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World Changing Ideas

In Off-Grid Regions, Cheap Solar Kits Could Spread As Quickly As Mobile Phones

East Africa is exploding with pay-as-you-go solar electricity that takes advantage of the country's mobile payments infrastructure.

  • <p>It's easy to get a cheap solar panel in Uganda.</p>
  • <p>You just pay a small deposit via a mobile phone and you can take home the equipment immediately.</p>
  • <p>You install the system yourself and pay off the lease as if you were buying pay-as-you-go phone credit.</p>
  • <p>This simplicity explains why San Francisco-based Fenix International has signed up 65,000 customers for its ReadySet battery and PV system in three years.</p>
  • <p>By partnering with the country's leading phone operator, MTN, it's able to piggyback on a mature mobile payments system and agent network.</p>
  • 01 /05

    It's easy to get a cheap solar panel in Uganda.

  • 02 /05

    You just pay a small deposit via a mobile phone and you can take home the equipment immediately.

  • 03 /05

    You install the system yourself and pay off the lease as if you were buying pay-as-you-go phone credit.

  • 04 /05

    This simplicity explains why San Francisco-based Fenix International has signed up 65,000 customers for its ReadySet battery and PV system in three years.

  • 05 /05

    By partnering with the country's leading phone operator, MTN, it's able to piggyback on a mature mobile payments system and agent network.

It's easy to get a cheap solar panel in Uganda. You just pay a small deposit via a mobile phone and you can take home the equipment immediately. You install the system yourself and pay off the lease as if you were buying pay-as-you-go phone credit.

This simplicity explains why San Francisco-based Fenix International has signed up 65,000 customers for its ReadySet battery and PV system in three years. By partnering with the country's leading phone operator, MTN, it's able to piggyback on a mature mobile payments system and agent network and take the mystery out of both solar and leasing.

"The same place our customers used to buy kerosene, there is an agent where they can put money into their phone wallet and pay Fenix," says CEO Lyndsay Handler. "What's enabled us to be profitable is the the growth of mobile money in general. Africa has leapfrogged the U.S. in that I can pay for a wide range of services just over my phone."

About 85% of Uganda's 38 million people lack access to grid electricity, and most use kerosene lamps for lighting. Fenix is one of several startups offering cheap solar alternatives in East Africa, taking advantage of an efficient mobile payments infrastructure as they do it. Others include M-Kopa in Kenya, Off Grid Electric in Tanzania, and Mobisol in Rwanda.

"We really feel pay-as-you-go energy is on a similar trajectory as the mobile phone and that, over time, the cost of these products will come down and our ability to scale will increase," Handler says. "Our target is 10% of the off-grid market. We want to reach 1 million households by 2020."

To sign up for Fenix, customers call in and answer a survey that assesses their ability to repay. Usually, customer service reps need to explain the financial commitment as most customers have no experience with banking services or leases. Fenix often starts customers with small systems: a panel, battery, and two lights. "We don't want to be like most banks and reject them. We want to bring them onto the ladder, build them a credit score, and get them where they want to be," Handler says.

Customers pay for as much or as little power as they want: from one day to 99 days. Each payment generates a code that they enter into the system at home. Handler says more than half of new customers come from referrals, which is in line with other solar markets (there's a marked keeping-up-with-the-Joneses effect to rooftop PV).

Fenix was founded by Mike Lin and Brian Warshawsky. Handler, who's from Lake Placid, New York, joined in 2011 and now lives in Uganda.

"Every day, millions of people spend 15 to 30 cents on kerosene to light their homes," she says. "It's very low-quality light so it's really powerful if you can bring new technology that's better quality and you have the same daily price point. The potential here is huge."

All Photos: via Fenix Solar

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