According to the World Bank, over 1.2 billion people (20% of world population) still live without electricity. Roughly 25% of these, 550 million people, live in Africa. Most people without electricity use solid fuels – charcoal, animal dung and wood – for cooking, lighting and heating. Millions also use dirty, smelly and dangerous kerosene. The result is millions of deaths annually from respiratory diseases. Many of those who do not die have to contend with chronic or recurring respiratory illness.
Yet, illness is just the tip of the iceberg, lack of electricity leads to deprivation of basic human rights and, opportunities for a better life. People cannot access modern health services in the absence of electricity; neither can they obtain relief from the hot African sun nor refrigerate their food. One does not need to think hard to come up with a long list of deprivation caused by lack of electricity.
The World Bank estimates that to deliver universal access to electricity by 2030, new capital investment of between $35-40 billion is mandatory annually. This does not include the $450 billion required every year just to maintain energy services at current levels.
The cost of solar energy has fallen and is a great energy alternative for sunny Africa. However, despite falling costs, the upfront cost of solar energy kits is still beyond the reach of most people in Africa.
Addressing the Problem
Several solar startups have come up with creative financing models that allow low-income families to purchase solar power in instalments using their mobile phones.
One of these is technology company Eight19; through its spin off Azuri Technologies, the company has come up with a pay-as-you-go solar solution dubbed Indigo. Indigo now has over 20,000 systems installed in Ethiopia, Kenya, Malawi, Sierra Leone, South Africa, South Sudan, Uganda, Zambia and Zimbabwe. Azuri combines mobile phone and solar technology to offer solar-as-a-service where the user pays to use the solar product by buying weekly scratch cards. The scratch card is loaded onto the mobile phone after which the customer receives a text message containing an access code. This access code is fed into the solar unit and instructs the unit on the amount of energy credit to load. The initial set-up costs are miniscule when compared to the upfront payment for a solar kit. Customers are charged only about $10 installation fees. The system is mounted on the roof and can power two LED lights as well as charge a mobile phone. Customers pay only about $1.50 a week, much less than the cost of kerosene and solid fuels.
In Kenya, M-Kopa solar has taken the rural countryside by storm. The "M" stands for "Mobile" and "Kopa" is the Swahili word for borrow. As at February 2014, the company was providing solar power to more than 50,000 households. A typical solar unit comprises a 4W or 5W solar panel, LED lights, a mobile phone charging unit, and a rechargeable radio. All this is available to the customer at a deposit cost of about $30 and $0.5 daily for one year until they own the kit outright. This compares favorably with the more than $200 annually that rural households in Kenya spend on kerosene. Payments are made using the M-Pesa, a mobile money platform operated by Safaricom.
So far the adoption rates of pay-as-you-go solar power plans in Africa have been terrific and if the current trend continues, the result will be rapid electrification of rural Africa.