On April 15th 2019 NOTS Solar Lighting will begin market trials in Rwanda with a solar home solution (SHS) that we believe will transform access to electricity in Sub Saharan Africa. The SHS will enter the market with a list price half that of comparable systems. More importantly, we’ll be road testing an innovative finance and go-to-market model that brings our SHS within reach of even the poorest families.
NOTS has been providing SHS to off-grid communities in Africa since 2011 and is, according to the World Bank, now one of the top solar companies in Sub Saharan Africa. What that means in practise is sales of around 30,000 units a year. Which is nowhere near the numbers required for us to reach our goal - providing power to the approximately 125 million African families that lack it (45% of the African population), by 2025. We’ve got to create that hockey stick sales curve, and we now think we know how to do it.
It’s quite common for SHS to be provided on a pay-as-you-go basis. For instance, a built-in SIM tethered to one of the near-ubiquitous mobile telephone companies allows families to prepay for a set amount of light and power. It seemed like the common sense, almost ready-made, go-to-market model. But it’s failed. Mostly, it failed because families with limited or no education - which is the majority - had no method or yardstick to estimate when the lights would go out. Time and again, they were plunged into darkness. Those with the nous to do the math quickly realised that the SHS cost significantly more than kerosene for the same number of hours of light. Word got around.
Our experience and research both indicate that a microloan approach, with a weekly, fixed payment, is far more effective, especially for the target households. Light and power can’t be arbitrarily extinguished. And at the end of the 2-year loan period, the families own the SHS outright, and their light and power is free.
So, for the first time anywhere, we will bring together all of the elements needed to create a step change in SHS penetration, in a single streamlined solution. The first element is a Tier 1 SHS - offering 1000 lumen hours of light - at a disruptive market price. The second is a microloan scheme enabled through cashless mobile wallets - the grease in the hub of Africa’s monetary economy. For 100 weekly payments of RwF 525 (USD 0,60), auto-withdrawn from an Airtel Money account, the household becomes the owner of the Mutimax SHS. Compare that to the RwF 600 that many households spend weekly on fuel for unhealthy and dangerous kerosene lamps and it’s clear to see how this is a much more affordable, cleaner and sustainable alternative.
The real innovation has been in making a microloan scheme ubiquitously available through familiar mobile phones with already-high rates of adoption. To do that we’ve co-developed the microloan scheme (with Rwandan investors and the World Bank) and co-developed a mobile-data-based credit check with ComzAfrica. As well as payment facilitator, Airtel Rwanda is also our go-to-market partner, creating outreach to the families we most need to reach.
This trial encompasses 3 Rwandan Districts and 100,000 Airtel subscribers. We’d like to see a 2% conversion rate as a starting point. If the trial is successful, we’ll go nationwide, with the goal of equipping 1m Rwandan families by 2023.
Not only that, but we’ll publish the detailed recipe, for like-minded impact businesses to follow us. We can’t achieve our target by ourselves. But we can demystify the process for everyone.