Pay As You Go Sunshine: How Solar Energy and Mobile Phones are Powering the Developing World

Every night, something unusual happens in Samuel Kimani’s home on the outskirts of Nairobi, Kenya. Samuel, 48, lives with his wife Mary and their three children. Their family supports itself day-to-day through their main source of income, their cow Baraka, whose milk is collected daily and sold directly to customers for about $1.80 a day. Their township has few amenities and grid electricity is available only to the few who can afford it. But at Samuel’s house, two bright lights shine all through the evening.

Samuel used to light his home with a single kerosene lamp, which filled the rooms with smoke and poor-quality light and cost $3 a week. With his low income, Samuel could support his family, but he wasn’t able to make long-term investments in other systems to light his home. That is, until he became the first person in the world to use the IndiGo pay-as-you-go solar energy system. Samuel purchased the system for an affordable $10 and now activates it automatically with a $1 scratch-card each week. Through IndiGo, Samuel’s small home now has two bright lights providing eight hours of light each evening, which enables the kids to study in the living room whilst Mary prepares food in the kitchen. Instead of spending $0.20 to charge each of their three mobile phones at one of the many local kiosks he simply charges them at home, saving $1.50 per week in the process.

“With kerosene I couldn’t read comfortably, always straining. But it was the children who suffered most; we used to run out of kerosene four or five times a month, and with no light they couldn’t complete their studies. Now we have clean permanent light, we are saving money, and I am so happy for me and my family.” 

In today’s special edition of “Digital Diversity”, Olivia O’Sullivan, our Media and Research Assistant, interviews Simon Bransfield-Garth, the CEO of Eight19, the company providing pay-as-you-go solar energy to people like Samuel. Eight19 takes its name from the time it takes sunlight to reach the earth – eight minutes and nineteen seconds.

Digital Diversity is a series of articles from kiwanja.net about how mobile phones and other appropriate technologies are being used throughout the world to improve, enrich, and empower billions of lives.

Interview by Olivia O’Sullivan

Hi Simon. Can you tell us exactly what Eight19 does?

What we’re trying to do is find novel ways to bring solar power to emerging markets, trying to get over some of the problems that have occurred in the last ten years when people have tried to take solar into those markets.

What we did was to combine mobile phone technology and solar technology. This allows us to create what we call “pay-as-you-go solar.” So just in the same way as you buy a scratch-card for your mobile phone every so often, you buy a scratch-card which enables your solar power to work for a period of time – for example a week or month, whatever it may be.

How does the system work in developing countries? How does solar power change people’s lives?

The solar-as-a-service model plays very well in emerging countries partly because the pay as you go model is well understood; people have pay as you go mobile phones. But also because we’ve eliminated the upfront cost of buying a solar light, so we can give people an economic return on a day by day basis. Where people don’t have electric light their options are kerosene or in some cases candles – about 80% of Zambia uses candles – and in South Sudan, for instance some people even just use grass as a way of lighting their houses. The amount of money people spend on kerosene for lighting is huge – about 38 billion dollars. When you compare the cost of that kerosene light for light with mains electric lighting, the light out of a typical kerosene lamp costs between a hundred and a thousand times as much – just because it’s a very inefficient lamp and kerosene’s expensive. So you end up with a situation where the people who have the least income in the world are paying not just a bit more for their energy but vastly more for their energy.

By providing solar we can eliminate that cost and replace it with something more modern and up to date. For example, in Kenya people are spending the equivalent of about 12 dollars a month for kerosene and for charging their mobile phone. We’re providing the IndiGo solar energy system for just over a dollar a week, so effectively for five dollars a month the user is getting light for two rooms and also power to charge a mobile. So we’ve roughly halved people’s energy spend and we’ve given them the benefit of solar power instead of kerosene.

What we find is that once people have solar power then it has a very dramatic effect on their daily lives. The light doesn’t just allow them to cook but it allows things like children to do their homework. Over time users can upgrade the system to progressively more powerful solar units. As you provide more power, you enable other things – such as access to a radio or a television – and so what the electricity is doing is providing key things that we’ve come to value in the more developed world like access to information and access to media; both of which have an important social impact, including the ability to participate in the political process. It’s much more than just providing light.

The fact that the weekly fee actually reduces users’ spend, by eliminating the cost of kerosene and charging phones, makes it much easier for us to sell into the market because we sell from the point of view of an economic proposition rather than just ‘solar-power is good’ – if you speak to someone who’s been living with kerosene for fifty years, sometimes it’s quite difficult to persuade them kerosene fumes are harmful things they don’t want to have. But if you say to someone who spends a quarter of their income on energy that they can halve their energy bill, then all of a sudden that has a direct impact – then after that they see the benefits of solar.

Approaching this as an economic proposition seems quite important to this project – it’s not charity – do you think this is the best way to approach alternative energy and development?

There’s been a shift in mindset in the last ten years or so on how to support people who are at the lower end of the income scale. There was a tendency years ago to dive in with the grand gesture –provide a tractor in Africa and so on – and the problem with that is it comes out of context, it doesn’t come with all the infrastructure that’s needed to support it and we saw many examples where the equipment breaks down and that’s the end of it because there isn’t anybody to maintain it and no spare parts. We have a firm belief that sustainable technology needs to have a sustainable business model – so as far as possible what we try to do is to build a local economy around the technology. Where we’re rolling out lights, we have local maintenance, local distribution, local marketing, and so on.  A really simple example of that is we now manufacture our scratch-cards in Kenya as opposed to shipping them in because we’ve got a market for them in Kenya and we have found a local printer.

So why has it been so difficult to sell solar power?

