efficient fuels such as wood, charcoal, or dung. This is somewhat controversial as currently this allows for economic savings although clearly there is a potential to have negative effects of becoming dependent on a non-renewable energy source, which in many cases needs to be imported. Less controversial, is a clean burning stove that uses wood, charcoal, or dung, but burns more efficiently. These stoves funded by EIC are designed to increase the airflow to the fuel source, creating a better flame and reducing the amount of fuel required to provide a given amount of heat to the target (e.g. it takes less fuel wood to cook dinner). Both types of clean burning stoves reduce the costs associated with fuel use and improve the indoor air quality within the homes of the users.

Solar Powered LED Lighting[edit | edit source]

The LED lamps combine a small solar photovoltaic panel with a rechargeable battery and an array of LED lights into an effective lighting system, which is used to replace dangerous (indoor air quality, GHG emitting, and fire hazard) kerosene lamps. LED lights are known to be very efficient, which prolongs illumination time on the charging made available by the PV.

Solar Photovoltaic Home Systems[edit | edit source]

A typical solar photovoltaic home system funded by EIC consists of a small solar panel (both pole or roof mounted) connected to a charge controller and a small battery. The stored solar electricity can be used both in the day and after dark to power lights and an electrical socket for other electrical equipment (e.g. cell phone charger, OLPC, radio, TV, or computer).

Carbon Offsets[edit | edit source]

EIC creates carbon offsets from emission reductions that have occurred over the loan term and only once the loan term has finished. In this way, lenders and those that make donations to retire carbon credits can be sure that all emission reductions have already happened.[4] They do this by providing a detailed questionnaires before, during and after the loan, and in-depth field surveys conducted by both by EIC and independent auditing firms in order to sell the carbon offsets. The particularly clever part is that loaners may then buy the carbon credits and get a tax credit from EIC.

Nanoloans[edit | edit source]

In order to overcome the initial investment barrier that many people have when considering microfinance EIC developed the "Nanoloan" concept. For most microfinance institutions (e.g. Kiva) the minimum loan is $25 and the average time until about 18 months. This can put a lot of well-intentioned people off of the concept. EIC Nanoloans are a limited run of $5 loans, specifically designed to be repaid in just 60 days..[5] The object of offering nanoloans is to introduce new lenders to the entire microlending process fast.

EIC Impact[edit | edit source]

EIC has been covered extensively in the green alternative press including The Huffington Post,[6] Mother Nature Network,[7] GreenBiz, the Next Billion[8] and the standard press such as CNN.[9]

See also[edit | edit source]

External Links[edit | edit source]

References[edit | edit source]

  1. M. Popova. Energy In Common: New Microfinance Venture Fights Poverty with Clean Energy. The Huffington Post. April 19, 2010. https://www.huffingtonpost.com/maria-popova/energy-in-common-new-micr_b_542278.html
  2. http://www.nextbillion.net/blog/energy-in-common
  3. Energy Technologies. EIC. Available: http://www.energyincommon.org:80//about/energytechnologies.cfm visited Jan 4, 2010.
  4. http://www.energyincommon.org:80//about/glossary.cfm#carbonprocess
  5. http://www.energyincommon.org:80//nanoloans/index.cfm
  6. M. Popova. Energy In Common: New Microfinance Venture Fights Poverty with Clean Energy. The Huffington Post. April 19, 2010. https://www.huffingtonpost.com/maria-popova/energy-in-common-new-micr_b_542278.html
  7. S. Gunther. Energy In Common: It's like Kiva, but greener. Mother Nature Network. April 26, 2010. Available: http://www.mnn.com/earth-matters/energy/blogs/energy-in-common-its-like-kiva-but-greener
  8. M. Bueno. Pushing Forward Energy Microfinance: Energy in Common. Next Billion. June 8, 2010. http://www.nextbillion.net/blog/energy-in-common
  9. http://cnn.com/video/?/video/bestoftv/2010/10/09/nat.energy.in.common.cnn
FA info icon.svg Angle down icon.svg Page data
Keywords microfinance, renewable energy, poverty alleviation, eradicating poverty through profit
SDG SDG01 No poverty, SDG07 Affordable and clean energy
License CC-BY-SA-3.0
Language English (en)
Related 0 subpages, 3 pages link here
Aliases EIC, Energy in common
Impact 454 page views
Created January 4, 2011 by Joshua M. Pearce
Modified April 29, 2024 by Kathy Nativi
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