NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, June 9, 2015

The energy-poor tend to be among the poorest people in their countries and cannot afford the high upfront costs of a quality solar solution. About 400 million people in India live in remote villages and don’t have access to an electricity grid. Millions more have only very limited access to electricity. Although distributed solar based solutions are available, high up front costs keep them out of reach from many who have limited income and cannot obtain bank financing.

Realising this “opportunity”, a number of players have taken to “solar as a service” model. However inexperience in rural markets, supply chain issues, timely collection of payments, and providing quick maintenance has been too much to handle for many of these companies. For this reason the Seattle based start-up Simpa Networks decided to spend a lot of time honing their solar-a-a-service model for energy-poor households and micro-enterprises, before jumping in to the scale up phase.

Present in India through its subsidiary, Simpa Energy India, the company has developed a basic, portable solar home system that is simple to install and affordable. Their basic system provides 2 to 3 LED lights, a 40-watt solar panel and a 26 Ah battery. Users pre-pay via cell phone based on actual usage and each payment adds to the total purchase price of the solar home system. Once fully paid, the solar home system unlocks and delivers free electricity for the expected 10-year life of the product.

In 2014, the Overseas Private Investment Corporation (OPIC), the US Government’s development finance institution, committed to provide Simpa a $3 million loan, which has subsequently helped the company expand its customer base from 5,000 to more than 40,000.

Simpa is one of the seven OPIC clients which were recently honored with Impact Awards. The company was recognized for its efforts in the renewable energy category.