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Is pay-as-you-go solar set to transform energy access?

Vincenzo and team

Our social enterprise SunnyMoney is the largest distributor of solar lights in Africa, focussing solely on pico solar products. A pico-solar light is a compact portable device that uses a photovoltaic panel to produce up to 10 watts of power. Combined with advanced batteries and LED bulbs they are able to produce hours of bright light from a single day’s charge

Solar lights represent a compelling alternative to kerosene, candles, or battery-powered torches in rural communities that lack access to a reliable energy grid. Neither SolarAid norSunnyMoney manufacture solar lights; we are completely product neutral. Our focus is instead on overcoming the challenges of last-mile distribution, ensuring energy access for even the remotest of rural villages

Their involvement is crucial to building trust in solar technology 

 

Our model involves working closely with education authorities to raise awareness of solar lights through teachers. Their involvement is crucial to building trust in solar technology which will then stimulate demand in local communities. It is this community-based model that has enabled us to sell over onemillion solar lights.

Yet in the communities where we work across Tanzania, Malawi, Kenya and Zambia we would rarely have higher than a 10-15% uptake rate in any one school community. This tells us that there are still many barriers to people purchasing a solar light. One of these key barriers is affordability.

This is where SunnyMoney Brains (SMB) comes in. SMB is the innovations department of SunnyMoney. They are focused on developing, selecting and testing innovative products and business solutions that can bring down the barriers to the adoption of solar products. This work is incredibly important if we are to extend modern energy access to low income rural families in Africa.

One of our most recent and exciting projects is the Pay-As-You-Go (PAYG) solar light. We are currently working in partnership with technology providers to test and pilot this product, which we’re hoping will blow the energy market for base of the pyramidcustomers wide open.

They can pay it off in small weekly instalments that are similar, or less than, their usual weekly expenditure on kerosene 

 

The idea behind this is that families don’t need to pay the full up front cost of a solar light in one go. They can pay it off in small weekly instalments that are similar, or less than, their usual weekly expenditure on kerosene. Therefore, PAYG allows the customer to purchase a high quality solar product in a way that mimics usual expenditure kerosene expenditure.

PAYG is not new to the solar market but the technology has mostly been used with larger solar home systems, at prices that are beyond the reach of the majority of our customer base – 90% of our customers live below the poverty line. At SMB, we use SunnyMoney’s experience and increasing knowledge of the market to develop and distribute products that reach a customer-based balance between the features of the product and the cost constraints imposed by the market segment (low income rural families who are hearing of solar energy for the first time).

One of SMB’s main collaborations is with diviPower, a Fort Collins-based technology company that has recently launched diviLite, an innovative entry-level PAYG solar light. The diviLite PAYG system has the same functionalities of a standard entry-level solar light but it also includes an embedded Bluetooth chip. This enables it to be wirelessly connected to a mobile phone and activated when a cash or mobile-money payment is made.

After a few affordable weekly payments the product is permanently enabled 

 

When a diviLite is purchased it will have one week of light credit included. After that week it will be locked and not useable until the weekly payment has been made. We are piloting both cash payments (with activation via a smartphone carried by the Head Teacher), as well as an innovative solution allowing mobile-payments (through M-Pesa) which includes automatic activation of the product. After a few affordable weekly payments the product is permanently enabled and the customer becomes the owner of the solar lantern and can now enjoy years of free, clean and safe light.

With this work we are expecting to dramatically extend modernenergy access to off-grid rural populations by increasing theaffordability and therefore more than doubling the uptake of high quality solar products.

Another important focus of the current market tests is refining the product features and improving the marketing and training materials that accompany the solar lights to ensure the number of products that become fully paid off is higher than 90-95%.

Both product and service innovation are a vital component in making this technology affordable and appropriate for the people we are aiming to serve in rural Africa. We need to be open to testing products in this challenging market, if we are unable to adapt to our customers’ needs then we will have little success helping families switch to solar.

We have a high level of accountability and we need to make sure we are both innovative and flexible 

 

If we want to improve market penetration, and ultimately sell enough lights to completely eradicate the kerosene lamp, then we need to be able to react to market demands. We have a high level of accountability and we need to make sure we are both innovative and flexible. Our Sunnymoney Brains unit is one way of ensuring we are just that.