Coldness was, for the first time, a possibility
June 26, 2017 8:40 PM   Subscribe

The African solar power revolution. [SLNewYorker]
posted by Chrysostom (54 comments total) 23 users marked this as a favorite
 
I am kind of side-eyeing the rent-to-own business model. On one hand, it serves a clear need, because many people can't afford to pay the cost upfront. But on the other...
Off-Grid, like several of its competitors, finances the panels, so that people can pay the same small monthly amounts they were paying for kerosene. Customers in Tanzania put down about thirteen dollars to buy Off-Grid’s cheapest starter kit: a panel, a battery, a few L.E.D. lights, a phone charger, and a radio. Then they pay about eight dollars a month for three years, after which they own the products outright. The most popular system adds a few more lights and a flat-screen TV, for a higher down payment and about twice the monthly price. Customers pay their bill by phone; if they don’t pay, the system stops working, and after a while it is repossessed. That scenario, it turns out, is uncommon: less than two per cent of the loans in Tanzania have gone bad.
That's about $288 for the cheapest system and about $576 for their most popular system. I really wonder what the cost is if you buy it outright.

I recently bought a battery and solar panel in Sub-Saharan Africa for around $140. It's probably comparable in power to their $576 option. If I added in the cost of a TV it would be around $220, perhaps. Of course, prices are different between countries, so this might not be a good comparison.

Something feels kind of ... uncomfortable... about the idea of a lot of Western venture capital setting up rent-to-own businesses in Sub-Saharan Africa. They're notoriously exploitative in the US.
posted by Kutsuwamushi at 9:36 PM on June 26, 2017 [19 favorites]


Rent-to-own is a pretty awful scheme for a variety of reasons but it seems like it works a lot better in this instance then it does in the United States where it basically just scams the poor and veterans. Truly evil.
posted by koavf at 9:44 PM on June 26, 2017 [2 favorites]


it seems like it works a lot better in this instance

Well, we know works in the sense that people will pay and at least in some places the default rates are low. But we're not really given the information to evaluate how exploitative they are, because the article doesn't even consider it. The author doesn't seem to be aware that the rent-to-own business model already exists elsewhere and has problems.

I am really skeptical of a lot of stories about foreign investment in Africa, especially because people seem to be especially uncritical of anything that seems like "development." E.g. people seem really concerned about the fees for mobile cash services when talking about their adoption in the US, but in Africa, it's exciting! Nevermind that these are often people who can least afford the fees, and who I hear grumbling about how the fees are unfair quite often.

$576 is really a lot of money.
posted by Kutsuwamushi at 10:15 PM on June 26, 2017 [15 favorites]


I saw tangentially a solar-powered light rental scheme thingy in western Kenya; it actually seemed pretty great. The cost was the same as kerosene that people were buying anyway (no more exploitative than the old model), but without the poor health and safety side effects of burning things indoors.

That said, it was a pretty small-scale operation, and it's well worth it to be critical of international groups trying to scale this kind of thing up. Microloans have not turned out to be universally beneficial, in particular...
posted by kaibutsu at 11:19 PM on June 26, 2017 [2 favorites]


Western European foreign direct investment (FDI) in Africa is much bigger than the US' share, but is not mentioned in the article at all. Chinese investments are much smaller, but have gotten a lot of press lately. The Chinese invest mostly in infrastructure, as far as I know, distinctly different from the bulk of American investments (at least according to the article).
posted by Harald74 at 11:35 PM on June 26, 2017 [1 favorite]


The article mentions a similar kerosene savings example. A woman who was spending $30 a month on kerosene and he said he could do a lot better for $30. I'm generally against most schemes that aren't the consumer gets the goods no strings attached because of the potential for exploitation, but the consumers in question are already consumers. I'd prefer even greedy solar companies profit than greedy oil companies, if it's also bringing quality-of-life improvements.
posted by Peter B-S at 11:37 PM on June 26, 2017 [6 favorites]


Rent-to-own is a pretty awful scheme for a variety of reasons but it seems like it works a lot better in this instance then it does in the United States where it basically just scams the poor and veterans.

