Fiona Graham, Head of Content   17 December 2015

Improvements in solar panel efficiency, and the widespread use of LEDs means solar energy is cheaper than it’s ever been. Photo: MKOPA

“It’s very good, it is really great, because … you will be able to have access to clean light”.

Felix Ogutu is 36 and lives with his wife and two small children about 30km outside the port city of Kisumu in western Kenya. Like around 2/3 of homes across sub-Saharan Africa, he has no mains electricity.

“Depending on paraffin to light homes was a bit exorbitant and difficult because it is generating some fumes, which are hazardous to health as well as not friendly to the environment,” he says.

The United Nations estimates around 4.3m people die prematurely each year due to indoor pollution caused by cooking fires and lighting.

Felix Ogutu bought his system in 2013 and has now finished paying for it - meaning a substantial saving each month. Photo: MKOPA

The IT support specialist’s wife had read about a new way to buy solar energy systems in the newspaper, and urged him to take a look. 

Instead of paying for the package upfront - which on a continent where nearly 43% of the population live in extreme poverty according to the World Bank would put it out of the reach of most - he was able to pay it off in instalments, sent from his mobile phone.

“You… have light to read, because me I do a lot of reading, so I can effectively read and the battery stores a lot of power on a charge, it does not just go off, you can spend the whole night reading and morning reading.” he says. 

Having light in the evening has had a big impact on his children as well.

“In terms of their academic performance, they have greatly improved because they have access to clean light energy which does not spoil their eyes.”

MKOPA estimates their system saves customers around $750 over four years

Canadian Jesse Moore is a co-founder of MKOPA, the company behind the technology.

He says the main reason for building the platform was to save money.

“In Kenya, Uganda and Tanzania, on an annual basis, there is about $4bn spent on kerosene, batteries and phone charging,” he says. 

“Our average customer, the day before they meet us, would be buying kerosene on probably a daily or sort of bi-daily basis. To the clip of about $0.50 a day, they would buy a half litre of kerosene and burn that at night for lighting.

Solar powered equipment being sold by a Sunny Money agent. Photo: Corrie Wingate Photography/SolarAid on flickr

“And in addition to that $0.50 a day, they would also spend a little bit of money to charge their cell phone at a shop. That might cost them another $0.09 or $0.10 a day. And then finally, they’d buy radio batteries.”

In the end, says Mr Moore, this adds up to over $200 a year per household.

The MKOPA III Solar Home System includes a panel, a battery pack and two lights, a torch, chargeable radio and five mobile phone charging ports.

After paying a deposit of $35 dollars the system can be installed. This is where mobile phone technology embedded in the product comes into play.

All payments are made using mobile money - funds sent by text message held in virtual mobile wallets, without the need for a bank account. 

At the other end of the spectrum lies this solar power plant in South Africa. Photo: Kashif Pathan on flickr

In Kenya MKOPA uses MPesa. Small regular sums are sent which trigger an SMS to the sim card embedded in the solar system, switching it on until the next payment is due. If that doesn’t arrive, the equipment shuts down. 

This continues until either a customer returns the equipment in exchange for their deposit, or the debt is paid off.

For Mr Ogutu, this was crucial in making this type of technology accessible.

“The terms and conditions of paying it was friendly, because it was staggered over a long period of time, if you were to buy this in cash it would have been very, very difficult.”

MKOPA now has systems in over 250,000 homes in Kenya, Tanzania, Uganda and Ghana, thanks in large part to mobile money.

“There is no way we could feasibly collect this much cash in small increments,” he says. 

“We collect close to a million payments a month. But the average payment coming in would be just a couple of dollars’ worth. So you can imagine the challenge of collecting $3m in a million increments of $3.”

Elizabeth Mukwimba with the solar system fitted in her home in Tanzania by Off Grid Electric. Photo: Russell Watkins/DfID on flickr

Off Grid Electric is another company providing solar technology on a pay as you go basis using mobile money, this time in Tanzania and Rwanda. They also provide financing for TV sets and radios that can be used with their MPower systems.

German company Mobisol is also active in both Tanzania and Rwanda. They offer packages of varying size, with the largest able to power multiple lights, a laptop or TV, and a refrigerator as well as charging up to ten mobile phones.

Nova Lumos is working to a similar principle in Nigeria, while in Senegal Oolu lets customers pay in different ways, giving those that pay by mobile money through a tie up with Orange Money a discount.

“For traditional consumer credit mechanisms, the size of credits needed for solar energy systems is too low compared to the transaction costs of providing the loans and collecting the payments,” says Koen Peters, executive director of industry group GOGLA

“Mobile money ecosystems are a cheap and effective way to collect payments from customers, at any time or place. This contributes greatly to reducing the overall costs and risks of providing households with an energy system on loan.”

As well as saving money and lives by reducing pollution in the home, putting solar power into Africa’s off grid homes has other benefits.

Making injera in Ethiopia. Being exposed to smoke from a cooking fire day in day out can lead to serious respiratory illness. Photo: Rod Waddington on flickr

The risk of fire is hugely reduced - and having a solar torch means going outdoors at night is less hazardous.

Children are able to do their homework in peace - while women find it easier and safer to cook and complete household tasks at night. 

Solar energy has massive potential on a continent with so much sun. The US government’s Power Africa initiative plans to double access to electricity across sub-Saharan Africa over the next five years, despite having got off to a bumpy start.

And in October, the UK announced the Energy Africa campaign just ahead of 2015′s  International Off Grid Lighting Conference and Exhibition (IOGLC).

Meanwhile the list of solar start-ups gets ever longer, as more companies try to find ways to create opportunity from such a large and underserved market.

But for Mr Ogutu at home in his village 30km from Kisumu it is far more than this. 

Bringing clean, reliable light to the long Kenyan night means more money in his pocket, a better future for his children Humphrey and Gloria, and more quality time with his family, his wife and his books - no matter how dark it gets outside.

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