Results-based Financing for Clean Energy Access: Lessons from a Randomized Controlled Trial in Rural India

“Voices of the Village” a collaboration between Dharma Life, Siriti and the Wheeler Institute for Business Development

The Voice of the Village is a series of conversations on issues that affect those living in rural communities in India – inviting a wide breadth of stakeholders to collaborate and build solutions together. The session focused on a results-based financing clean energy study involving:

  • Rajesh Chandy, Professor of Marketing and Academic Co-Director of the Wheeler Institute for Business and Development at London Business School
  • Gaurav Mehta, Founder & CEO of Dharma Life
  • Vainateya Gavai, Co-Founder of Siriti
  • Stephanie Jones, Global Programme Manager at Good Energies Foundation
  • Marije Schasfoort, Programme Manager at DOEN Foundation
  • Manuel Meister, Managing Director at Accenture
  • Asha Sharma, Dharma Life Entrepreneur
  • Renu Sharma, Dharma Life Entrepreneur
  • Geeta Singh, Dharma Life Entrepreneur

“Despite multiple efforts, this problem has not been addressed”: The clean energy problem and structuring solutions

Access to clean energy is a well-documented challenge in India, with roughly 500,000 deaths per year from indoor air pollution caused by open-fire cooking and kerosene lanterns. While health-improving products exist, there has been low uptake due to a lack of awareness and low availability, exacerbated by limited distribution reach and affordability. Despite governments, corporates and foundations being committed to solving the issue, identifying and implementing solutions that have impact at scale remains a major challenge.

“The challenge therefore is how do you target better, how do you verify your results and how do you pool your resources to have maximum impact” – Gaurav Mehta

In order to address this challenge, Dharma Life conducted a pilot study to test the solution of “pump priming” markets through marketing interventions led by local village-level women entrepreneurs, called the Dharma Life Entrepreneurs (DLEs). The DLEs were enlisted to promote the clean energy products through targeted marketing campaigns which were paid for through results-based financing instruments. The study was supported by Good Energies Foundation, DOEN Foundation, elea Foundation and the International Finance Corporation (IFC). Results-based financing links development funding to pre-agreed and verified results, whereby most of the funding is only provided after the agreed-upon results are achieved and verified. It can be used as a tool to improve the effectiveness of development programs and aid. This pilot serves as a blueprint and proof of concept for rolling out this solution at scale.

The design of the pilot study

The study examined the concept of pump priming through a randomized controlled trial involving 25,200 households in 240 rural villages in Uttar Pradesh, India. It specifically examines the impact of two direct marketing approaches that are particularly salient to such contexts and compare them to the traditional approach of selling through retail shops:

a) Community pull: marketing efforts that seek to influence purchase and use behaviour among consumers through activities and events that draw large groups from the community (e.g., community rallies).

b) Consumer push: marketing efforts that incentivize and support the targeting of specific segments of consumers to purchase and use products from new categories, with the expectation that these consumers will in turn influence others.

For the randomised control trial, villages were randomly assign to either be treated with

  1. Consumer Push only
  2. Community Pull only
  3. Consumer Push and Community Pull
  4. Control group (no marketing intervention – existing retailers continuing business as usual)

The study was designed with three main features:

Design Feature 1: Objectivity

Validation was supported through machine learning algorithms where the machine matched the household with mobile OTP confirmation with the customer photo ID and the invoice to the same customer with the solar light. The machine simultaneously validated that the photo’s GPS location was within the geofence of the customer location thus ensuring the validity of the consumer.

Design Feature 2: Precision

Smart targeting was embedded in the design for maximum social impact, with the DLEs focusing on customer segments using kerosene lights and those in the low-income segment. Here again the technology-enabled verification process allowed Dharma Life to track the social impact. In particular for data validation of the social impact results, a machine learning based image classification survey was used of pre and post images for the effected households in the study.