You know this is how we all buy cars and houses in the West right? Car dealerships offer financing because it smooths out their income, same as these business owners. People are buying these because the price works and they want them, same as people anywhere. Kerosone smoke is awful and it's a terrible fire hazard too so this is probably quite an improvement for folks as a power source in terms of quality of life.
posted by fshgrl at 12:48 AM on June 27, 2017 [14 favorites]


What those figures tell me is that a donated solar power setup costing $140 will save the recipient $360 in the first year alone, and continue to provide savings and quality-of-life improvements for some years to come. What sort of multiplier does that equate to – 10:1? More? I think it's extraordinary that there isn't a better way of doing this.
posted by Joe in Australia at 2:31 AM on June 27, 2017 [1 favorite]




What those figures tell me is that a donated solar power setup costing $140 will save the recipient $360 in the first year alone,

Yes, but...
Because many of Off-Grid’s potential customers have experience with bad products, or know someone who has, the company takes extra steps to build trust with its clients. After an Off-Grid installer shows up on his motorbike, he opens the product carton with great solemnity; in an Ivorian village, I watched along with seventeen neighbors, who nodded as the young man held up each component, one by one. He then climbed onto the roof of the house, nailed on a solar panel about the size of a placemat, and used a crowbar to lift up the corrugated-tin roof to run the wire inside. He screwed the battery box to the cement-block wall and walked the customer through the process of switching lights on and off several times, something the man had never done before. The company also offers a service guarantee: as long as customers are making their payments, they can call a number on the box and a repairman will arrive within three days. These LightRiders, as the company calls them, are trained to trouble-shoot small problems. They travel by motorcycle, and if they can’t make repairs easily they replace the system with a new one and haul the old unit back to headquarters.
What happens if your donated solar power setup goes belly up?
posted by Mister Bijou at 3:33 AM on June 27, 2017 [29 favorites]


We'd have to know the interest rate to know how exploitive this is. My mortgage has a 2.5% interest. I don't know about car loans, but a credit card charges around 24% now. Rent-to-own furniture and appliances can be as high as 300% interest. The question is, is the company making its profit on the actual sale of the equipment, or on the interest charged? Off-Grid sounds like it is still working out its optimum charges, and they have to cover the expense of free repair. I wonder how affordable repairs are after the systems are paid for.

My question, though, is how Off-Grid's systems "stop working" if the bill isn't paid. How can they be remotely disabled if they are off-grid? It would make me nervous to think that the company can disable my product even after the equipment is paid off.
posted by Miss Cellania at 3:56 AM on June 27, 2017 [2 favorites]


One would hope that they'd SMS users monthly unlock codes and then a final permanent unlock code, so that there is no way of remotely disabling the unit, just local enabling, with the final payment triggering outright ownership granting full control. Whether that's actually the approach they've taken is another matter.

I also noted that repair service is contingent on the bill being paid. What happens once the equipment is owned outright? Is there a lifetime guarantee? If not, what is there?
posted by howfar at 4:41 AM on June 27, 2017 [1 favorite]


What happens if your donated solar power setup goes belly up?

What are the odds that a modern solar cell and lights break before the payback period of 5 months? Pretty low, I bet; I stuck a bunch of cheap integrated solar garden lights in my garden and forgot about them. Most of them were still working five years later. So I guess in most cases the owner would buy a replacement with the kerosene money they saved. It's certainly possible that some will break, but that sounds to me like scaremongering from a business that earns $576 in fees from a setup that costs $140.
posted by Joe in Australia at 4:52 AM on June 27, 2017 [3 favorites]


Car dealerships offer financing because it smooths out their income, same as these business owners.

Financing makes up more than 20% of car dealership profits and has about 7X the gross profit margin of actually selling cars.
posted by srboisvert at 5:02 AM on June 27, 2017 [1 favorite]


This 'just buy a cheap solar kit yourself" post also assume the buyers have the knowledge, cash and access to just buy a cheap solar kit themselves. I'm sure if they did they would.

It does suggest a business opportunity though for local entrepreneurs to undercut the leasers but they too would need the upfront capital.
posted by srboisvert at 5:06 AM on June 27, 2017 [5 favorites]


Car dealerships offer financing because it smooths out their income, same as these business owners.

Financing makes up more than 20% of car dealership profits and has about 7X the gross profit margin of actually selling cars.


I have bought cars from dealers with money acquired elsewhere, and the dealers were disappointed that I wasn't using their financing, and would pay them all at once.


Is there a lifetime guarantee?

