Off-Grid Lighting and Electricity

Home  /  Technologies  /  Power Uses  /  Off-Grid Lighting and Electricity

Desi Power

Overview

There are a variety of benefits associated with having access to energy including health, security, education, and economic productivity. Yet nearly a third of the world’s population lacks adequate power. The power that does exist is dirty and expensive. Grid expansion by many governments in the developing world is slow and unlikely to reach most of these people in the foreseeable future. Similarly, market based solutions are typically too expensive. Enterprises operating in the off grid energy sector supply products that fall into three major categories:

  • Centralized power and lighting systems at the community level
  • Fixed systems powering individual homes and businesses
  • Portable Power Products

Resources

Community Level Power

These systems provide electric power and lighting for entire communities, as opposed to individual households or customers. They are generally delivered by installing central renewable power sources that are either connected to homes through wiring systems (mini-grids) or charge batteries that customers take home. Central generation plants (range 35-120kW), are most often biomass powered, but sometimes use other sources such as hydro, or smaller (1kW) wind/solar generators.

Some social enterprises train communities to maintain systems collectively, but install power through stand-alone solar panels in individual houses , or use rechargeable lanterns owned by a village committee. Central generation systems are usually unaffordable for communities ($10-15,000 for a blueEnergy wind turbine, $200,000 for a DESI Power plant installation). Therefore , these systems are generally funded by donor subsidies or revenue from selling the surplus power the generator produces to other businesses. Lumeter Networks is an enterprise that works with renewable energy suppliers to help monitor energy useage, reduce risk, and combat electricity theft by creating low-cost pre-paid meters that can be incorporated into the system.

Lessons Learned

Delivering power at the community level is much more complex than delivering at an individual or household level. Community-level systems require proper incentive structures for maintenance. Since no individual owns the system, sometimes no one takes responsibility for upkeep. To get around this problem, Sunlabob creates a village committee which owns all lanterns and looks after the charging station. Community-level systems are generally more complex to run than smaller-scale systems, and require extensive community training or village-based staff. To manage this, Husk Power Systems owns its own plants and runs them with paid staff, while Practical Action Peru and blueEnergy use subsidized models to train their community members.

Community-level systems (esp. biomass plants) are large enough to bring the cost per kilowatt much lower than most smaller-scale systems. For example, Husk Power Systems has one of the cheapest costs per kilowatt hour, at US $0.10, making it highly competitive.

Non-subsidized models require enough revenue to run a large, expensive system profitably. Often, village populations do not use enough power to cover costs (many only need lighting 3 hours per day), and installing systems for broad geographies is complex and can overextend enterprises.  There are several methods used by these enterprises  to deal with this “lack” of demand. Husk Power Systems sells products made from rice husk residue and uses its plants as a village-level distribution channel for corporate consumer goods. AVANI is setting up a model to sell excess power to the government grid and DESI Power is partnering with mobile phone towers and large agribusiness. DESI Power also builds local businesses to increase village power use. Lastly, many of these enterprises sell carbon offsets.

Case Study

Husk Power Systems owns and operates village-based biomass power plants in Bihar, India which gasify rice husks to deliver 35-100kW of electricity to power households and small businesses.

Husk’s model is designed to be a turnkey solution which can easily be put into as many villages as they have capital for. Their model is focused on scaling as rapidly as possible while keeping power cheap enough for villagers. The enterprise’s plants cost less than US $1,000 per KW to install and less than 10 cents/kWh to run. Most users pay US$1.75 per month for husk power, as opposed to $5-7 for kerosene. Husk has designed its plants to be simple enough for a high-school graduate with 3 months of  training to operate, which allows the enterprise to train people from the villages where it operates. To achieve its goal of reaching 2,000 villages by 2014 (and training the needed 8,000 member staff), Husk is now developing Husk University, a standardized training program for village engineers which will have a centralized location for every 30-40 plants. Husk is also using its power plants as channels for the village-level sale of corporate goods, which further cover costs.

Enterprise List

 

Individual Home & Business Power

Fixed power sources (in homes or businesses) are used to power lights and appliances. Usually, solar panels are attached to a house. Sometimes, a fuel cell or battery powers wired-in home systems, and is brought to a central point for recharge (Zolair). These systems are often customized to user needs and income levels, with different numbers and sizes of panels. Fixed systems (i.e. solar panels) are often sold with modular products (i.e. lamps, plugs, etc.) that customers can scale up if they want. Generally, these products range between 5-50W (can be much higher), enough to power lamps, mobile phones, radios and sometimes televisions or laptops. Depending on panel size and the number of lights or appliances, systems cost between $100-$2,500 (see Grameen Shakti’spricing list for an idea of range).

Lessons Learned

Even at $100, systems are usually too expensive for users to afford upfront, and are a major purchase. Therefore, financing and service are key to the provision of fixed systems. High upfront costs are often financed either by the enterprise or by a partner microfinance institution. Some enterprises provide in-house financing through a rental model (IDEAAS) or recharging system (Zolair), so customers can pay off the installation cost over time. One challenge with in-house financing is systems are often expensive or politically challenging to remove, which makes it hard to cut power if customers don’t pay. Sunlabob and Energy Plus faced this challenge.

Most systems require maintenance and parts replacement (batteries, etc.) that customers can’t do on their own and for which infrastructure doesn’t exist independently, so the enterprise must provide this. Sometimes maintenance is combined with financing to create a repair incentive (rental or recharging models, i.e.IDEAAS) Other times, community members are trained (frequently with subsidized non-profit models, i.e. Barefoot College). Finally, some enterprises offer a service contract (i.e. SELCO).

