Aid is dead – a response to Skypower’s plans

Here at SolarAid we don’t believe in aid, we don’t believe that the quickest way to fix a problem is always the best. Instead we believe in kick starting markets, we believe in setting up roots in local communities and we believe in creating opportunities through enterprise.

Which is why we’re very concerned that solar super-giant Skypower is donating two million solar home kits to Kenyan families.

The Kenyan market is growing rapidly with awareness, availability and affordability of solar lights already outstripping predictions. A grant of this magnitude would seriously destabilise this fledgling and volatile market, permanently damaging the fortunes of enterprises operating in the region and jeopardising the perception of solar indefinitely.

Our ideas aren’t just based on supposition, but rather hard evidence and experience working in frontier markets for the last six years. Here’s a brief summary of the main arguments against using traditional aid.

Sustainability – Like all things on the planet, solar lights have a life cycle. If you give a load of lights away what happens when they eventually stop working? There’s nowhere around to buy a new one, or even upgrade to a bigger one once you’ve saved up enough money. By creating a flourishing market customers will not only benefit from after sales care but will be able to purchase more lights whenever they want. It will mean that local entrepreneurs can take advantage of this new market and sell lights to their community, stimulating the local economy and creating wealth.
Behaviour change – Our research shows that people who invest in a solar light are more likely to get the most out of it. 80% of our customers spent less on lighting as a result of their solar purchase and 70% stopped using kerosene altogether. That’s because time and effort goes into educating and instilling trust in these unique little lights. By contrast, handing someone a new and unfamiliar technology and packing them on their way is never likely to ensure they make the most of their new piece of kit.

A SunnyMoney sales agent talks to local community members about the benefits of solar lights at a school in Bomet County, Kenya.

Dignity and choice – The old donor/beneficiary model needs a facelift. Gone are the days of Band Aid and poor helpless African children relying on the generosity and nobility of an armchair philanthropist to survive. Africa is a continent of opportunity and new possibilities which is why we’re in the business of correcting market failures, not airlifting aid. A family that saves up and invests in their own light has a say in what’s happening; they control the market and we bow to their needs. They have consumer rights, a warranty, and a say in the types of products they invest in. Who’s to say they want a yellow light and not a red one? Is choice and style something only afforded to economically developed countries? It certainly shouldn’t be.
Quality control – This mass hand-out could actually do some real long-term damage to the market. Will there be any quality control on the products offered? Will there be any after sales care? What if the lights aren’t any good? What if people don’t like them? Trust in solar lights will be destroyed and may take years to rebuild. By contrast SunnyMoney only sells Lighting Africa approved products that have been vigorously tested for the rigours of rural African life.
Scale, pure and simple – If you give 1000 solar lights away that is where your impact ends. Yet if you sell those lights, the revenue you generate can be recycled back into buying more lights and so on and so on until you’ve distributed 100,000 or even a million. Skypower could have a far bigger impact by donating those lights to an organisation who would sell them in the right way, at a fair price.

The Global Off-Grid Lighting Association hit the nail on the head in their recent opinion brief when they said “Systematic reductions on retail prices, and especially free give-aways, signal to consumers that they do not need to pay full retail price — or pay at all — for these goods, and consumers will accordingly hold out for reduced-cost or free goods in the future, regardless of whether they will ever come. While there may be a short term benefit for selected users, these reductions or give-aways will result in such adoption being less likely to be sustained and broader adoption of solar off-grid lighting being significantly hampered.”

Skypower’s huge grant comes as part of their $2.2 billion dollar agreement with the Kenyan government to deliver 1 GW of solar projects. While this is undoubtedly a positive step we are urging Skypower to rethink their plans to donate two million home kits. It will undoubtedly destabilise a very promising market, damaging the prospects of many solar enterprises and potentially ruining trust in the technology.

These are not just SolarAid’s thoughts, but instead embodies a prevailing belief amongst NGOs, governments, agencies and foundations. The Acumen Fund expressed it best when they said“This is what it takes to solve the toughest problems of poverty: robust solutions whose long-term viability.. [has] deep, lasting support from local teams, local capital, and, most importantly, millions of local customers. This approach can take longer to execute, but it’s the only one that lasts.”

We are urging Skypower to rethink its plans. We suggest that the two illion home kits are instead donated to an enterprise to sell on your behalf – making it far likelier to result in positive behaviour change and leave a vibrant long-term energy market in its wake.