- Many social enterprises are longer term solutions to what charities have been trying to do for a long time. Although they are often reliant on existing charity/NGO networks for distribution.
- Social enterprises are way ahead of other markets and industries in having women leaders and supporting women across the world through their business models — often using existing groups as sales agents, distribution networks and post purchase customer support.
- People in the developing world want to charge their mobile phone just as much as we do.
- The one billion people without electricity now could have their entire energy infrastructure built from the ground up using solar as the primary source. They wouldn’t have to retro-fit anything. Up for much debate and many in these markets don’t want to have what they see as a ‘2nd class’ solution compared to grid power.
Panel: How can people climb the energy ladder, faster?
Hosted expertly by journalist Dame Jenni Murray — a few thoughts and quotes from the panel:
Patrick Walsh, Founder & CEO of Greenlight Planet
Many people say: “Just copy the mobile phone distribution model!” — doesn’t work for solar as it's an improvement on existing models (ie: kerosene lamps), rather than a complete step change like the mobile phone.
Pay as you go models are going to unlock significant adoption for solar across the world.
“It doesn’t make sense for people living in off grid markets to be buying the same phones and televisions as someone in London,”
Kat Harrison, Associate Director of Impact at Acumen
Solar lights save people money and allow them to spend it on better food, education and agriculture equipment.
Kerosene lamps are hugely polluting and dangerous. Combined, all the kerosene lamps in the world have the same carbon footprint as a European country and represent a significant danger to health and property.
Some are defining the energy ladder as a staircase — it’s more about building foundations and then levels that you can stack on top of one another. We should be looking at how to make some of those steps shallower.
Ajaita Shah, Founder & CEO of Frontier Markets
It’s not that customers aren’t ready for the next thing in solar — it’s easy to demonstrate the benefits of a lantern, and once they start to have confidence in that then they want to move onto the next step.
The big risk for adoption is about knowing where the maintenance costs are going to be.
A learning — Frontier Markets used to say that solar couldn’t power a TV. The customer would then plug their TV in anyway, the system would turn it on for three seconds and then break. The customer then thought that system was dodgy and the supplier was lying to them. Now they don’t say that their solar products can’t power your TV, they explain that it will power a TV for three seconds or a light for 20 hours. The choice is down to the user and customers don’t get suspicious about the technology or think that the supplier is a liar if they do plug it in anyway.
Lais Lona, Business Development Africa at SunFunder
Customers are now coming with better inquiries and knowledge of finance. Structured asset financing is the area of growth for SunFunder and this is demonstrative of the move of many people up the energy ladder.
Andrew Reicher, Business Angel Investor in Energy Access
Investment business is like fashion — there are many passing fads. That being said, the big four pay as you go energy supply companies have raised $200 million in the past year. Probably not a fad!
Micro grids are currently out of fashion — but will likely come back for small businesses especially.
Most important factors:
- Last mile distribution — especially difficult in some communities
- Availability of debt — crucial in allowing the pay as you go models of the new suppliers and others to grow
Panel: Combining grid and off-grid electricity
Again hosted by journalist Dame Jenni Murray, this panel looked to discuss the various benefits and challenges of each approach to sustainable energy solutions in the developing world.
Big progress has been made in creating traditional grid systems in the developing world, but the future looks to be in smaller, individual grids powered directly by solar power. Micro-grids are small scale energy supplies that follow a traditional model of charging the individual per KWh of usage.
Harrison Leaf, SteamaCo
Smart meter and data company that analyses energy consumption and collects payment for energy providers. They became a pure technology provider as they saw the gap in capability for energy suppliers to better understand their customers.
Why does connecting micro grids matter?
$0.25/KWH in the UK and Kenya for cities on the grid
$20/KWH for kerosene lamps
$5 — $15 for solar lamps
$0.50 — $5 for micro grids — starting to compete
Secondly quality — you still can’t connect a water pump using solar.
Sarah Bieber, USAID Power Africa
Obama’s initiative to double power use in Africa by 2030. Aim is for 60 million new connections.
Aiming for 25 million connections off grid, with 35 million on the grid.
2/3 of off grid will come from personal systems, with the rest coming from micro-grids. The reality is that all approaches will need to be used to achieve their targets.
Challenge for them is lack of certainty about how governments and other organisations are going to develop these strategies in the future as without that they are unable to provide certainty to investors.
There’s a role for private and public sector to fund new connections.To scale off grid connections of any kind you need to:
- Convince people it’s a good idea
- Create pay as you go models
- Develop off grid appliances that run on solar panels
- Provide capital to businesses scale
- Address the policy hurdles in these countries
- Banks and vested interests are marginalising off grid solutions so need to better illustrate that it’s a viable solution
Charlie Miller, GOGLA and Power for All
Aim is to build consensus about how to get proper growth and solutions for distributed power in Nigeria, Rwanda, Sierra Leone & Zimbabwe.
Need to define the vision for the future of energy — across houses, small businesses and entire communities.
Many tensions between state-led utilities and on grid approaches against the decentralised individual consumption and supply models we’re seeing come up with solar energy and products.
Reality is that off grid policy and planning is at the moment completely distinct from utility planning in their ministries. To really achieve scale, this needs to happen and serious mind shifts need to take place in order to allow that.
Nico Tyabji, Bloomberg New Energy Finance
Investors, governments, manufacturers etc all want to know what’s happening in the developing energy market and how it’s going to continue to scale. It’s seen as a commercial opportunity.
25 million product sales so far.
Three distinct markets with the most activity:
Small scale solar devices — 5W and offer one or two lamps with phone charging. Majority of the 25 million products sold is in this space with lots of competition and products. Solar home systems — majority of the investment recently due to heavier pricing and ongoing relationship with customers. Paid off fully for the consumer in two years or less. Micro/mini grids — less commercial traction at the moment, with a handful of innovative companies pushing the envelope. Looks most like the traditional grid model, largely backed by government. 10–20 years' time frame for implementation if ever.
Again, more needed from governments to understand how they’re going to push forward development, in order to achieve investment.
The full version of James' blog was first published here. Thanks James for an awesome write-up!