Coho Solar

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Overview

Eliminating the cost of switching to clean energy for low-income households in developing countries

Overview

Headquarters: San Francisco, Hong Kong
Established: 2010
Impact Areas: Guatemala, Philippines
Type: For-Profit
Energy Sectors:
Business Model Types:
Staff Size: 5
Annual Budget: $300,000
Major Funders: Haddock Invention (incubator)
Awards (Haddock Invention):
  • 2008: CurryStone Design Prize Finalist
  • 2009: Inc Magazine 30 under 30
  • 2010: Rolex Awards for Enterprise Finalist

ABOUT

Coho Solar, a spin-out of Haddock Invention LLC, harnesses the existing and widespread use of disposable batteries for energy, but replaces them with clean products: our solar battery recharger for small shops (to displace existing disposable batteries), our all-in-one home charger, and our high quality, $5 light & mobile charger.

 

Energy Products/Services

  • Solar-rechargeable batteries
  • All-in-one consumer charger which can charge a battery or a mobile phone, or power a light, depending on the attachment used.  The appliance can use grid power or an add-on solar panel.
  • Pro-Charger kit for small shops selling Coho recharges as a service

Target Market

  • Coho’s market is in peri-urban and rural areas, particularly focused on low & middle- income families in Guatemala, the Philippines, Pakistan, and other developing countries who have limited or no access to conventional grid electricity.
  • These families get their lighting from a combination of candles, kerosene, and flashlights.
  • They have at least one mobile phone per family.
  • Collectively they buy over 10 billion single-use batteries per year.
  • Other sources of energy such as solar energy and home systems are available in some of these areas, but the entry costs are prohibitive.

 

Coho Solar

Revenue Streams

  • Sale of products to shops and consumers

Value Proposition

  • For 15 cents, a family rents a solar recharged battery from the local grocery store.
  • The individual customer instantly transforms her battery powered device into a solar powered device.
  • Coho’s solar-recharged batteries are 4x the performance (energy per dollar) of existing disposable batteries.
  • In addition, Coho’s range of high-quality household appliances are a low-cost alternative to existing competitors.
  • For example, Coho’s room light can retail at $5 to the customer with traditional commercial retail channel margins included.

Problem Addressed

  • High financial and environmental costs of traditional batteries

Where They Are Now

Impact to Date

  • 100 families benefiting from low-cost solar energy
  • Five product pilots in Guatemala with innovation and distribution partners

Milestones

  • 2010: Entered pilot in three communities in Guatemala
  • 2011: First community in the world entirely on solar recharged batteries (Las Luces)
  • 2011: Production ready

Growth Plan

  • 2011: First 200 shop solar chargers and 4000 lights/mobile chargers installed
  • 2013: Breakeven with 6000 shop solar chargers and 120,000 appliances sold
  • 2015: 2 million families with Coho Solar clean energy; US$20 million annual revenue

How They Deliver

Product Sourcing & Design

  • Batteries and chargers are currently produced in mainland China, but Coho hopes eventually to source some components in their destination countries.
  • Coho believes that the advantages of manufacturing in China are decreasing as the price of labor rises.
  • It now makes more sense to do assembly in distribution countries such as the Philippines or Guatemala, where Coho sells, which allows Coho to save on duties and fit more components into each shipping container.

Distribution

  • Coho is initially distributing through several social enterprises that focus specifically on microfranchised distribution, including Hapinoy in the Philippines and Community Enterprise Solutions in Guatemala.
  • Coho sells chargers and batteries to these distribution partners in large quantities (around 1,000 units), who sell them on to their franchisee entrepreneurs at a margin.
  • The franchisees sell the batteries to customers, who return the shop to recharge them.  They also sell Coho energy products powered by the batteries, though the the batteries will work in any device that uses AA batteries.
  • Distributors are responsible for providing financing and warranty support.
  • Once Coho has their distribution chain set up, they plan to add higher end products to it.

Revenue & Affordability

  • Coho’s revenue model has evolved over time.
    • Initially they tried loaning their battery chargers to the entrepreneurs, who only had to purchase the batteries.  The entrepreneurs then paid half their ongoing profits to Coho.  This meant less up-front revenue for Coho but more over time, basically in-house financing.
    • However, Coho discovered that the costs and logistical challenges of collecting the payments and maintaining a relationship with the entrepreneurs were too high to be worth it.
    • Therefore, Coho shifted to the current model, where the entrepreneurs buy both the charger and the batteries and collect all ongoing revenues themselves, and let the distributors be responsible for financing if necessary.
  • End users buy the batteries for half the price of ordinary AAs, and then bring them back to recharge when empty.
    • This creates the equivalent of a financing model for the customers, and the entrepreneurs selling the batteries cover their costs after approximately 20 recharges.
    • This revenue model is also easily understandable to entrepreneurs in most developing countries because they are already accustomed to selling customers glass bottles which must be returned.
  • Coho has not had a problem with customers not returning batteries, and sometimes shopkeepers take a deposit.

 

Financing

  • Coho is currently financed by its founders, and by its parent company, Haddock Invention, and is trying to grow organically.
  • Coho is potentially interested in debt or equity, but its founders have specifically focused on trying to build a product they can manufacture with their own money, starting with a small production run of 1,000 chargers, 1,000 lights, 1,000 mobile chargers, and  5,000 batteries, and manufacturing more with the profits from their sale.

Scaling

  • Coho has found approximately 20 organizations around the world with microconsignment distribution models and plans to target them as potential scaling partners.

Battery Charger

Description:
Battery charger powered either by grid electricity or a solar panel. Charges 2 batteries at a time.Coho also sells rechargeable batteries, as well as lights and mobile phone cords which can be powered by the chargers.How It’s Used:

The chargers are sold either to consumers who use them independently, or to shopkeepers who rent out the batteries to customers who bring them back for recharging.  The rental scheme serves as a form of financing, allowing consumers who can’t afford the charger to pay for their electricity over time.

Product Type:

Rechargeable

 

Technical Data

Lumens/Watt:  60
Average Lamp Power and type:  .5W LED
Battery Capacity and type: 1200 mAh NiMH low self-discharge
Hours Runtime/Charge: Solar light runs 12-40 hours on 3 batteries, depending on setting. Generally the batteries are recharged twice a week.
Charging Hours from Flat:  Charger handles 2 batteries in 2.5 sun hours, Shops charge 4 per day.
Lumens:  30
Lumen-hours/year@4hr/day:  43,800
Service Delivered (lm.hr/$):  2,365
Kerosene Service Delivered (lm.hr/$):  872

 

Cost Data

Number of Households Served  1
Upfront Cost
Estimated Retail Price:  Charger: $22, Batteries: $1.60 each, Light and mobile charger: $5
Recurring Costs
Recharge Cost (Shops): $0.15
Recharge Frequency: 0.5 weeks
 Replaceable Products Life(years) Replacement Costs
Battery  2.5  $1.60
5-year Replacement Costs  Consumers with 2 batteries: $6.40
5-year Ownership Cost Consumers with own charger, light, and 2 batteries: $34.40
Consumers charging 2 batteries biweekly in shop:    $97.60

 

 

Other Products

Current products consist of:

  • Battery charger
  • Rechargeable batteries
  • Light attachment for charger
  • Mobile phone charging attachment for charger
  • Solar panel attachment for charger

 

More Resources

Online Resources

Contact Information

Kwun Tong Industrial Building
472 Kwun Tong Road
Unit F, 8/F, Phase 1
Kwun Tong
Hong Kong

(US: +1 617 297 2724
Hong Kong: +852 9728 4089
* info@cohosolar.com