That would be a foolish business model, since the panels and lights have finite lives. From my experience with LED lights and solar components other than the panels, even a 10-year warranty might cost the business money.
posted by Kirth Gerson at 5:25 AM on June 27, 2017


This 'just buy a cheap solar kit yourself" post also assume the buyers have the knowledge, cash and access to just buy a cheap solar kit themselves. I'm sure if they did they would.

I don't think anyone is saying "just buy a cheap solar kit yourself." I'm not even saying the rent-to-own model should be replaced. What I'm saying is that I'm wary because it is frequently exploitative and the prices given seem high, but the article doesn't tell us what we'd need to know.

But as a side note: If the areas where these businesses operate are anything like where I live, people know what solar panels are and how they work. Vendors will explain the specifics - or, they can ask someone in their community who has one. There is usually already at least one guy in unelectrified villages with a solar panel - often he has a small bar or shop, and you can pay to recharge your phone there.

The cash to buy these systems upfront is the real issue. The average per capita income here is less than $800.
posted by Kutsuwamushi at 5:51 AM on June 27, 2017 [4 favorites]


It's a classic case of a mass market with upfront costs too great to create the market at a sustainable size. There are many of these, but the ones I know best are in technology, such as gaming and mobile phones, or in earlier times white goods, TV, VCR and radio rentals. If the market doesn't defer costs in some way, there is no mass market.

There are advantages to the consumer beyond the creation of an accessible market in the first place. Rent, or rent-to-buy, maintains the vendors' interest in the goods or services, so you can expect some of the recurring costs to fund guarantees and maintenance. It's easier to refresh and upgrade by rolling over the contract for newer products, which in turn drives market development. Also, expert consumers and third parties can take advantage of edge cases in the market - things becoming 'obsolete' en masse and being dumped, canny use of promotional or start-up deals, and so on, because a true mass market will result in considerable economy of scale in production costs and these can't be entirely isolated through channels.

There's also the chance for profiteering through cartel practices, channel control, onerous contracts and so on. It's not the market per se that's unduly exploitative, it's the regulation - or lack of it - and that's a proxy for governance in general.
posted by Devonian at 5:52 AM on June 27, 2017 [3 favorites]


What those figures tell me is that a donated solar power setup costing $140 will save the recipient $360 in the first year alone,

So how much money are you donating for solar power setups? If you're only donating $14,000 a year, that's a hundred solar power rigs.
posted by happyroach at 6:09 AM on June 27, 2017 [2 favorites]


I'm thinking some of the back-and-forth about leasing vs buying outright comes from not reading further into the article. For example:
“What you see in this space is at least eight to ten decent-sized pay-as-you-go solar companies, all trying to parse through what the actual end price to the customer really is,” Peter Bladin, who spent many years in leadership roles at Microsoft and now invests in several of these firms, told me. ... Lacking that established financial architecture, companies in sub-Saharan Africa are constantly experimenting with different plans: Off-Grid began by offering ten-year leases, but found that customers wanted to own their systems more quickly, and so the payments are now spread out over three years. PEGAfrica customers buy their system in twelve months, but the company gives them hospitalization insurance as a bonus. Black Star is a true utility: the customers in the communities where it builds microgrids will always pay bills, but the charges start at only two dollars a month. (The business model depends on customers steadily increasing the amount of energy they buy, as they move from powering televisions to powering small businesses.) Companies like Burro—a Ghanaian outfit launched by Whit Alexander, the Seattle entrepreneur who founded Cranium games—sell lamps and chargers and panels outright, saving customers credit fees but limiting the number of people who can afford the products.
The article also notes that even at these prices, the companies require high-risk capital and infusions of money from foreign aid programs.
posted by Dip Flash at 6:31 AM on June 27, 2017 [4 favorites]


The article mentions a similar kerosene savings example. A woman who was spending $30 a month on kerosene and he said he could do a lot better for $30. I'm generally against most schemes that aren't the consumer gets the goods no strings attached because of the potential for exploitation, but the consumers in question are already consumers. I'd prefer even greedy solar companies profit than greedy oil companies, if it's also bringing quality-of-life improvements.

climate change? might affect me, fix it fix it fix it!

exploiting the global poor? nooooo problem
posted by indubitable at 6:49 AM on June 27, 2017


climate change? might affect me, fix it fix it fix it!

exploiting the global poor? nooooo problem


Christ. Some people on the left have such disdain for markets and no respect for people in poor countries and their choices that they would prefer the billions lifted out of poverty to go back to the way they used to live.

