The biggest barrier towards providing power to the remotest areas in Africa has always been affordability, not only for grid power, but also to get an off-grid panel on one’s roof. But mobile payments, digital financing and innovative financing options are making it a thing of the past in many countries in Africa.
This is good news for a number of reasons – including public health. The World Health Organization (WHO) found that fuels such as wood, dung, coal and other solid fuels - termed as the “killer in the kitchen” causes 1.5 million deaths annually and two thirds of these deaths takes place in sub-Sahara Africa and South-East Asia. Use of these fuels, says WHO, is a major risk factor exposing children to pneumonia and adults to chronic respiratory disease. WHO says that 485,000 people per day must have access to modern alternative fuels if the number without is to be reduced to half.
Solutions are now starting to be rolled out that are a true Cleanleap. About a 100,000 homes in Ghana will, in the next two years, get a solar power kit that allows them to access power by topping up on their phones. After two years of regular payment through weekly top-ups, the buyer can own the equipment – meaning they can get power without topping up again. The power is paid for when needed. Ghana is suffering its worst power crisis in ten years and the growth forecast for 2015 has gone down to 3.9%, from the 4.2% as it experienced lower investor confidence due to lack of consistent power supply.
This system is good news according to Azuri Technologies, which is the company behind the initiative (on a partnership with Ghana-based Oasis African Resource Company). Customers will pay a renting fee less than cost of kerosene and the phone charger to be replaced, and finally for free. It will be preferable for lighting homes and providing energy for needs such as mobile phone charging. Use of kerosene in homes is not only expensive, 244 million tons of CO2 emissions are being released through fuel-based -based lighting in developing countries, with a kerosene-fueled lamp releasing 0.1 tonnes of CO2 in the atmosphere if it consumes a liter a day. That is not the only problem, as two-thirds of the adult female lung cancer victims are non-smokers, the result of inhaling particulate laden kerosene fumes. The World Bank estimates 780 million women and children inhale the fumes equivalent to smoking four packs of cigarettes a day.
Azuri CEO Simon Bransfield-Garth said during the launch that the target was customers who would upgrade to systems that provide enough power for television sets and internet service devices. By empowering people in rural areas with information and other services remotely, the system has potential to reduce urbanization trends in the future – increased urbanization in Africa is creating problems of housing shortage and pollution.
The Pay-As-You-Go kit, launched in the Ghana market during the last month’s Solar & Off-Grid Renewables West Africa Event will be supported by the Ministry of Power. During the launch, Ghana’s Minister for Power, Dr. Kwabena Donkor said the project augments the government’s commitment to incorporating renewables in the energy mix, and they would support it to see rural communities get reliable power. The mobile/digital payments make it easier and quicker for the solar system providers to collect payments and in financing assets – and we know how mobile payment platforms are a success in Africa. Penetration of these platforms therefore, has enhanced growth of off-grid solar power products. Charging a mobile phone is also more expensive in developing countries compared to developed world, and since a mobile phone is a modern-to-have, people are bound to find options through which they can lower such costs and keep going. Still, the high cost of solar panels and lack of on-grid connections are the reason people will look for cheaper alternatives to help keep on these gadgets.
The World Health Organization (WHO) found that fuels such as wood, dung, coal and other solid fuels - termed as the “killer in the kitchen” causes 1.5 million deaths annually and two thirds of these deaths takes place in sub-Sahara Africa and South-East Asia. Solutions are now starting to be rolled out that are a true Cleanleap.
Ghana’s electricity sector is facing the problem of continued black-outs, with many urban and business areas experiencing 24 hour (or more) blackouts – many people in rural areas are left in worse situations and these technologies can prove beneficial at such times. Azuri Technologies has said the system was tested and proven as successful for rural Ghanaians over 18 months before the launch. The Quad system uses Lithium Iron Phosphate Battery Technology. The unit comes with four high quality LED lamps, mobile phone charger and a radio/MP3 player, and is fused with an intelligent smart meter that automatically switches power on and off depending on whether the customer has paid for units or not.
But that won’t be a first for Africa’s pay-as-you-go solar markets: Azuri itself is providing similar technologies in 11 African countries, including Kenya, Rwanda, Malawi, Zambia, South Sudan, Uganda and South Africa. In areas like Rwanda, people are paying significant sums – up to $8 per month for kerosene, which is a major contributor for poverty. Thus, these systems are very beneficial because of their low costs. Reportedly, the rent-to-own models systems are gaining ground. Pay-as-you-go models are now preferred to fee-for-service models where customers do not buy the device but have to top-up continually (without ever owning the gadget) to enjoy power.
Other solutions such as the M-KOPA solar home system, which capitalize on use of M-PESA – a mobile payment and transfer system in Kenya – had reached 100,000 customers by end of September last year with their third generation pay-as-you-go solar kit. The system is also available in East Africa and Ghana (MKOPA III). The popularity of these systems show they have big potential in spreading renewable agenda in Africa, but are being driven by micropayments and mobile technologies. Other pay-as-you-go solar systems launched in Africa include the Offgrid Electric (Tanzania), Mobisol , Equinox and Angaza Design (Tanzania, Kenya and Uganda).
In summary, its a true Cleanleap. A solution to a major health and energy access issue, powered by renewable energy and enabled by some of the world's most advanced mobile payments systems.