Geetanjali is a 20-year-old Indian girl; she comes from a poor family; and her dream is to open her own designer shop when she graduates from college. Thanks tomobile enabled electricity, her dream may come true much sooner that she expected.
Energy Poverty in India
Geetanjali lives in a slum near Bangalore, one of India’s biggest cities; and, like 75 million people throughout the country, her family has had to struggle with energy poverty for years. Where they live, there are actually electric lines; but their house was built without a permit and they could not get connected to the grid.
And, even though they could have accessed it, they would probably have experienced 8-10 hours of electricity cuts every, as it is often the case in the poor neighborhoods. In India, experts say that under-electrification hits about 80 million people.
Geetanjali’s parents do not have much money, and up to last year they would use kerosene lanterns to address their lighting needs after dark, whether it was for cooking, studying, sewing, or simply for eating. However, kerosene light was inefficient, lasted no more than one hour and caused strong indoor pollution. For Geetanjali, it made it very hard to study long hours after dark and in the longer run it would have been a major hurdle to her success.
Of course, her parents could have purchased car batteries. Battery-powered light is often brighter, and it would have enabled them to charge small devices too. For them, it was not the right solution, though. As fuel price has constantly increased over the past decade, car batteries have a cost too, and to some households, it can account for 30 percent of their spending. Besides, they would have had to go regularly to the charging plant and leave the batteries there for two days, which they thought was not so convenient.
Geetanjali’s parents wanted to go solar, just like their neighbors did a few years before. But, however convinced they were about the benefits of solar home system, they had to wait until October 2013 before they could switch to a solar solution when this was made possible by an innovative energy company called Simpa.
Selling Solar Home System Like Cell Phones
Simpa was started in 2011 by two dynamic American entrepreneurs who strived to expand the access to off-grid solar solutions to the base of the Indian economic pyramid. To achieve this ambitious objective, they came up with a simple idea, which was to replicate the success of India’s mobile revolution in the energy sector.
In India, there are 850 million cell phones throughout the country, and it took less than ten years to reach both the richest and the poorest. According to Michael Marcharg, Simpa’s co-founder, the key factors to this incredible success were the fall in handset prices but also the pay-as-you-go model, which has enabled the lowest-income people to adapt their consumption to their actual revenues.
For Marchag, many disadvantaged households actually have the money to pay for the ongoing costs of a solar home system; but often they cannot make the upfront investment. They need time to raise the required funds and as their revenues are highly variable, they need to be able to pay as they go. This is why Simpa worked on a software solution that allows both progressive payment and flexible pricing.
Indian people can therefore get Simpa’s solar home system for a $20-40 initial payment. To have electricity, the users have to purchase prepaid cards of 50, 100 and 500 rupees, on which there is a code. With this simple code, they are able to activate the whole system and generate as much power as they prepaid for.
By purchasing these energy credits, Simpa’s customers do not pay for the light only; they also pay down the cost of the product itself. To most people, it takes them three to five years before they can reimburse the full purchase price; but once it is done, they own the solar home system and can enjoy free electricity for 10+ years.
For low-income households, this progressive payment model makes all the difference, and it is not surprising that Simpa expects to reach more than 60,000 Indian households by 2015. Taking the example of Geetanjali, her parents could indeed afford to pay outright for Simpa’s solar home system; and, for 100 rupees only, they can now get electricity for one or two weeks in a row.
For them, life is much easier. They can power their home with 25-50 watts lamps, but also charge a cell phone, a fan, a mixer or even a television.
As for Geetanjali, she can now practice painting and sewing until midnight, maximizing her chances to achieve her dream!