Many of these people want easy access to off grid solar energy. Typing away on some website that they are ipso facto being exploited is gross.
posted by MisantropicPainforest at 7:15 AM on June 27, 2017 [28 favorites]


And, tbf, it's not like climate change isn't already actually killing the global poor at a rate that will accelerate by the year.
posted by howfar at 7:16 AM on June 27, 2017 [2 favorites]


I don't think anyone is saying "just buy a cheap solar kit yourself." I'm not even saying the rent-to-own model should be replaced. What I'm saying is that I'm wary because it is frequently exploitative and the prices given seem high, but the article doesn't tell us what we'd need to know.

This. Like it's great that villagers can get more for their money than paying for kerosene and batteries but at the same time, if they're paying $30/mo for something and $20/mo is profit it seems like a giant dick move. If the capital owners only charged the villagers $12/mo and took home $2/mo in profit the situation there would be vastly improved rapidly rather than a slow advancement from the status quo.
posted by Talez at 7:39 AM on June 27, 2017


Except there aren't many ways to simply give systems away, at cost. They require upkeep. A spare parts network. Technicians. A distribution and financing model. All of that stuff costs money. And by building a local company you're ensuring that it can keep operating, and won't just dry up and blow away when donor money runs out.

There are huge risks to doing business in some of these countries, and the government and power monopolies are useless. If you're giving people better service and better lives for less money then you're helping them. And if the profit incentive is what's making this happen then so be it. It's certainly better than the fat lot of nothing that was happening before.
posted by 1adam12 at 7:43 AM on June 27, 2017 [10 favorites]


I think the hand-wringing about the business model is a bit misplaced and paternalistic.

People in Africa aren't idiots ripe for exploitation; if they are offered a product they are perfectly capable of deciding for themselves whether it's a good choice for themselves. See the article's paragraphs about solar having a bad reputation because of crappy products.

What's really exciting about this solar model is it's fully distributed and doesn't require a functioning balanced power grid. You can sell direct to power users and stitch them together into a grid later. This makes it possible to actually offer electricity as a product to individuals. Traditional electrification is an enormous, expensive centralized project for a whole country. Local solar offers an alternative way.

Even decentralized, electrifying Africa is an enormously capital-intensive project. Something's got to pay for it. Foreign aid and donations will take forever; selling power as a business will work much faster. Debt financing is one way to put capital to work in an economically realistic way.

Some more reading on off-grid solar from The Economist: Africa unplugged, an overview of the industry from a year ago. And Cheap illumination’s benefits in remote areas may be limited is a dose of pessimism from a study on solar in India.
posted by Nelson at 7:45 AM on June 27, 2017 [13 favorites]


Except some of them are, Nelson. Just like some people in America are. Anyone who has a passing knowledge of the brutal exploitation models of payday loans and the recent wave of bottom feeding car lots, both of which use a loan as a hook to strip the victim of all assets, should twitch at the mention of venture capitalists being involved.

It doesn't mean that everyone involved here is exploitative, and to some extent incorporating a high overhead may be necessary to deal with multi-year loans in a unstable economy, but there's plenty of room for it. Electricity can quickly become a necessity -- your new store may depend on it, your kids may depend on it, you may no longer have easy access to a phone charger, etc -- and someone who has made payments for two years of three on a system is extremely vulnerable to being held over a barrel by sudden extra 'fees' that count on the customer being afraid to lose the large amount of capital they have invested at that point.
posted by tavella at 8:24 AM on June 27, 2017 [3 favorites]


I think the hand-wringing about the business model is a bit misplaced and paternalistic. People in Africa aren't idiots ripe for exploitation; if they are offered a product they are perfectly capable of deciding for themselves whether it's a good choice for themselves.

People make this exact same argument in defense of predatory businesses in the US, whenever someone criticizes them or suggests regulation. It's frustrating, because it treats criticism of the choices available to poor people as if they're criticism of the choices poor people make. They're not the same.

