5 market innovations revolutionizing solar in the developing world
Solar energy investment and development can be especially impactful in the developing world, where a billion people live with unreliable electrical grid service, and another 1.3 billion live without the grid entirely. Traditional energy solutions are unavailable to these largely rural and decentralized populations, but renewable energy sources like solar are an ever-present resource that many organizations are beginning to pursue as a sustainable and affordable alternative.
Much of this market activity constitutes manufacturing and selling another solar lantern or cell phone charger, but there are also innovative models which are fundamentally changing the delivery of solar energy to developing populations. Here are five such innovations that are increasing access to affordable clean energy and creating economic opportunity in the developing world.
Clearly, one of the major barriers to solar adoption in the developing world is the cost of grid access or system installation in the first place. American residential solar systems can run into the thousands of US dollars, but even simple systems that power a cell phone and a couple lights can cost a developing houshold more than they can afford. To push adoption and remove purchasing barriers, Simpa Networks is pioneering a pay-as-you-go financing model in India, wherein the solar installation costs are dramatically reduced and are then capitalized over the next few years as the user prepays on a per-kW basis for the energy that they consume. Once it is paid off completely, the system is permanently unlocked to allow the energy to flow freely, thereby allowing users to avoid prohibitively high setup costs while still being able to buy solar energy systems without credit.
Mobile payment tools and plans
People living in the developing world similarly have poor or no access to traditional banking and money management services, making regular payments from a remote location another key challenge. Fortunately, the Information Age has made mobile phones ubiquitous even in developing areas, and organizations like Angaza Design are utilizing them as a primary means of payment for energy access. Angaza sells solar lanterns, but they specialize in a software platform that transmits data over cell phone voice channels (similar to how dial-up modems work) enabling reliable data transfer and energy payments using only a mobile phone and a voice plan, not Internet access. This also streamlines the business side of things, allowing energy producing organizations to efficiently sell to customers who previously would have provided too little revenue and been too widely dispersed to serve profitably.
One-for-one product subsidizing models
Discounted and subsidized prices can also increase the adoption of solar energy in poorer markets.