Solar power is cheaper than fossil fuels all across the developing world. But there are still significant barriers to the development of solar power in those markets. Of course, high upfront costs are not an option for many people in the developing world, and there’s also a common assumption that “the grid is just about to arrive” — it’s a promise a lot of politicians run on… but never deliver — which creates a notable cultural barrier to alternatives such as off-grid solar or the development of microgrids.
Nonetheless, creative entrepreneurs with a desire to help those in developing countries gain access to clean and reliable electricity have been finding ways to get solar and solar-powered lights and electronics into these markets.
One way a number of companies we’ve featured are doing so is by offering solar panel systems or solar-powered lights and electronics for free, and then charging for their use through monthly or pay-as-you-go service plans.
One company we haven’t yet featured who is offering such a service is BBOXX, based out of the UK and spawned out of a university-based effort to help bring electricity to developing societies.
BBOX recently landed nearly $2 million of investment from Khosla Impact. An interview with Mansoor Hamayun, the CEO BBOXX, was recently published on Greentech Media. From that article, here’s a very quick overview of what BBOX offers.
“We provide plug&play solar systems from 3W to 5kW with the appropriate low power accessories to cater for a wide range of energy needs,” the BBOX website states. But it also includes numerous “accessories” — LED lights, DC LED TVs, USB phone chargers, DVD players, satellite decoders, radios, laptop charging kits, inverters, small refrigerators, and fans — as well as multiple packaged solar kit options.
And, for a brief look at the business side of BBOX, the Greentech Media article includes this insight:
BBOXX stepped in to Africa with nothing more than £45,000 scrounged between the three co-founders. Given its cash-starved state, and the demand driven by African partners, the firm was forced to be sales-driven: without cash flow, they couldn’t grow. The company is now pulling in $3 million yearly and is building operations in a new country every six weeks. Currently, BBOXX is in fourteen countries and is introducing its own retail network. Not bad for a few years’ work.
But the real innovation, which earned it a $1.8 million Series A round from Khosla Impact, is the pay-as-you-go finance solution enabled by remote battery monitoring.
What’s the big deal about the remote monitoring? As a Khosla Impact representative interviewed says, it’s all about understanding what these consumers need, understanding the market, and building confidence in the extremely important financing sector. “Gathering data on customers’ energy usage behavior is the only way we can learn how to provide energy as a reliable service. We believe this innovation is central to unlocking the pay-as-you-go business model and making solar energy an accepted, trusted and financeable product in the eyes of the off-grid world,” Sandhya Hegde says.
Expect financing models that allow more and more people in the developing world to go solar and get electric appliances and devices through pay-as-you-go and monthly payment plans to blow up in the coming years. The financing market is just opening up to this extremely high-potential market.
In fact, I’d contend that this type of model will also blow up in the developed world. We’re already seeing strong initial growth in the US solar leasing market. Ideally, imho, the companies that dominate this growth will be enabling eventual ownership and long-term self-reliance for their customers. I know that some of these companies charge indefinitely for the use of the offered products, while others credit the small, regular payments towards the eventual purchase of the solar panels, lights, electronics, or whatever they’re offering. Hopefully, as the market grows and competition heats up, the “spread the wealth” models will win out. I’ll try to not be too cynical. 😀
All images via BBOX.
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