From the Sun (Bypassing the Grid) to the BoP Consumer
A fundamental problem across various forms of renewable energy is this: Infrastructure requires a hefty capital investment. In the Western world these costs can be a deterrent, however at the BoP (where people often survive on $2 a day), these costs are downright prohibitive. The Economist explained the dark side of solar powered systems this way:
The problem is that although sunlight is free, a lot of those 1.6 billion people still cannot afford the cost of the kit in one go, and no one will lend them the money to do so.
Taking its name from the amount of time it takes sunlight to reach earth (yes, 8 minutes and 19 seconds), Eight19 is one of the many companies working to deliver solar energy to the 1.6 billion people of the BoP in need. I’d like to turn your attention to this company because there is one aspect that sets Eight19 apart from many of the rest: Eight19 circumvents the costly problems of renewable energy infrastructure with its pay as you go model that allows for off-grid energy access. Through its IndiGo technology, Eight19 consumers can text unique codes (obtained from scratch cards) to a service that in turn credits their personal solar cell. This solar cell can be obtained with a $10 deposit and eliminates the constraints of being near an electricity grid, as many African locals aren’t. Upon payment, Eight19 powers the solar cell to receive solar energy and consumers can connect electricity-thirsty cell phones and LED lamps. Furthermore, Eight19 is in the process of developing flexible solar strips that are more lightweight and less expensive than traditional solar panels, which will ultimately reduce costs all around.
Eight19’s hope is that its consumers are able to ride the Energy Escalator, the process by which users can afford more energy for expanded purposes (such as TV, radio, and other leisure items). Like a traditional escalator, riders are able to cruise to the top or jump off at any point of the ride, depending on their goals and destinations. If a user decides to terminate his energy supply, he isn’t charged nor is he ever committed to long term debt.
When asked what unexpected challenges the budding energy provider has met, CEO Simon Bransfield-Garth said that distribution has proven to be costly. Because the areas that his team serves, such as remote villages in Africa and India, are low density, they are expensive to reach. On the other hand, the team has been pleasantly surprised that consumers require little training in operating the solar cells, thus freeing up resources. Additionally, Bransfield-Garth shared that scratch cards have been an effective and intuitive method of payment for his market. “The idea of pay as you go and of scratchcards is universally understood from mobile phones which have deep penetration even in the most remote emerging markets.” So, it seems the nascent model has many more smoothly working parts than it has problems.
Beyond delivering renewable energy, Eight19 has developed a method to establish what I’ll call “renewable social good.” In its attempt to deliver as much electricity as possible, the for-profit company has partnered with Solar Aid (a nonprofit) to develop The Kickstart Fund. The Kickstart Fund accepts donations that allow Eight19 to deploy solar cells to rural African consumers sans the $10 deposit. The resulting revenue from the users scratch card energy payment is funneled back into the fund, allowing for Eight19 to deliver more solar cells to those who would have trouble jumping the deposit hurdle.
When Eight19’s snazzy and accessible product debuted at this year’s World Future Energy Summit, it even managed to catch the eye of HH Sheikh Mohammed bin Zayed Crown Prince of Abu Dhabi, a big proponent of renewable energy. While I was far from the WFES, I can imagine that it was an exciting gathering, pregnant with potential. As Bransfield-Garth said, “there are 300M households world-wide without electricity and our objective is to start to make a dent in that number. Ambitious but achievable.” It will be interesting to see what challenges Eight19 encounters and how the company develops over its early months, but as of now their future is bright.