Design Feature 3: Verifiability

The validation checks were published on a distributed ledger on Ethereum so the results could be reviewed and verified by funders as needed. This key feature helped to address the issue of trusted results that can often be at the heart of other results-based financing projects.

A key element of the study was the verification, supported by expertise from Accenture, that leveraged machine learning through computer vision, image recognition, geolocation and timestamp validation with the results published to a blockchain ledger powered by Ethereum. Manual Meister, Managing Director at Accenture explained, “we thought about what technologies would support this process best with ease of use, transparency, low cost and most importantly to create trust. We designed starting with verification using machine learning algorithms and then implementing the blockchain process which took the verified record based and puts it into a smart based Ethereum contract. It really creates a process that is based on trust, that is easy to use, and is scalable and flexible, not only for Dharma Life but for other organizations, other products, other services”

“Testing the technology applications for verifying impact”: Research results of the study

The results shared on the roundtable were promising. The study looked for multiplier effects across channels, brands and segments – the presence of which is an important indicator of effective market seeding. There was a 10-16x increase in solar lights sold in the treatment groups vs control, with both the pull, push and combination push and pull marketing campaigns achieving effective results. The study showed an increase in penetration of solar light usage at the village level, up to 14% from 7%. The study also showed brand impact with quality-assured brands such as d.light and sun king increasing penetration while still achieving the overall market growth despite substitution from other brands to these quality products. Furthermore, there was an important channel multiplier effect whereby 3.3x solar lights were sold in other channels (i.e. traditional retail) versus direct DLE sales. Professor Chandy explained, “what this intervention does by highlighting the multiplier effects for other brands, is important because we can show social returns beyond the direct marketing impact.” The health and climate impact also highlighted that the marketing campaigns effectively targeted and most significantly replaced the polluting energy sources. The marketing campaigns also showed a positive social impact where the affected customer households were primarily below the poverty line, part of the results of the smart targeting design feature.

At the heart of the study: the Dharma Life Entrepreneurs

The results of the study would not have been achieved without the support of the Dharma Life Entrepreneurs. As Stephanie Jones explained, thousands of local entrepreneurs are embedded in their communities with the close relationships and deep understanding of their customer needs and aspirations that are best situated to understand which marketing approaches and other resources will help us achieve the most impact and best outcomes for Dharma Life’s customers.” Three of the Dharma Life Entrepreneurs, Geeta Singh, Renu Sharma and Asha Sharma, spoke about their experiences with Dharma Life and the Clean Energy project.

Geeta Singh, who lives with her husband and three daughters in Uttar Pradesh, started with Dharma Life 5 years ago, working on various projects, previously educating students on solar light and clean energy. Her intervention focus of increasing awareness, explaining the advantages and leveraging direct sales through home visits, drove adoption.

Renu Sharma, wife and mother of three, who connected with Dharma Life after finishing her college degree, has worked on several different projects including clean energy focused initiatives. She spoke about some of the experiential marketing interventions including conducting “Lights, Camera, Action a show put on by local students in which I explained the lights to parents who attended the event, and 5 bought at the event and I also did house visits afterwards to sell more.”

Asha Sharma, living with a large extended family including her husband, children, brother and sister-in-law as well as their children, partnered with the IFC interventions whereby “the IFC van came outside the village, demonstrated the solar lights and told the villagers about the benefits and features of the product. I visited houses and got leads to sell solar lights, [telling] them about the features.” Asha positioned the product against other options in the market, highlighting quality, cost and safety to drive successful adoption, telling families, “Chargeable lights have additional expenses but for solar light there is no additional expense, no expense on electricity and they charge for free in the sun.”