Africans are not and have never been idiots. But there's a huge history of exploitation here nonetheless, and it's ongoing.
posted by Kutsuwamushi at 8:40 AM on June 27, 2017 [11 favorites]


Just this month, USA Today explored how truckers at the Port of Los Angeles find their lives destroyed by companies using 'pay as you go' loans to turn them into indentured servants. Do you think all truckers are "idiots ripe for exploitation"?
posted by tavella at 8:48 AM on June 27, 2017 [1 favorite]


Electricity can quickly become a necessity

Looks around room at things plugged into walls...
posted by Mister Bijou at 8:58 AM on June 27, 2017 [2 favorites]


Imagine if we didn't give military aid to nations, and gave them solar and infrastructure aid instead. When I read the Koch brothers, have 300-400 million to give away for political malfeasance, instead of fixing the world, it just makes me shake my head and have deserved doom thoughts about our species. The world at large it doesn't make environments, but environments exist and life fills them. Best to those guys electrifying Africa. A curse to those who bring expensive water, and the schemers looking for the next quick buck.
posted by Oyéah at 9:16 AM on June 27, 2017 [2 favorites]


tavella: It's a model already at work in South Africa, too.

I used to build hydro infrastructure for a living, and some of the folks I worked with were talking about getting involved in some more traditional projects in Africa (I want to say in Kenya, but I may be mis-remembering). The challenges were enormous, but they wouldn't have been talking about it at all if the profits weren't going to be even bigger, way more than what we were making here. There was no talk of intentional exploitation, but there were a lot of assumptions being thrown around, and I didn't want to be involved for a whole host of reasons. (I now work in a different industry, and afaik nothing came of the talk and none of my former colleagues are involved in overseas projects.)
posted by Fish Sauce at 9:25 AM on June 27, 2017 [1 favorite]


I think that what needs to be reconciled are the need to move a huge amount of capital quickly with the need to act in an appropriately sustainable and ethical manner. Markets are exceptionally good at the former, and exceptionally bad at the latter. Ultimately worrying about the particulars of this or that company's practices is irrelevant - because, without proper regulators, exploitation just will happen. So I guess my response to this is that it's cool, and I'm willing to assume that none of these people are monsters, because they need regulating anyway, so the question is how we start finding ways to support and enforce that kind of regulation.
posted by howfar at 9:38 AM on June 27, 2017 [2 favorites]


Imagine if we didn't give military aid to nations, and gave them solar and infrastructure aid instead.

Military aid is a fraction of the aid received by sub-saharan African nations. Shifting all military aid towards other types of aid would do almost nothing. Moreover, states that receive military aid tend to receive more of other types of aid.
posted by MisantropicPainforest at 10:04 AM on June 27, 2017 [1 favorite]


Cheap illumination’s benefits in remote areas may be limited is a dose of pessimism from a study on solar in India.

Even simple lighting can lead to increases in egg production, which seems like a nice boon. But that may be less useful in equatorial regions?
posted by pwnguin at 10:16 AM on June 27, 2017


The paper randomized the deployment of solar units to villages in India, found decreased kerosone use, but they found no social benefits at all. The point isn't that solar isn't good but rather it likely will not going to cure social ills.
posted by MisantropicPainforest at 10:29 AM on June 27, 2017 [3 favorites]


In 2011-2012 I worked for a solar power social enterprise in East Africa as their expert consultant. Among other things, I personally did research on household energy consumption behaviour in two East African countries (Rwanda and Kenya), as well as comparative analysis of four different business models - rent to own, hire purchase, direct sales, store sales - that were piloted (Western kenya, when did you see that solar pilot, kaibutsu?)

Also added, I've got the foundation of a grant funded study that looked at pay as you and prepaid business models among rural households in Philippines, India and Malawi.

Given all of the above, even I'm watching to see what will emerge from this currently trendy space.

The Chinese have entered this market, and have more commercially oriented we treat you like our customer product and payment lines than the white social enterprise doing you a favour approach.

