Monday, 15 February 2016

Low-Cost solutions

Low-Cost solutionsLOW-COST SOLUTIONS
It is no secret that much of Africa has a bare network of outdated infrastructure like telephone lines, banking services and electric grids. But it is also becoming less secret that, ironically, this deficiency is in fact an opportunity in the modern world. The continent can afford to test without flouting anything important. Solar is a technology, not a fuel-using industrial process like all thermal power stations. It is a way of harvesting energy (solar radiation) that is already there and renovating it into the more usable form of electricity. It does this without using any fuel or labour.

It was believed by many, that a way out already existed that could neatly fill the gap until such a time as a mixed energy grid system maneuvered its way into rural areas. With the right level of investment, solar mini-grids, home systems and pico solar lights could be rolled out across the continent in a matter of years, not decades. In fact, they are already serving millions of people with amazing organizations like Akon Lighting Africa, M-Kopa and Off-Grid. A New Deal for Energy, a partnership launched at the World Economic Forum in Davos, Switzerland, further aims to fill that gap by connecting more than 200 million people in Africa, including 75 million off-grid. The plan aims to invest between $40 billion and $70 billion a year in Africa - a huge, 200-percent increase from what was invested in the continent in 2014.

What makes M-KOPA a success?
For the last four years Kenya-based consumer finance company M-KOPA has enabled 300,000 low-income earners in East Africa to acquire home solar energy systems using its pay-as-you-go model. The home solar systems feature a battery, light bulb, phone-charging facility and a chargeable radio. Customers make a US$34 deposit, and pay off the balance over a 12-month period in daily usage credits of about $0.50. Payments are made via mobile money. After one year, customers own the system outright and no longer have to make daily payments. GSM sensors in the equipment allow M-KOPA to regulate usage based on payments received. If a customer stops paying and runs out of credit, the system ceases to function.

An amalgamation of innovative technology, an effective rural distribution system, a compelling value proposition, and a strong emphasis on customer care has made M-KOPA a success. The company has been directing its new business line for the last six months during which 40,000 add-on products were purchased by its existing customers. The biggest seller so far is a Kenyan manufactured energy-saving cooking stove brand that promises between 50-70% reduction in charcoal consumption and significant cuts in indoor air pollution.

M-KOPA has also sold over 9,000 Huawei and Samsung smartphones in the $50 to $100 price range. It is now shifting over 1,000 smartphones per month. M-KOPA hopes to introduce more products as it strive to expand its offering beyond solar energy. M-KOPA plans to reach over one million homes by the end of 2017. The company is presently connecting solar to 600 new homes each day across Kenya, Tanzania and Uganda. Read More.....


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