“The need to go faster and reach more scale is evident”: Broader impact of the study

The results of the study have wider and longer reaching impacts for small scale clean energy projects and results-based financing. Round table contributors Marije Schasfoort and Stephanie Jones spoke about the importance of this pilot study and the proof of concept for drawing larger resource pools together. Marije was excited about the future funding implications commenting, “there is the potential to unlock new pools of funding based on RBF outcomes, seeing it as an ecosystem intervention to find new ways of financing solutions.” Often philanthropic foundations that focus on small scale, entrepreneurial interventions have a higher risk tolerance and can afford to invest in projects like Dharma Life Clean Energy Access trial, however in order to draw larger investments from stakeholders with lower risk tolerances and return on investment concerns there needs to be a lower cost, reliable way to verify results. As Stephanie said, “the proof of concept demonstrated in this first phase should lay the groundwork for a larger program, which should draw more funding but also provide additional sustainable solutions to communities across India from larger solar products to income generating appliances to other opportunities. Both the interventions tested and low-cost validation methods will be key elements for a greatly expanded RBF facility for Dharma Life and possibly serve as a model for others.”

Stephanie, Marije and Manuel all spoke of some of the advantages of a tech-enabled RBF facility like this and how others might be able to make use of a similar facility in the future. Touching on the benefit of being able to pool resources, Stephanie described“one of the biggest barriers to funneling investment into decentralized renewables including small-scale lanterns is the high cost of operations, marketing, verifying and tracking that any intervention has been done is so high that it quickly outweighs the cost of the product. So we have a number of partners who are trying to pool multiple interventions into something that mirrors a large investment” Marije added that “It’s still really difficult to find trust and patient capital and find other funders at this early stage. With these outcomes Dharma Life, and others, will be able to attract other types of funders and pool them together. Especially with the shift to project-based financing with focus on outcomes first, and guarantees.”

The low-cost advantage not only for the current pilot study but for subsequent studies is clear as well as the implication for speed of delivery, “[with]a reduction of cost and specifically a reduction of time, the whole process is much shorter when supported by technology. You can think in the future of having mini-transactions. Right now, you have to wait and audit the whole thing but why not as soon as there is a new record on the blockchain there is a couple dollars or cents flowing.” As Manuel explained, these advantages are not limited to Dharma Life projects alone, “you need pictures that are taken in the environment in order to train the machine and teach the engine. Dharma Life is building a huge database of images that can be extremely valuable and can kickstart anyone who wants to rely on this database in the future.”

“Early-stage investments yielding future investments”: Taking the results forward

Dharma Life plans to continue to leverage learnings from the study to achieve scalability for clean energy and other causes. They will apply the same logic to clean cooking and productive use assets and hope to scale up to other causes including health and livelihood. There will be another session and roundtable regarding how the RBF facility has been structured and further information regarding the results of the study, and a more detailed discussion of the detailed findings will be held after the findings are published in the public domain following an academic conference.

“Results-based Financing for Clean Energy Access: Lessons from a Randomized Controlled Trial in Rural India” was the fifth in a series of round table events hosted as part of the Voice of the Village Events series. Further roundtables are planned for later this year.

Dharma Life Labs welcomes the support and ideas of individuals and organisations, as well as the opportunity to collaborate with others. Sharing insights and solutions and learning from one another can bring about real change at scale. The Voice of the Village roundtables are open to anyone interested and more information can be found at or by emailing

The Wheeler Institute, individual faculty and PhD students at London Business School, have been working with Dharma Life for nearly 10 years, almost since the inception of the organisation. The Wheeler Institute collaboration with Dharma Life, thanks to Gaurav Mehta (MBA2010) the founder and many others at Dharma Life, covers all three pillars of the Wheeler Institute: conducting rigorous research, forging communities of practice and shaping business education.

Margaret Wieland (MBA 2022) has a background in corporate finance, with 6+ years of experience in audit, controllership and financial analysis roles. Prior to London Business School she was based in Shanghai, China leading revenue accounting teams in the region for a large multinational. Margaret is an intern for the Wheeler Institute, contributing to the creation of content that amplifies the role of business in improving lives. 

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