Another year or two should give us the answers. I'll keep my personal and very strong opinions out of this.
posted by infini at 10:32 AM on June 27, 2017 [8 favorites]


but they found no social benefits at all

From that same paper about the Uttar Pradesh, northern India project...
Dr Aklin conjectures that the explanation may lie with the relatively paltry nature of what was offered, which amounted to an hour or two’s extra lighting per day.
posted by Mister Bijou at 10:37 AM on June 27, 2017 [1 favorite]


Metafilter: I'll keep my personal and very strong opinions out of this.
posted by No Robots at 10:37 AM on June 27, 2017 [3 favorites]


“Not one says, ‘I’d like the warm glow of the kerosene lights.’ In fact, when we were designing the L.E.D.s, we focus-grouped lights. And the engineers assumed they’d want a warmer light, because that’s what they were used to. But, no, they picked the bluest, hardest light you can imagine. That’s modernity. That’s clean.”

Also, they hadn't been watching Fox News.

An example of a 'hockey puck' light as mentioned in the article.
posted by Bee'sWing at 10:44 AM on June 27, 2017


An example of a 'hockey puck' light

Brilliant! Thanks!
posted by Mister Bijou at 11:01 AM on June 27, 2017


Yeah, I kinda want one of those.
posted by Bee'sWing at 11:38 AM on June 27, 2017


But I want to hear your personal and strong opinion!!
posted by smoke at 2:02 PM on June 27, 2017 [3 favorites]


Yeah, this seems like a great time for a sockpuppet.
posted by Chrysostom at 2:09 PM on June 27, 2017 [1 favorite]


I'd be interested to hear any opinion that's well informed, strong and personal or not. It's one thing I cherish about Metafilter; we have folks here who've actually worked in a lot of the areas we discuss. OTOH we also have a slightly rigid orthodoxy of opinion and some rough edges sometimes. I apologize if my own words escalated the emotion of the discussion.
posted by Nelson at 2:14 PM on June 27, 2017 [1 favorite]


Alright. I'll RTFA and Nelson's links and come back with a formulated opinion.
posted by infini at 8:35 PM on June 27, 2017 [1 favorite]


Keep in mind, I may leave important bits of underlying frameworks for business model and payment plan design out of my screed, as it pays the rent.
posted by infini at 8:38 PM on June 27, 2017 [1 favorite]


oh good lord. This whole article is a great example of PR, Power Africa promo, and American exceptionalism. The errors of attribution are gross and egregious, starting with calling MKopa an American startup.

Are you sure you want me to continue?
posted by infini at 9:19 PM on June 27, 2017 [3 favorites]


Oh, we're sure.
posted by No Robots at 9:35 PM on June 27, 2017 [1 favorite]


(Disclaimer: This overview of the Kenyan solar power consumer market has not been updated since April 2012. It can only have grown, and prices have only come down. Chinese brands are considered a tradeoff on the price/quality curve, and German technology holds first place in the consumer's mind. MKopa is an experimental platform for learning while doing, in my estimation, even now) and since I don't want to Westphalia, I'm breaking up the text into a few comment boxes

Kenya is currently the largest market for solar home systems on the African continent and second largest in the world, after China, by both annual sales as well as total installed base.

The Kenyan solar home system (SHS) category is considered the most competitive by far, and due to its history and heritage1, one of the most developed, albeit primarily in the informal sector. Historically, the market's roots are the same as that of other markets in the region, with donor supported funding and NGO leading market development in the 1970s, but a combination of factors in the 1990s led to a boom in SHS installations and the industry took off.

These factors include a rise in global prices of Kenyan cash crops like tea and coffee, an emerging rural middle class including farmers and schoolteachers, the spread of radio and television signals all coming together to drive a demand for modern consumer electronics and home appliances at a time when solar home systems were becoming easily available where the electric power grid had not yet reached. Today, there are over 350,000 solar home systems across Kenya and the market is still growing at more than 15% a year.
posted by infini at 9:58 PM on June 27, 2017 [6 favorites]


Markets in flux - rapid rise of low cost technologies

In the past 5 years (this is written in April 2012) however, another set of market forces have been changing the local operating environment. The rise of the ICT industry due to extremely affordable mobile devices and dropping prices of voice and data services is changing the information and communication landscape of the country.

Innovations like Safaricom's MPesa mobile money transfer system and the rise of social networks are connecting beachboys and subsistence farmers alike, to each other and to the rest of the world. Increasingly, a youthful Kenya, whether urban or rural, is going online with the handheld computer in their pocket or purse. Similarly, the advent of ever cheaper technology, increasing penetration by the Chinese and numerous new products across all price points and segments is changing the Kenyan solar market. The price of solar panels has dropped by 60% since 2008(2), turning them into a commodity product with little brand differentiation except for a distinct preference for a "Made in Germany" label over Chinese or even domestic Kenyan. In Chuka, where Kenya's private sector solar market was born in the 1980s, the market has already progressed to second hand sales of SHS as increasing electrification puts grid power within reach of the same middle classes who can afford the connections.

