Of Insects and Lightning: Unexpected Realities of Operating in a Challenging Business Environment

Beetle buried in electrical plug

By Andy Bilich

An audible crunch and a real (ok, maybe imagined) hiss are not what you expect when plugging in your phone, but that’s exactly what greeted me a few weeks ago when I accidentally squished a beetle inside my electrical outlet.

Bugs are not exactly top of mind when you think of the business of solar microgrids, but over the past few months about 5% of customers have lost plugs due to the presence of ants and other insects. While the cost to replace an outlet is nominal, plug problems  nonetheless interrupt service for customers and take technician time away from other work.

Beyond bugs, lightning looms as another significant risk for microgrid operations, particularly customer meters. In the last few months 24 meters have been damaged by lightning strikes and surges. The meters range in price based on the level of electricity service they support, but even the most modest meters cost around $35 USD. Larger meters used for grid management cost upwards of $150 each.

To account for these operational risks, EarthSpark stocks backup inventory, but more importantly the team must integrate technology, systems, and processes that proactively manage these risks. This includes surge protection devices, efficient protocol for responding to lighting strikes on our electricity poles and customer outreach and training on plug maintenance and protection.

---

Customer Meters and Plugs Damaged by Lightning Strikes

​Microcosm of a challenging business environment for microgrids
Of course, lightning and insects are a microcosm of a larger, more challenging business and operating environment for energy access in Haiti.  Haiti is ranked 182 out of 190 countries in the World Bank Doing Business Rankings which systematically measures how difficult it is to conduct business in a given country across a variety of metrics. For Haiti, this difficulty is particularly reflected in commercial banking, the regulatory environment, and the cost of procurement of materials and land. Navigating these challenging yet essential business processes are all further complicated by the remote locations of EarthSpark’s microgrids, with limited infrastructure and high costs associated with transportation. When we hire a delivery truck, for example, we need to be sure it can navigate crossing the Les Anglais riverbed, and we work to time things so that the river is not too high to cross when the shipment makes the journey.

The World Bank’s Scaling Renewable Energy Program (SREP) Investment Plan for Haiti  highlights that renewable energy projects, and microgrids in particular, face additional operational challenges including but not limited to:

• Lack of regulatory and policy framework in the energy sector – The current regulatory environment is not well-defined, which creates high risks and uncertainty for planning and operations.
• Insufficient policy support for renewables – Current policy disadvantages both grid and off-grid renewables against their fossil fuel alternatives. Renewable energy equipment is subject to import duties and VAT tax, which can amount to over 30% of the product value, while fossil fuels enjoy subsidies.
• Devaluation of currency and related cost-recovery – Devaluation and fluctuation of local currency creates an operational risk for cost-recovery due to the high costs of imports for microgrid components and local tariffs. The Haitian Gourde is now worth less than half of what it was worth when the Les Anglais grid expansion launched in 2015.
• Low-levels of awareness and energy literacy for rural households – Households presently have a distinct need for improved energy literacy and awareness, particularly as it relates to energy efficiency, productive uses of electricity, and available technology.  

Derisking by doing
Well aware of these challenges, EarthSpark is nevertheless moving microgrids forward in Haiti. We describe our approach as ‘de-risking by doing’.  While good planning and critical thinking are essential elements of building a sector, only by building actual grids in real towns and having real-world conversations with policy makers and funders will we uncover the full set of challenges and their remedies.  EarthSpark’s push for pioneering infrastructure is helping to determine how infrastructure is defined and regulated in Haiti and beyond:

• Ground truthing real business costs. Through our experiences in Les Anglais and Tiburon, EarthSpark is able to ground-truth the real business cost of microgrid development and operations in Haiti and document critical pathways for improving the business environment. By sharing our work and challenges directly with regulators in Haiti as well as international stakeholders like the World Bank, we can support initiatives and efforts in the sector. As an example of this the World Bank SREP Investment Plan cites EarthSpark’s model and work 13 times as evidence of good practices, opportunities, and challenges for rural electrification in Haiti.
• Clearly communicating vulnerabilities. As the microgrid and energy access sector continues to grow and importantly develop more formalized regulations and frameworks, we continue to inform that process by practically demonstrating bottom-up legal and business vulnerabilities and advising of what capacity building actions are needed to shore up those vulnerabilities.
• Ensuring clean energy is an opportunity for all. Beyond building grids, EarthSpark also works extensively to increase demand sustainably and facilitate a just energy transition through customer education and outreach, cradle to cradle considerations for design, and driving best practices and opportunities for gender mainstreaming through the Feminist Electrification Platform.
• Leveraging public private partnerships. EarthSpark works directly with local mayors and communities to facilitate public and private co-operation to build an ecosystem for enterprise in emerging markets. This creates ownership and buy-in which not only empowers local stakeholders to take part in their own energy governance, but also improves the long-term sustainability of the systems.

By continuing this work and leveraging our lessons learned to showcase the value and opportunity for microgrids to regulators and stakeholders, particularly for providing a measure of resiliency and stability for rural communities in Haiti, EarthSpark plays a critical role in improving the business environment and ultimately driving clean energy progress for communities across Haiti.