Published on May 12th, 2014 | by Jake Richardson0
SunFunder Finances Solar Projects In India, Africa, & Latin America
May 12th, 2014 by Jake Richardson
Based in San Francisco and Tanzania, SunFunder raises money for solar power projects in communities of need, such as African and Indian villages that often don’t have reliable access to electricity. Over 100,000 people have benefited from their solar projects so far. Below is an interview with them about their work.
Micro-grids is just one type of the various types of solar projects that we have financed. Our focus is on providing short-term, working capital and project finance loans for solar lighting, phone charging, micro-grids and commercial solar projects.
Are micro-grids mainly for towns, cities or whole regions?
To date the micro-grid company we’ve worked with (Mera Gao Power) provides its services to rural villages and hamlets in Uttar Pradesh, India, servicing about 25 households per installation. However, micro-grids around the world may service other demographics as well.
Considering that the old style grids are not the most efficient systems, how much more efficient are new micro-grids?
We launched our first micro-grid project in rural India earlier this year. A typical household of 5 people there spends $4 a month on kerosene lighting and cellphone charging. A solar micro grid there costs only $1k to set up, powers 25-30 households, and costs each family only $2 a month while providing 7 hours of light that is 10 times brighter and also includes overnight cell phone charging. The payback period for this is 3 years. A continued $2 a month, which is again less than what families are paying there now, covers the cost of ongoing maintenance, upgrades and also creates new local employment. (Example)
Your website says you have impacted 105,000 people so far with you solar financing work. How do you know how many have been impacted, and what are the impacts?
Before launching a new project, we conduct due diligence on the partners and also ask them to submit a project proposal for each project that notes, among other information, how many units of solar products will be sold with the funding they’ll receive. We then assume that each unit will be used inside a household and impact the entire family, so we take the area’s average household size to calculate how many people the project will benefit. Every project page shows an impact table of how we derive our people impacted numbers, and the sum of all the numbers in each table is how we get the 108,998 people impacted number.
Can your model be expanded to reach the one billion your site mentioned that may not have electricity access by 2030?
Our goal is to unlock capital for emerging market solar and to prove that the off-grid solar sector is bankable. If we can achieve our goal, we believe that the large investment we will have catalyzed (directly and indirectly) into the off-grid solar sector will be able to reach the one plus billion living without electricity by 2030.
Are large-scale electricity storage systems part of the infrastructure you are financing?
No. We are currently focused on products, solar home systems and micro-grids. Eventually we will also finance some small-scale commercial projects.
Kerosene and diesel fuel produce harmful air pollution. How much of a benefit is replacing them with solar power to community health?
Health benefits of replacing kerosene with solar are plenty but hard to quantify. It’s easier to think about the dangers to health that kerosene lighting poses for a family, and then recognize that solar products eliminates almost all of those dangers.
Here’s a study by the Lumina Project from UC Berkeley that details the health impacts of fuel-based lighting like kerosene lamps. For example, incidents of fire caused by kerosene lamps are common in off-grid communities because the lamps can be easily knocked over. Kerosene-related burn injuries for children are also common. Moreover, many studies report that accidental ingestion of kerosene is a leading cause of child poisoning in the developing world.
Toxic fumes emitted from kerosene lamps also contribute to poor indoor air quality. Higher exposure to the particulate matter from kerosene fumes is correlated with higher occurrence of respiratory illness, but this requires further research. Another UC Berkeley study has shown that the amount of particulate matter that kerosene lamps emit (and are likely inhaled by people using them) is equivalent to smoking an estimated 1,040 cigarettes if a solar light is used for its entire lifespan (avg. 5 years).
More and more studies are trying to show quantitative evidence of the health benefits of switching to solar from kerosene, but their number is still low overall. Here’s one randomized evaluation study in Uganda that is probably one of the most rigorous experiments yet to get quantitative data on those health benefits. And here’s a collection of the studies that are available on this topic.
Reliable access to electricity means students can read and do homework at night. Are there examples of solar power systems in place helping students study more?
The majority of impact assessments of solar light usage note an increase in study hours of children whose family switched from kerosene to solar. For example, here’s an educational impact fact sheet by SunnyMoney, one of SunFunder’s solar partners. Many testimonials from solar light users (like d.light design’s customers and Kopernik’s beneficiaries) also mention the difference the switch has made on children’s ability to study for a longer time every day. Even Melinda Gates spoke recently at TED about her experience living in off-grid Tanzania with a family and seeing first-hand the impact a solar light makes for the daughter’s ability to excel at school. There’s really no question to the positive impact of solar for education for children in developing countries.