Case Study

Grameen Shakti sells solar home systems and other energy products in Bangladesh. It is the energy arm of the Grameen Microfinance Bank, and one of the largest and fastest growing microenergy companies in the world. Grameen Shakti sells over 21,000 solar home systems per month, and sales continue to grow by 50% per year. The solar panels are imported mainly from Japan, and assembled at Grameen Technology Centers, which are managed by female engineers and staffed by female technicians.

Grameen Shakti sells through its own sales people at over 1000 offices across Bangladesh. Each office has ‘social engineers’ who do door-to-door demonstrations, and technicians offering after-sales service. The systems cost around $360 for a 50w system, and are sold on an installment plan allowing users to make a 15%-25% down payment and pay the system off over 2-3 years at a 6-8% interest rate, keeping the monthly payment close to what the average customer was previously paying for kerosene ($7/month), with the added benefits of being able to charge mobile phones, watch television, and use other products.During installment payment periods, Grameen engineers visit households monthly, and customers can also purchase an annual maintenance agreement after their loan is paid off.

Enterprise List

Portable Power Products

These systems are small (usually 1-5W) lanterns and solar panels not fixed to a house. There is a major distinction to be made between Rechargeable  lanterns (i.e. Sunlabob, Shidhulai, Nuru), and self-sufficient portable solar panels that power lamps, mobile phones, and other appliances (i.e.ToughStuff, Green Power). Portable power products usually cost between US$10-50, depending on if they include a solar panel. Some portable products make use of “human power” such as the hand crank used by Lifeline Energy. These products, especially self-sufficient panels, are usually designed to be inexpensive, durable, and low-maintenance, so they can be sold through a retail model.

Resources

Lessons Learned

Portable products are most appropriate for customers who cannot afford home systems, or who have mobile lifestyles unsuited to a fixed system. (i.e Shidhulai‘s customers in rural Bangladesh are afraid their homes will flood and they would lose a fixed system.)

 

Rechargeable lanterns are cheaper, often costing only US$10, because solar panels are an expensive material. The need for charging stations can create ongoing revenue for a microfranchise (i.e. Sunlabob), and create incentives to perform maintenance. Ongoing payments make it possible to further reduce price by financing up-front cost through ongoing payments. For impact measurement and carbon credits, it is easier to track the ongoing use of rechargeable lanterns.

Self-sufficient products are easier to deliver because they don’t require charging stations. Charging stations can make retail sales difficult, and some enterprises have found customers unwilling to buy products that require trust in an external system (i.e. Green Power, Village Tech Solutions). Self-sufficient products are more versatile because they can power other products like mobile phones and radios. Some enterprises have developed ‘extension cords’ for their panels (i.e. ToughStuff’s panel can be connected to the battery compartment of a radio).

Case Study

Environmental Camps for Conservation Awareness (ECCA/Future Now) introduced the first inexpensive solar lantern available in Nepal (called the Solar Tuki). Before the Solar Tuki, the only off-grid lighting products available were ~$1,000 solar home systems and kerosene lamps. The popularity of ECCA’s 2.5w White LED system put pressure on the Nepali government to start subsidizing cheaper, smaller lanterns. ECCA sells its lanterns through village women’s groups, who oversee maintenance and receive a $5 commission on the $50 price. ECCA trains these groups to maintain the lamps, and supports them if they can’t fix them.

The enterprise has created a for-profit trading company, Future Now, which manages lantern production, and has diversified its energy offerings as competition for the lanterns increased. To increase affordability, ECCA has used its non-profit village connections to work with a development bank to sell to villagers on credit, with the village sales group managing the loans. Villagers pay the cost back over 6-12 months, which matches the $5/month they currently spend on kerosene, but ECCA is able to receive the money upfront from the bank. ECCA is also now piloting rechargeable lamps with a village-based charging station, allowing customers to buy their lamp without a solar panel for only $11.

Enterprise List

What These Products Replace

The social enterprises in this section target people without grid electricity. Currently this group numbers over 1.6 billion people with no grid power, and around 1 billion more with unreliable access- power which goes out for many hours per week.  While worldwide the electrified population is increasing, in Africa, the opposite is true, as population is growing faster than the grid. While a lack of electricity greatly increases many costs, including powering small appliances and charging mobile phones (mobile phone coverage and availability have expanded much faster than grid access (there are 649 million mobile subscribers in Africa)1 with only 350 million people on grid2), the most valuable benefit of off-grid energy products may be the elimination of kerosene lamps. Kerosene lamps are the most common light source in the off-grid world, and their pervasiveness results in:

  • Health problems: WHO has determined that people who breathe kerosene and soot from lamps are inhaling the equivalent of two packs per day of cigarettes.3 One study in Nigeria shows that more than 50% of hospital burn victims in hospitals were from fires caused by kerosene lamps.4
  • Environmental problems: A single kerosene lantern used 4 hours per day emits over 100 kg of carbon dioxide per year.  Worldwide, this results in 190 million metric tonnes of CO2 per year, which is 1/3 the total emissions from the U. K.5
  • High costs for users: At $1/liter of kerosene (prices vary), a kerosene lamp run 4 hours per day can cost about $35/year.  This can be over 5% of many users’ income, and these lamps provide such little illumination that to obtain the same amount of  light with an “inefficient” incandescent lamp would cost about 45 cents, and with a compact fluorescent it would cost around 7 cents.6
  • Lowered productivity: LEDs produce nearly 200x more light than kerosene and 50x as much as conventional bulbs.  The low light from kerosene lamps make it hard to study, work, and do many other household tasks, costing users hundreds of hours of time every year.