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.