This is a guest blog by Eight19, a company aiming to develop the technologies and manufacturing processes that will bring off-grid solar power to a new generation of users.
Imagine - when the sun sets today you have no access to electricity: no light, no sight, a different life. This lack of energy access was the reality for UN Secretary General Ban Ki-moon as a young boy in post-war Korea. At the World Future Energy Summit in Abu Dhabi in January, Mr Ban recalled how “A simple light bulb illuminated a whole new world of opportunity for me, enabling me to study day and night”. His address marked the launch of the UN’s Year of Sustainable Energy for All Initiative which sets out to address some quite startling statistics.
1.6bn people lack access to electricity and often use kerosene-based lighting. This fuel-burning approach costs end-users $38 billion and has a carbon footprint roughly the same as a country such as Argentina. Even with the rapid rate of global development, the World Bank predicts over a billion people will still be off-grid in 2030 because the increase in electrification is unable to keep up with population growth.
With abundant sunshine in most developing countries, solar power is an obvious alternative to kerosene, candles or disposable batteries which light for light, cost over 100x the price of the equivalent energy in the West. This cost can represent as much as 30% of the net income of poor households. The challenge for a rural farmer is how to afford a $50 solar lighting system on an income of $3/day, roughly the equivalent of buying a car in the West on a Purchasing Power Parity basis.
Eight19, which gets its name from the 8 minutes 19 seconds that it takes sunlight to reach the earth, set out to bring affordable and clean energy to the off-grid market. By combining mobile technology with solar technology, the Indigo solar product is the world’s first mass-market “pay-as-you-go” solar lighting product for off-grid emerging markets. Users receive 8 hours of clean, carbon-free lighting for two rooms and also mobile phone charging, whilst halving their weekly energy spend from day one. By allowing the system to be paid off through the weekly purchase of scratch cards, the traditionally prohibitive high upfront costs of solar are removed. In Kenya, users spend $1/week and are saving about $2/week on kerosene and a further $1-2 per week on mobile phone charging costs.
Each Indigo system pays back in just 18 months, making it one of the most compelling applications of solar power in the world. At this stage customers can upgrade to a larger system to access more electricity through the "energy escalator” to grow from simple systems to full home electrification. Users move from a starting point as a disconnected rural farmer to an informed, connected one with the benefits of electricity. Like an escalator, users can get off at any point and so are not committed to a long-term debt. This “pay-as-you-grow” business model is unique in the industry, assisting users to earn their way out of poverty without hand-outs or charity.
Indigo systems were first installed in Kenya and are now reaching Zambia, Malawi and the world’s youngest country, South Sudan. The initiative is having a genuinely transformative impact on users’ lives. Time savings are made on charging mobile phones at the market or collecting kerosene. In South Sudan, women could spend up to 3 hours each day collecting grass to burn for lighting. With Indigo, customers value access to the “permanent light” (as opposed to kerosene which all too often is intermittent) that enables longer engagement in revenue generating activities and facilitates children’s studies. Four months after one family in Kenya purchased Indigo, one of their 10 year-old children was awarded a place in secondary school after coming third in his school’s Kenya Certificate of Primary Education exam. The parents directly attribute this to having light. These collective knock-on effects of Indigo are crucial to its sustainable impact to stimulate economic growth at the local level.
Eight19 has demonstrated a way in which emerging markets can provide an economically sustainable business opportunity that helps alleviate poverty and brings many of the benefits of developed living to communities, while preserving a traditional way of life. Just as mobile phones removed the need for landlines, so affordable off-grid power can be more effective than waiting for the grid to reach rural communities. The company’s vision of the “un-grid” is one where developing countries can effectively leap-frog the grid and benefit now from the communications revolution of the developed world.