Published on July 27th, 2018 | by Jake Richardson0
SunExchange And Powerhive Partner To Bring Solar Power To 175,000 Kenyans
July 27th, 2018 by Jake Richardson
Proceeds from sales of the Sun Exchange SUNEX digital rewards token for pre-financing of solar power installations are expected to raise $23 million dollars in order to install 150 solar power projects in Kenya to provide clean, renewable electricity.
Both Sun Exchange founder and CEO Abraham Cambridge and Powerhive founder and CEO Christopher Hornor answered some questions for CleanTechnica.
1. Why did Sun Exchange partner with Powerhive and how did the partnership come about?
Abe Cambridge: Sun Exchange’s goal is to ‘connect people to the sun’ and there is no more powerful way of achieving this than enabling anyone in the world to own solar panels powering developing regions previously without energy access. In 2017 and 2018 Sun Exchange member surveys, rural solar-powered mini and micro-grids were by far the most desired project type. We’ve since been scouting the market to identify the ideal project partner — one with a good track record, great ethos, and with happy customers. As the leading off-grid mini-grid developer in Africa, Powerhive met that criteria.
2. Why did you decide to help install more solar power in Kenya?
Chris Hornor: Bringing clean power to rural communities achieves greater social, environmental and economic impact than anything else as it provides access to education, healthcare equipment, and energy for productive use. Being on the equator, Kenya has ideal conditions for solar power, yet there are so many communities going without basic electricity access. Providing utility-grade solar power to communities provides access to clean and affordable power and all of the opportunities that come with it. This reduces urban migration which can cause slums and informal settlements to expand which often results in the loss of cultural heritage and sustainable, traditional farming practices.
3. How do you decide exactly where in Kenya to install the solar power systems?
Chris Hornor: Powerhive has built a very powerful software tool which utilizes Google Earth to scan villages and communities to find optimal locations for the sites. Powerhive’s proprietary mini-grid site location tools combine powerful GPS tools with on-the-ground scouting and community engagement. Sites are measured against a rigorous set of criteria including willingness and ability of communities to pay for electricity, and proximity to the national grid, before being approved by Powerhive management for development.
4. Where will you source your solar panels?
Chris Hornor: When it comes to generation assets, Powerhive is technology agnostic and will select the best hardware to meet the needs and geography of the site. Many of our solar panels come from our strategic partners, like First Solar, though we make purchasing decisions based on quality, price and availability. Solar panels are sourced from top-tier manufactures, mainly thin-film panels by First Solar, or crystalline solar panels by Canadian Solar or similar organizations.
5. Will local people be used when possible to install the solar arrays?
Chris Hornor: Empowering local people is at the core of Powerhive’s mission. In each village, local residents are trained to help construct the grids as well as maintain the equipment and are also employed for ongoing operation, maintenance and customer service work. But Powerhive actually goes further and helps to create income-generating opportunities for customers, such as the popular Kuku-Poa (Better Chicken) program, which connects customers to poultry rearing equipment, training and market access. Green collar job creation is one of the biggest social impacts of solar development in Africa.
6. When will the fundraising part of the project be completed?
Abe Cambridge: The Sun Exchange SUNEX Token sale ends on the 31st of December 2018.
7. When will the solar power systems be installed?
Chris Hornor: 20 sites are already in operation. Each site takes a couple of months to build, and we are targeting 10,000 sites within the next 5 years.
8. Can backers of your project expect a certain rate of return after buying in?
Abe Cambridge: The rental income earned by backers of our projects (Sun Exchange members) will amount to at least a return of 10% IRR.
9. Does your system run on Ethereum?
Abe Cambridge: Our SUNEX token is an ERC20 standard cryptocurrency on the Ethereum blockchain. It is a gamified rewards currency and can be used to get discounts and bonuses when using Sun Exchange and can even be staked into our solar project insurance fund. They can be earned through our platform or bought in our token sale, the purchase of which also contributes funds to Powerhive’s new mini-grid projects.
10. How much could a Kenyan household without electricity save by getting a home solar power system instead of using kerosene?
Chris Hornor: Powerhive doesn’t provide individual home solar systems but rather connects homes in off-grid communities to utility-grade (AC) power, versus most small solar home systems in the African market, which provide DC power. With a Powerhive connection households are able to purchase and draw electricity from the grid in the same way that people in cities do. Customers do not purchase energy assets outright, but rather pay a connection fee and then variable usage fees which change depending on demand, just as most electricity consumers in ‘developed’ countries
Currently, 81 percent of Kenyan households don’t have access to electricity. Rural Kenyan households spend an average 26% of their income on kerosene, which is expensive, has been increasing in price year on year, and has high levels of associated fire and respiratory health risks (source). When households get a Powerhive connection, they also cut their spending on diesel, batteries and travel costs associated with having to go elsewhere to charge their phones or get other energy sources. Add to that the support for productive energy use provided by Powerhive and you’ve set the stage for local economic development to thrive in a way that it couldn’t before. So, the goal is to not only enable households to save money but to actually earn more.
11. If your first effort is successful, will you attempt another?
Chris Hornor: The Powerhive model has already proven to be successful, the innovation now is integrating with cryptocurrency in order to scale, to give regular people the opportunity to invest in these life-changing clean electricity assets and to basically create a new model for financing electricity access in emerging markets. We’re optimistic that it will be successful and then we’ll do thousands more!
12. Can solar power pull a Kenyan household with no electricity out of poverty?
Chris Hornor: Powerhive provides a productive electricity connection, and not small roof-top home solar systems. With that being said, having access to electricity can absolutely pull a Kenyan household out of poverty because it provides access to a wealth of opportunities. Powerhive also offers customers internet access, which opens doors of possibility to participate in broader economic activities, to communicate and collaborate with others, and to access a global network of information which can empower people to learn new skills.
Abe Cambridge: Powerhive also offers what it calls the Kuku Poa program, which provides the skills and knowledge to people in newly electrified homes to run chicken hatcheries using electrical equipment such as incubators and lighting systems. This initiative opens new revenue streams for households, providing them with additional income which they can use to improve their living conditions and to purchase more electricity. This is a truly symbiotic relationship between Powerhive and households. Incorporating Sun Exchange into the equation as the finance mechanism for these projects further adds to a mutually beneficial three-way relationship.
13. Will your solar systems be grid-connected?
Chris Hornor: Powerhive’s off-grid utility solutions are designed for grid-interconnectivity, though they are currently primarily being deployed where productive power is needed most, further from the national grid. Furthermore, the ‘smart’ functionality of Powerhive’s ‘Honeycomb’ operating system enables national grid operators to have more stable and resilient ‘nodes’ of power at the so-called last mile of the electricity grid. The ideal situation is that Powerhive grids can be deployed now, quickly, to get rural areas online and then if/when the national grid arrives Powerhive can plug and play and create a more stable national grid.
14. Will they be paired with energy storage?
Chris Hornor: All Powerhive mini-grids have battery banks into which unused solar energy in the day time is stored to be used at night-time. The Honeycomb cloud-based energy management system then enables the very efficient (and remote) management of electrons from the generation and storage assets to the end-user. One of the beautiful things about Powerhive’s modular solution is that we can see when a certain community may be approaching maximum load/capacity of the mini-grid and we can easily go in and expand the system as needed. Of course, we’d love to see a situation where all of our customer communities use so much clean power that we have to expand all of our sites.
Image Credit: SunExchange and Powerhive
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