As seen within the ICT industry3, the solar market demonstrates a similar variance in diffusion of innovation across geographies and widely varying rates of adoption. The most popular size of solar panel for an SHS in Makueni region is still in the 15-20W range but averages 30W in North Meru or even 60W+ in the Transmara
posted by infini at 10:00 PM on June 27, 2017 [4 favorites]


Some fundamental changes in consumer behaviour 2004 to 2012

Thus, consumer perceptions of solar power and buyer behaviour have evolved and changed since Arne Jacobson's seminal study4 in 2004 on the social and connective factors influencing the rural Kenyan solar market, findings from which still form the basis of all subsequent consumer market reports for the region5. Significant elements of Jacobson's thesis have been made obsolete by the flux in which the Kenyan industry finds itself today as enumerated in the passage above.

Elements of change include:

●Television was indeed the demand driver for solar home system installations by the emerging middle classes of rural Kenya, with its power to connect people to the rest of the world. However, the unforeseen and exponential growth in the mobile phone industry is rapidly dislodging television's connective value as increasing bandwidth and low data costs offered by mobile service operators tempt people online to connect with the world wide web of humanity. Low service costs and cheap Chinese phones allow the humblest homesteads to proudly possess more than one such device, and have far lower power needs for less frequent charging unlike the daily use of television.

● Dealers and electrical fundis reports show that while Jacobson's observation on modular purchasing patterns, starting with a car battery, remains constant, the emphasis of this first purchase has shifted to household lighting installation. For example, in Makueni, Julius, a senior grade schoolteacher has a 100W panel installed on his roof that powers 9 lights, including the kitchen building and two sensor driven security lights for the compound. He plans to purchase a television set one day but did not sound to be in a hurry.

● Entry level solar home systems powering 4 lights cost just over USD 100, becoming far more accessible down the income stream than previously recorded and consumer awareness of solar power as a source of modern energy is ubiquitous. Jacobson's 2006(6) observation "... rural Kenyan households build their systems over several years through purchases of as little as $50–100 at a time." has been made obsolete by today's pricing standards where a black and white 14" television set can cost as little as $50. Later articles still rely primarily on data collected in 2000, where his "rural cellular telephone customers" still needed at least 200 dollars for a basic phone as opposed to just $25 today.

● Downward price shifts of consumer electronics and upward mobility mean that Jacobson's original target segment has moved on to the acquisition of flat screen Sony Bravias and home stereo systems displayed lavishly in dealerships in more economically developed regions visited. If they are still distant from the electric grid, they tend to purchase solar home systems of 60W and above. This shift is also partly influenced by the Kenyan government's recent move to digital signals.

● Jacobson stated that electric light from solar PV systems played a minor role in supporting income generation activities in rural Kenya, given that during the time of his research it was the rural middle classes who were the primary adopters of this technology. This, too, has changed as affordable SHS power barber shops and hair salons (kinyozis), general stores and rural hotels/bar & restaurants that use lights, music and colour television to attract customers after nightfall.

Thus, it can be said that as mobile phones rapidly overtook radio and television's role as the "connectors" to the outside world even while prices dropped for both phones and for solar, the biggest shift in the market has been the 'democratization' of modern technology among the mass majority of the rural population. Modern energy, in the form of a solar home system, is an accessible aspiration for many, if not already within financial reach for far more than before. This 'democratization', in turn, raises the bar of what an affordable energy solution means among the rural Kenyan population, whether the first purchase is a battery or a solar panel.
posted by infini at 10:07 PM on June 27, 2017 [8 favorites]


There's more, memail me for the full report, this is just the first two pages. I gotta go get ready now for work, I'm writing a report on the rise of informal global trade online among secondhand clothes dealers in Kenya. Still waiting for three more interviews to come in for the analysis for a stealth startup based in London.
posted by infini at 10:09 PM on June 27, 2017 [1 favorite]


Thanks infini!
posted by asok at 5:43 AM on June 28, 2017 [4 favorites]


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