Nuru Energy

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Overview

Low-cost efficient pedal-powered lights recharged by microentrepreneurs

Overview

Headquarters: Kigali, Rwanda
Established:  2008
Impact Areas: Rwanda
Type: For-Profit
Energy Sectors:
Business Model Types:
Staff Size:  20
Annual Budget: N/A
Major Funders:  Bank of America – Merrill Lynch
Awards: 2008: World Bank Lighting Africa
2010: UNEP Sasakawa Prize, UNDP/ICC/IBLF World Business and Development Award, Global Social Enterprise Competition Grand Prize, Tulane University Business Plan Competition,  William James Foundation, St.Andrews/ConocoPhilips Prize for the Environment (runner-up), Villgro Wantrepreneur Award, MIT Clean Energy Prize (Semi-Finalist)
2011: AECF REACT award winner, EBay Foundation/Ashoka “Powering Economic Opportunity” Award, Ashden Awards (Finalist), Financial Times Sustainable Banking Award (Special Commendation) – shared with Bank of America, Atmosfair India R.E. Innovation Award, REEEP Award (8th Grant cycle), SIDA Innovations Against Poverty (IAP) Award, CIO100 PlusOne Award- Energy, Oil, and Gas
2012: Zayed Future Energy Prize (Finalist)

ABOUT

Nuru Energy has developed a rechargeable light and pedal charger. Microentrepreneur shopkeepers buy a charger and set of lights which are sold to shop customers, who then pay to have the lights recharged with the generator.

 

Energy Products/Services

  • Nuru Light (NL1)
  • POWERCycle Charger
  • POWERGrid Charger
  • POWERSolar Charger
  • Nuru Energy MobileCharger

Target Market

  • Rural people with no grid power or unreliable grid power in East Africa and India

 

Nuru Energy

Revenue Streams

  • Sale of Products through microentrepreneurs
  • Recharge Fees
  • Carbon Credits – eventually

Value Proposition

  • Nuru’s model takes advantage of the benefits of a pedal charged product vs. a solar one (much less charging time per hour of light, much cheaper) but also overcomes the challenge that customers don’t like to pedal.
  • Because they are paid to pedal, the entrepreneurs see it as an income-generating activity, which reduces the stigma.
  • It also comes to resemble other common shopkeeper tasks, like milling.

Problem Addressed

  • Lack of access to clean, bright, affordable light by off-grid population.
  • High cost and charging time of solar lights
  • Poor distribution chains

Where They Are Now

Impact to Date

  • 70 entrepreneurs set up in Rwanda.
  • 10,000 lights sold

Milestones

  • 2008: Received seed funding from the World Bank for $200k (won grant)
  • 2008: Conducted feasibility study in Rwanda
  • 2009: Pilot/field tests in Rwanda
  • 2010: Reached 70 entrepreneurs
  • 2011: Signed multi-million dollar carbon credit emissions option contract with Bank of America – Merrill Lynch
  • 2011: Expanded into India, Kenya and Uganda

How They Deliver

Product Sourcing & Design

  • Nuru Energy’s founder, a former Silicon Valley electrical engineer, got interested in hand-crank rechargers while working with Freeplay Energy, which sells consumer-cranked lights and radios.
  • It then occurred to him that a model where the cranking was done by an entrepreneur rather than an end-user might be successful, as it creates less work for the end-users.
  • The team spent 14 months researching customer needs and designed the Nuru Light as a small, affordable task light which can be used in many ways, and can be attached to other Nuru Lights to create brighter systems.
  • The pedal charger is designed to be used like a bicycle, reducing the stress on the pedaller compared with a hand-crank and creating enough power to fully recharge 5 Nuru Lights simultaneously in 20 minutes.
  • Nuru’s lights are manufactured in China and India.
  • Nuru’s original pedal generator was much cheaper ($50-$70) with no bells and whistles. It required directions to operate, and the entrepreneurs were not reading them, and were breaking their chargers. This led Nuru to develop a more expensive device ($175) which is much simpler to use.

Distribution

  • Nuru Energy chooses entrepreneurs from local cooperatives as microfranchisees. Each sells lights and then charges customers in their community to recharge them with Nuru’s generator.
  • Nuru specifically targets female entrepreneurs to increase the likelihood of the money they earn being used productively.
  • The entrepreneurs generally buy a charger with 20-50 initial lights to resell.

Revenue & Affordability

  • Entrepreneurs usually get financing from Nuru or a Nuru partner MFI to cover the up-front cost of the lights.
  • One powerful element of the model is that because the light needs to be recharged, the costs of the charger and overhead can be paid off over time, reducing the up-front cost for the customer vs. a solar light.
  • Entrepreneurs generally pedal <2 hours/day, and can recharge 5 lights at a time. They generally earn about $2/day on top of other income. Nuru Energy receives a franchise fee for each recharge.
  • Nuru has designed a generator model with a locking mechanism to ensure that the entrepreneurs don’t charge without paying Nuru the franchise fee via the mobile money network.

Financing

  • Nuru has signed a multi-million emissions reduction options agreement with Bank of America – Merrill Lynch. In this agreement, Bank of America – Merrill Lynch has paid Nuru upfront for the right to purchase their carbon credits over the coming decade at a market-pegged price.
  • Demand for Nuru’s products has outpaced its capacity to produce them, so it is seeking capital to expand.

Social Impact

  • Nuru measures its impact based on:
    • Income generated by entrepreneurs
    • Reduction in kerosene consumption extrapolated from number of lights sold
    • Reduction in greenhouse gas emissions extrapolated from the number of kerosene lamps replaced

Scaling

  • When Nuru is looking to expand into a new country, the primary factors are population density, grid access, and potential for MFI partners.

Nuru Light

Description:The Nuru Light is a modular pedal-rechargeable directional LED light. It can be hung or placed on a table or desk, or carried around, or several lights can be put together to form a larger system. It has a 4 position switch for different levels of light. The Nuru Light is rechargeable either by the POWERCycle, a solar panel or grid/AC adapter.How It’s Used:

  • The Nuru Light is designed to be a small, affordable task light for cooking, studying, attending to children after dark, etc. In researching customers, Nuru found that 80- 90% of customer lighting needs are task based.

Product Type:

Rechargeable

Technical Data

Lumens/Watt:  72
Average Lamp Power and type:  .25W LED
Battery Capacity and type:  NiMH
Hours Runtime/Charge:  8-28
Charging Hours from Flat:  20 minutes
Lumens:  18
Lumen-hours/year@4hr/day:  26,280
Service Delivered (lm.hr/$):  3,231
Kerosene Service Delivered (lm.hr/$):  872

Cost Data

Number of Households Served  1
Upfront Cost
Estimated Retail Price of light for customer:  $6
Estimated Cost of Charging Station:  $645 ($150 for generator and $5.50/light for 90 lights)
Recurring Costs
Recharge Cost  $.20 per charge
Recharge Frequency  10 days
 Replaceable Products Life(years) Replacement Costs
Battery  7.5  $3
5-year Replacement Costs  $38.40
5-year Ownership Cost  $44.40

 

Other PRoducts

  • PowerCycle Charger
  • PowerGrid Charger
  • PowerSolar Charger
  • Nuru MobileCharger

More Resources

Online Resources

Contact Information

Nuru Energy
Rwanda:
 P.O. 5345 Kigali, Rwanda
Kenya: P.O. Box 741-00606

* info@nurulight.com