Switch On O’Nergy: Social Innovation Challenges At the Bottom-of-the-Pyramid

Abstract

Switchon O’Nergy is a solar venture based in Kolkata, with operations in West Bengal, Orissa, Jharkhand, Bihar, and North East and two business divisions of energy access and solar rooftops entered the market in 2009. They focused on the last mile distribution of solar power. However like all NGO’s, a common concern was the unavailability of finance, and to use the subsidies to provide solar solutions to the BoP community. This egged Mr Jaju to came up with a unique business model – both in reaching out to the poor in Eastern India and to provide them accessible and available finance options. O’Nergy operated in solar power which had planned equity returns hovering around 13-16% and debt costs around 12-13%. Competition was intense with some big names and deep pockets, like the Tata’s and some other small and medium operators mushrooming in an already bottled necked area. However most players had tainted reputations of providing poor service. This was the arena that the Jaju’s of O’Nergy operated in. The case invites students to consider the strategic choices open to Mr Jaju and his family as they cope with growing competition, decisions on whether to venture into newer states and the ramifications of the decision and would their same distribution strategy hold good if they scaled and would the current business model be sustainable. Jajus are also on a tight rope deciding on investments to diversify their product range, stop outsourcing, move to cover more states or penetrate deeper geographically in their existing areas of operation. Set in the business context of 2016, the burning question the case poses is how to make Switchon O’Nergy sustainable.