Solanterns

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Overview

Replacing 1 Million Kerosene Lamps with Solar Lanterns

 

Overview

Headquarters: Kenya
Established: 2009
Impact Areas: Kenya
Type: For Profit
Energy Sectors:
  • Power source: Solar Power
  • Power use: Off-grid lighting and electricity
Business Model Types:

 

Staff Size: 5, 2 volunteers
Annual Budget: $250,000
Major Funders: Friends and family
Awards: 2010 UNEP SEED Award

2011 NASA Launch Award

2011 Finnish Government supported Energy and Environment Partnership Award

ABOUT

 

Energy Products/Services

Target Market

  • 6 million households in Kenya without access to grid electricity, currently paying about $0.20 per day for kerosene.

 

Solanterns

Revenue Streams

  • Sales of energy products through retailers and MFIs
  • Grants and Donations

 

Value Proposition

  • Unlike product manufacturers who are focused on product technology and manufacturing, Solanterns is focused on the challenge of accessibility and effective distribution.
  • With an innovative business model that empowers individuals to purchase lanterns by setting them up directly with a microfinance institution, Solanterns can be confident that they will reach their target market.
  • Besides microfinance institutions, Solanterns leverages cooperatives and community savings groups to make solar lanterns affordable to off-grid households.
  • Solanterns brings value to the households it serves by providing them with a cheaper alternative to kerosene, as well as a much cheaper and more convenient way to charge their phones.
  • Solanterns offers an economic opportunity to the local retailers and financial institutions it operates through.

Problem Addressed

  • 23% of households in Kenya are currently without access to grid electricity.
  • This means that 77% of the population must resort to using kerosene to light their lamps. Kerosene not only poses serious health, safety, and environmental risks, but is also expensive.

Where They Are Now

Impact to Date

  • Provided clean energy to over 50,000 people
  • Saved off-grid households over $1.3 million in kerosene and cell phone charging costs

 

Milestones

  • 2012 Proved new business model through partnership with microfinance institute
  • 2012 Distributed 10,000 lanterns in 3 years

Growth Plan

  • 2012 5 financial intermediary partnership agreements signed and operational
  • 2013 Reach financial sustainability
  • 2014 400,000 lanterns sold

How They Deliver

Product Sourcing & Design

  • Solanterns’ signature products, the SUN KINGTM  and the SUN KING PROTM, are designed and manufactured by Greenlight Planet, Inc.
  • Greenlight Planet is based in India and manufactures in China

Distribution

  • SUN KING lanterns can be bought directly from Renewable Energy Ventures Ltd (Solanterns is an initiative of REV ltd) or from one of the 27 retailers throughout Kenya.
  • Because retailers must charge an upfront cost, Solanterns is developing their distribution model in which lanterns are sold instead through a microfinance institution, with the loan agent as the final link to the customer. This incorporates affordability into the distribution model.
  • Leveraging existing financial and retail intermediaries helps Solanterns achieve growth more quickly.

Revenue & Affordability

  • The market in Kenya that Solanterns targets is already paying roughly US$0.20 per day for kerosene. When calculated over its payback period, the Solanterns light will cost only US$0.02 per day.
  • Although this is certainly financially prudent in the long term, the price of the lantern is too high for most families in rural Kenya to pay up front. To address this problem, Solanterns works closely with microfinance institutions, cooperatives, and community savings groups to ensure that people who want lanterns and qualify for a loan can get them.
  • These groups allow off-grid households to pay monthly costs that are lower than the current monthly cost of lighting and cell phone charging.

Financing

  • Solanterns is funded by a combination of grants and earned income from product sales.
  • The goal is to break even in 2014 and become cash flow positive in 2017.

Scaling

  • Solanterns is interested in expanding their base of microfinance institutions that catalyze the sale of lanterns, as well as offering their product at more branches within each MFI.
  • The goal is to be selling approximately 80,000 lanterns by 2017.

Social Impact

  • Impact is measured in terms of number of people served, cash savings for off-grid households using SUN KING lanterns, and number of lanterns sold.

More Resources

Online Resources

Contact Information

Kenya
Renewable Energy Ventures (K) Ltd.
The Solanterns Initiative
P.O.Box 10644
00100 Nairobi, Kenya

( +254 20 359 5602, +254 704 366 990

United States
Senasys
704 Bartlett Avenue
Altoona WI 54720
( +1 715 831 6353

*  info@africarenwables.com