2012-09-26

Powering Solar Energy In Africa With Pay-As-You-Go

To cover the cost of prohibitively expensive solar installations in Africa, a startup called Angaza is introducing solar power that works the same way as mobile phone minutes.

It’s a familiar problem in the developing world: In places where grid power isn’t easily accessible, many people rely on toxic kerosene-fuel-based lanterns to provide light in the evening. The most practical solution, as so many nonprofits and sustainability-minded organizations have shouted from the rooftops for years, is to make solar power systems available in these off-the-grid areas.

The issue with that, however, is that solar power systems can be too expensive for people in these poor, rural areas to afford. There are a handful of solutions being tested, including solar microgrids and programs that allow entrepreneurial residents to buy the systems and then sell power to neighbors.

Angaza, a recently crowned Tech Awards Laureate, has a different idea: ask users for a small upfront fee ($10) to buy a solar power unit, with small amounts paid weekly for 12 months after that in order to cover the cost.

Originally, the startup planned on selling its SoLite three-watt home solar system--a portable LED light and solar panel combination that can light up a whole room--in Africa for an upfront cost of $50 to $60. But they weren’t able to sell the systems quickly enough--hence the pay as you go model. "Families in east Africa don’t have large sums of money to purchase products at one time even though the payback is great," explains Lesley Silverthorn Marincola, CEO of Angaza.

The key to the pay as you go model is a series of hardware modifications within the light that connects it to the local cellular network as well as mobile money platforms--that way, customers can easily pay via services like M-Pesa. A cloud-based energy management platform regulates activity. "It’s like how pre-paid cell phones work, where you buy a phone and prepaid minutes. Here, you buy a physical kit, but in order to make the light function you have to buy energy credits," says Marincola.

Angaza just launched its pay as you go product in May, so the sales volume is still low. But the company is working on a "large scale impact survey with local entrepreneurs using the product in Tanzania," says Marincola. The service also has distribution partners to help with sales in east Africa.

As for the Tech Awards funding? Angaza will receive either $75,000 or $25,000 (they will find out in November), which will go towards scaling up production.

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6 Comments

  • Eveline de Wal

    I like the introduction of solar devices in Africa, even though there might be many around it is still a more sustainable solution than kerosine lamps. I also like the idea of pay as you go. To make this business proposition even more sustainable or 'green', you could also consider 'leasing' the solar power units. In the sense that you do not make people buy the device, but only let them pay for light hours that you provide. This will stimulate you to design your device in the most sustainable way (as the costs are yours when it breaks down) and you let users of the device only pay for the actual light they use - a social impact, to make light available also to people who have less finances. It seems to overlap in a nice way with your 'pre-paid model' - of buying lighting minutes.

  • Kyle

    I will try to make this short...

    Can you tell me how many solar lighting devices there are in East Africa alone?  Or can you tell me what the weather is like in Kenya as of September 2012?  Probably not.  Now think about how many times an article has been written about a new innovative solar or lighting device launching in East Africa.  The truth is, there are nearly 60 individual lighting (solar) devices in East Africa and guess what...the climate change is affecting Kenya too.  Cloudy days are more prevalent and not one solar company is meeting their metrics.  This is a problem.  Kenya is becoming nothing more than a place to actually lift people out of Light Poverty, but a new tech hub for get rich/awards quick schemes.

    There is nothing revolutionary nor beneficial to the local climate about this invention.  The only remotely interesting nugget of information I pulled from this article was the pay-as-you-go model-which in case you didn't know, has already been in motion for quite a few years now. 

    My point, how about we stop writing articles about these so-called test my PhD technology so I can win a few awards on people and really focus in on what it will actually take to eliminate Light Poverty. 

    socially-conscious humanitarian

     

  • Acd

    Hi Kyle,

    While I do agree that there is nothing revolutionary about this, I do think there are benefits. I would argue that shifting from kerosene lanterns to solar lanterns does eliminate CO2 emissions (on top of creating health benefits) so they do play a small role in combatting climate change.
    I'm not saying that this solution is perfect-- I do have the concern that some of the solar products that floods both East and West African markets are of poor quality, break down within a year and then end up as trash and reducing consumer confidence in solar products. 
    My question for you is: What would solutions would you instead suggest to eliminate light poverty in Kenya?

  • The

    How does this work exactly? "Here, you buy a physical kit, but in order to make the light function you have to buy energy credits"
    How does this work with these energy credits?

  • Maurice Ehrlich

    A wonderful humanitarian project......success is eminent because it is such a justified project....We are watching and wishing success for Angazi and it's customer base.....Maurice and Bobbie Ehrlich