The question we asked ourselves was, “if solar power is so obviously beneficial, how come the world isn’t awash with it?” One of the problems with solar and characteristic of a problem with renewables in general is the need for the end user to buy the equipment up front. Normally, to use electricity I don’t expect to have to buy my own small power station – but with renewables that’s exactly what we expect. So there is a challenge. Fundamentally, people are being asked to change their business model. Instead of using something as you go along, now they’ve got to find their own capital. In Africa if someone wants a reasonable home lighting system, the cost starts at about fifty dollars – in terms of proportion of salary, that’s roughly the equivalent of buying a car in the West. The IndiGo system addresses that by providing solar as a service with a very small initial cost. This is readily understood –  people just seem to intrinsically get what we’re trying to do.

One of the things that’s attractive about this approach is that once somebody transitions to solar you can be pretty certain that they’re never going back to kerosene.  Solar gives a completely different class of light, it eliminates the fumes – kerosene fumes are believed to be responsible for the deaths of about 1.6 million people a year, which is more than the number of people that die from malaria, from a combination of chronic respiratory illnesses and from fire.  On top of that, the carbon footprint of the kerosene is about 190 million tonnes, which in context is about the same as the carbon footprint of Argentina, or about 30 million cars on European roads.

You said people, once they get their lamps they start to think about getting radios and TVs and the like – how does that work? How is it affordable?

Off-grid rural customers in emerging markets have the same aspirations as everybody else. They’d like to have TV, radio, internet and a computer, fridges – all the other things that everybody else would like to have. We wanted to create a kind of a journey to help people extend their use of electricity, so we came up with this idea of the “energy escalator.”  If you imagine a rural family in, say, Malawi – we provide a couple of lights and the ability to charge a phone. Over time the customer uses that and saves money at the same time. So after a period of time, their solar unit has been paid off. Then we offer an upgrade to that system. We can afford to charge a little bit more because the customer has just saved 100 dollars or so over the previous 18 months compared with what they would have spent on energy. So now that customer, say, has four lights and a radio. And then that pays off after a period of time, so you go onto the next step, maybe powering a television. And so, over a period of time a rural customer transitions in steps from no electricity to still being a rural farmer, but now having many of the benefits of electricity.

We have found that people view electricity very differently to the way that we do in the developed world. In the West, we’ve been brought up with the idea that electricity is relatively cheap so we use it in pretty inefficient ways – a great example is if I want to make a cup of coffee in the morning, then somebody over in a power station takes some fossil fuel which they burn to heat water, to drive a turbine, to generate electricity, to go a long way down a cable to warm up water to make my cup of coffee. There are great chunks of that chain which are inefficient. Whereas for off-grid customers, nobody would dream of using electricity to boil water, electricity’s far too valuable to use for that; you use electricity because it gives you information, it gives you communication, it gives you light – it’s a very valuable commodity.

Do you think that if this does scale up widely, we’ll ultimately have an off-grid, more efficient energy system in the developing world than the one that exists here? And in a sense these countries will just skip the grid?

I think that’s exactly what will happen. When we look at the off-grid market, the numbers are actually very substantial – there’s somewhere between 1.4 and 1.6 billion people, around 22 % of the world’s population without electricity. One of the assumptions prevalent about ten years ago was that the grid would eventually reach everyone. But the cost of extending the grid to rural areas is very high and today power can be delivered more cost-effectively using renewables, generated locally. This is directly analogous to mobile phones which have removed the need to extend landlines into rural areas. IndiGo enables the end user to fund the infrastructure, using the premium they were previously paying for kerosene, in order to get their own power generation without the up-front cost.

How do you plan to expand and scale up and how do you think energy use is going to expand in the developing world in the future?

At the moment have products in Kenya, Zambia, Malawi and South Sudan. And our vision is that these products will grow with the dynamics of consumer electronics, rather than the dynamics of alternative energies. It seems just to be something that works. And people really like it. When we did our first trial of 30 units in South Sudan, a queue formed of people standing there with their ten dollars saying ‘I want my light please’ and we had to say ‘sorry, we’ve only brought 30 this time’ and they were quite upset because they wanted their light! It’s just about providing a mix of technology and business model that enables things to move forward.

If you think of the rate at which mobile phones for instance penetrated developing markets, that’s the sort of dynamic that we would like to get. So our goal is to have tens of thousands of customers this year, hundreds of thousands of customers next year and millions of customers the year after.

Ambitious?

It is, but there are three hundred million households which don’t have access to electricity so unless you get into the millions you’re not making a dent in the problem. One of the things that we see is the transformational change that you get when people have access to this power, it’s not just a case of saving money but it enables people to do things that they previously couldn’t, because they have access to information, to media and to light. So a really simple example of one of the things that people do with mobile phones – people can move from just growing subsistence crops to having market information, market prices so they can grow more in the way of cash crops, and get involved in much more energetic economic activity. In a sense it’s a way of helping people get into the information age without having to go through the industrial revolution.

Simon Bransfield-Garth has 25 years global experience building rapid growth, technology-based businesses in sectors including semiconductor, automotive and mobile phones. His career includes 7 years at Symbian, the phone OS maker, where he was a member of the Leadership Team and VP Global Marketing. Simon was founder of Myriad Solutions Ltd and was previously a Fellow at Cambridge University. He holds a BA and Ph.D in Engineering from St John’s College, Cambridge UK.

Digital Diversity is produced by Ken Banks, innovator, anthropologist, National Geographic Emerging Explorer and Founder of kiwanja.net / FrontlineSMS. He shares exciting stories in “Digital Diversity” about how mobile phones and appropriate technologies are being used throughout the world to improve, enrich, and empower billions of lives. You can read all the posts in this series, visit his website, or follow him on Twitter.