Oolu (YC S15) Is Bringing Solar Energy to West Africa’s Off-Grid Population
techcrunch.com
techcrunch.com
Maybe smaller solar installations like this would work out better than larges ones.
What are you going to do if someone doesn't pay up, are you going to take their solar lamps away from them?
Not sure if this falls under social entrepreneurship or is anticipated to be a good business model, but does seem like it's both viable and has potentially vast and traditionally underserved market.
"Instead, the company’s true feat is setting up a distribution model and payment infrastructure that West African families and community leaders are comfortable with."
A distribution model that goes through community leaders has built-in trust. If someone steals the hardware, it will be known inside the community.
In contrast, a $50 million plant being built by foreigners may seem to the locals as yet another isolated project by the colonialists, and therefore a free target for stealing.
I'm not saying your company would act against the local community -- but the locals may not see it that way. To them, a huge foreigner-built project is an extension of what they've seen happen in West Africa ever since the French showed up in the 19th century and started building railroads for their own use.
My guy says that decentralized power generation will flourish in the developing world the same way that mobile phones have.
The extremely simplistic story is this: connecting to the power grid often costs a few hundred dollars at least, $300 or $400 is common, while annual income is about $1k. Important to note here is that when you have to pay ALL expenses (housing, food, education, healthcare etc) on less than $100 per month, your discretionary income is close to 0, so having to spend 40% of your annual bill to get connected to the grid is a gigantic deal, and can't be compared to spending 40% of say a $50k salary, because $30k of that is discretionary and non-essential for subsistence.
Alright so the grid is there, connecting is expensive, and African nations don't have the rapid economic growth, cheap credit lines or reserve currency status to subsidise it much (like say the US when it connected its rural areas to the grid). And that's a real shame, Kenya's grids aren't great (as few are, on this planet), but there's some real gems here and there. Like Kenya's 1/3rd of electricity coming from hydro, and another 1/3rd coming from geothermal, roughly. Interesting stuff!
Anyway so what happens is that most people have no electricity, do not run e.g. a fridge, but do run small appliances like mobile phones and get them charged in the city. The big expense is lighting, and it's mostly candle or kerosene based.
So for the extremely simple numbers: a kerosine lamp uses about 0.025 - 0.030 litres of fuel per hour, and a litre costs about 60 cents. So running a lamp for an hour is about 1.5 cent. And it generates about 40 lumens or so of light, I mean it really depends but this would be a pretty typical lamp. So you can get with a standard LED easily 80 lumens per watt, so you could essentially get the same light as a kerosene lamp with half a watt. Considering a 15c per kwh price, an hour of powering not one, but two kerosene equivalent LED lightbulbs is two orders of magnitude (100x) cheaper than the 1.5c, as it costs just 0.015c.
Now obviously there's upfront cost in the solar panel, the lightbulb, the battery, and there are per-hour costs too (as bulbs have a lifespan in hours, and batteries in cycles, and panels in years), but the upfront costs are covered fairly quickly (after all you don't need an expensive panel to power a 1 watt lightbulb), the bulb does cost like $10 but here's the thing, lower income households routinely spend $100 or $150 or sometimes more on kerosene per year.
What I don't entirely get is why such a 'decentralised utility company' is necessary. They offer solar as a service essentially, replace batteries, do the 'installation'. But really it's not a solar installation that's necessary, it's just a solar lamp. I don't fully see why there isn't a market for those that has completely replaced kerosene and solved the issue of lighting. Of course solving energy as a whole is a much bigger deal (to move forward you need a connection to the grid, even if it's a local decentralised grid, to run a fridge or tv or business tools etc, outside of the big cities, too). But really, solar lamps are low-tech, no installation required, you buy em and they work. Anyway no disrespect to the company, I'm just wondering why the situation is such that it didn't happen long ago already without any companies other than some wholesalers importing decent solar lamps and flooding the market. These things cost $18. I mean, the financialisation aspect is nice if discretionary income is low, they pay a monthly bill instead of pay $25 upfront, but still $25 is far from insurmountable, I'd have assumed if I started a company like this I'd go to villages to sell and find everyone already has one you know?
Because again the point of a $20 solar lamp really is that there are no monthly payments like kerosene lamps. How to drive a payments platform on that I still don't really know.
- edit Bad spelling, early morning before my coffee.