How to Tackle Energy Poverty? Using Products as a Service and Partnering with Corporates
One-third of families in energy poverty use old, energy-guzzling household appliances. Stefan Goemaere witnesses this first-hand in his work as a social worker. He began looking for a solution and inspired by the circular economy concept, his Papillon project was born. In 2020, Stefan is being supported by the Ashoka Impact Programme to scale up and have an even greater impact.
Products as a service to tackle energy poverty
Energy-guzzling appliances lead to high energy bills. For people living in energy poverty, this results in debts they can’t afford to pay. While subsidies do exist to help these households with structural changes, for example, roof insulation, until recently there was nothing in place to address appliances. When Stefan raised this with a lawyer who handles debt for one of these families, he told him, “I can't give you 400 euro to buy a refrigerator for these people because all their old debts need to be paid off first. You’ll never find a solution to this problem, it’s impossible.”
A short while later, he attended a keynote speech organized by the King Baudouin Foundation about the circular economy. What Stefan heard sparked an idea. “Why can’t we combine the circular economy concept and products as a service with tackling energy poverty? Why can’t people in poverty rent energy-saving appliances?” His next question was, “Would it be possible to find a producer crazy enough to say we won’t sell appliances but rent them?” That’s how the Papillon project started. Stefan put that idea on paper, entered a call for projects by the King Baudouin Foundation, and was selected for the first Ashoka Impact Programme in 2014.
Partnering with corporates
“My first Ashoka Impact experience in 2014 was eye-opening and revealed a whole new world. I’m a social worker, I have a social background. I know how to talk to people, help people and comfort people. But I don’t have a background in economics or business. With the support of Ashoka and its partners, I learnt how to speak the language of the corporate world.”
This helped Stefan make his first contacts with commercial partners. He was amazed to discover that manufacturers were actually interested. Bosch saw potential in the idea and agreed to embark on the journey. Stefan started with two different options: the rental model with manufacturers, and a third-party payment scheme. He approached KBC bank to ask whether they could provide 0% interest loans. People would pay them back with the money they saved on their electricity bill. Next, he went to see the Minister of Energy and asked for room to experiment with both of these ideas. A few weeks later, he received the green light for the whole of Flanders.
Having explored the third-party payment scheme, Stefan realized it would be impossible for people living in energy poverty, with bad credit ratings, to take out a 0% interest loan. The rental model offered the most promise. In 2018, he signed a contract with Bosch. Four months later, the first appliances were delivered to people living in energy poverty.
“Today, we have 69 families renting new and refurbished energy-saving appliances via Papillon in different communities and cities across West Flanders and we have plans to scale up with 500 appliances this year. We also continue our house visits to people living in poverty to see how we can help them save energy in other ways. Our focus remains on helping people to get out of poverty in the broadest possible sense.”
Scaling up in 2020 with the support of Ashoka
The 2020 Ashoka Impact Programme helps social entrepreneurs to develop their projects in a way they could never achieve alone. In the case of the Papillon project, it’s about developing a franchise model so that other social organizations in Belgium can use to help customers. Ashoka’s partners, Accenture and ABN-AMRO, provide expert knowledge, coaching and support. They provide extra pairs of eyes on the scaling-up process, so that typical mistakes are avoided, and sustainable solutions are created.
For Stefan, one of the great things about the Programme is that it provides deadlines. “I’m not a businessman, I’m a social worker. You need to think strategically, do your homework, be flexible in your thinking. It’s certainly challenging sometimes. But I know that by September 2020, we need to have a strategy in place for this franchise model. This alone helps us to move forward much faster.”
Change is possible & it can work
“In social work, we often talk about having a harbor you want to reach. It doesn't matter what road you take or how you get there, but you have to reach that harbor. My experience as a social worker and as a social entrepreneur has taught me never to give up. What Ashoka taught me is you never change things by fighting the existing reality. To change things, invent a new model that makes the old model obsolete. That’s what I believe we are doing with the Papillon project. We’re not fighting. We’re working together with corporates and the government to show them that change is possible and, showing them that it can work.”