SMART ‘SOLARIZATION’ IN HEALTH SECTOR

Dr. A.K. Wazir

The relationship between health and energy is compelling. The World Health Organization (WHO) states that “Health and energy are interdependent factors which largely determine the development. WHO believes solar energy can play an important role in improving health energy infrastructure if integrated with a broader array of end uses.” Smart ‘solarization’ i.e. planned and smart decision making on the investments allows greater use of the sustainable energy in developing world/ regions. Clearly the regions in Asia and Middle East can benefit the most from this natural source of energy. The model presented here is to help the decision makers and planners to find out ‘right resources for right needs’ by using this technology in health sector.

THE NEED ASSESSMENT

It is a fact that the need for energy is not going to lose its charm any time soon. On the contrary the more starved developing world is going to be further entangled in a vicious circle. Less energy, decreasing industrial and economic growth, increased poverty, crime and corruption will all play a comfortable Ping-Pong leaving communities and people to agitate and riot. We must connect these dots with the priorities of the governments and affiliates. The public sector spending trend of our governments on the social sector and health is a reflection of lack of understanding of the needs of our communities. The challenges are many but the opportunities are also exciting and unexplored.

Solar Photovoltaic (PV) technology for health sector as an alternate energy source can bring many advantages. It can help as a source of energy for maintaining connectivity, lighting, refrigeration of the products and comfortable working environment. It would work most effectively in the areas where grid energy supply is unreliable, interrupted by long outages and at many places not available at all. However when you are out of food, buying crockery with the available money will not be a prudent decision. It is therefore a challenge to our public sector planners to spend the meager amount available in the name of development and think how to smartly use the money for innovative ideas.

Solar PV technology has enormous potential in private sector and it has not been exploited to its maximum in Pakistan and other regional countries. It is important to take into account that the private sector in health includes not only the donors and partners but also the private health care providers (hospitals, diagnostic units, pharmaceutical manufacturing units etc.).

Public Sector needs and objectives

Health sector is probably the only sector where several technologies can be exploited in favor of communities. The leverage of exploiting the solar PV technology in health sector in favor of communities depends upon clear demonstration of its need and prioritization. The need assessment for PV technology in public sector health will require primacy for public service. It should demonstrate how it can enhance its reach to the public and hence the priority will be to devolve the services and units to farther areas and population. Prioritizing need assessment in the public sector is essential to make the right resources available for the right objectives. Before going into the prioritizing exercise it is important to share some of the objectives that may be common to the public sector in most parts of the developing world.

Objectives:

• Access should not be defined only in terms like ‘out-of-reach’ or ‘harder-to-reach’ because of distances or geography but financial and informative inaccessibility should also be included.
• Criticality of the need must demonstrate the associated morbidity or mortality.
• Quality services/ products (essential) clearly will answer how the quality suffers in the absence of the intervention and the direct impact of the lack of quality upon the morbidity and mortality of the communities.
• Quality services/ products (support) should be directly linked to the employees/ users satisfaction which is indirectly linked to maintaining quality of the essential services / products.
• Cost saving here is only against the tangible financial allocations in the budgets. So in case of the solar energy support the cost saved on the electricity bills may be the objective and as one of the output indicator.
• Energy conservation while there is nothing more important to conserve than life itself. The technical intervention can allow other sectors to use more of the meager energy available. Solar PV technology in health sector should clearly demonstrate the conventional energy saved.
• Sustainability should address the financial one however the environmental sustainability statement is also important outcome of the technology and a strong advocacy tool to invite more investments.

Private Sector needs and objectives

It is pertinent here to differentiate that the following objectives are for commercial/ for-profit private sector investors to consider. The private sector (Donors or non-governmental entities) operating on not-for-profit may consider the above public sector objectives or a mix of the two- public and private sectors. Unlike the public sector the private investor may have different objectives. Private investor will be allured more by the kind and scale of returns expected from investments in the ‘solarization’ of health sector.

At this stage the initial capital investments are very high in the technology and longer term investment strategies are questioned by unpredictable socio-politico-economic conditions of the developing world and Pakistan. However smart investments might allow some to rethink the approach. It may encourage building business model around some units that yield premium returns and units that are saturated or do not show further growth by factors like input costs of energy that is unreliable and interrupted. Moreover the cost competitiveness may factor in for smartly selected units (e.g. a diagnostic unit) and especially those that are demanded for more hours in a day but limited by outages or interruption of electricity. Likewise the cost comparison between the energy supplied by fuel-based generators and the PV energy may also tilt some decisions towards smart business decisions to adopt the solar technology. However some of the objectives according to the needs and requirements in the private sector are:

Growth may be considered for the services and units where it is stunted by limited hours of energy supply or higher costs of other alternate power inputs like fuel-based generators. The growth prospects are without any doubts for any unit/ service if the long term investments are considered.

• Return on Investments (RoI) in the solar PV technology products is great. These are usually available with 30 to 50 of efficient life years. Most of them return their capital cost within their initial 40% of efficient life years (within 20 years).
• Quality services/ products may be a primary consideration for say a production unit of a pharmaceutical or sterilization unit of a hospital or refrigeration of a cold chain infrastructure or even chillers for a computer server room etc.
• Accreditation on the environment based certifications or part of the ISO and other hospital accreditation regimen that allow enhance acceptability and market access.
• Acknowledgement dividends of branding and increased brand equity and may be an objective for greater advocacy and promotion of services and units.

Need Assessment Score Card

The plan for investment by public and private sector require very tangible assessment. It is also important to identify the right needs for appropriate resource allocation. The score card is helpful to identify and prioritize the objectives.

Key to the Score Card

• Listing of Objectives according to the priority. Objectivenumber1 being of the highest priority
• Score 1-10; 1 being the least consistent with the need
• Less than 85% of total score should not qualify the need

THE RESOURCE ALLOCATION

The resource allocation involves intense evaluation of economic viability of the solar PV technology for a unit or service. The preferred method of evaluating the economics of photovoltaic systems is to compare life cycle costs of the photovoltaic system. Such evaluation should address:

The life cycle cost

• The payback period
• The rate of return

The resource allocations for the identified objectives require a division of 30/70. That is 30% of the top priority objectives should be allocated 70% of the resources and likewise 70% of the lower priority objectives should receive 30% resources. It also means that the units/ services or part of these units or services that promise to achieve the top 30% of the objectives will receive 70% of resources and only 30% will go towards the achievement of lower 70% needs/ objectives.

The benefits of the solar PV technology in health care may outweigh the risks for the investments if mix of business-like and long term sustainability approaches is applied, if opportunities are created not only for public-private but also for private-private partnerships and larger alliances at regional level are built to make the technology more accessible.

Dr. Ahsanullah Khan.

lubazad@hotmail.com

News Desk

Economic Affairs Editor