In Kenya, the majority of the population doesn’t have electricity at home, since the country’s national grid is unreliable and expensive to buy into. Now a solar energy startup is changing people’s everyday routines.
Fifty-two-year-old Daniel Tempes Olonapa stands outside his greenhouse perched on a hilltop overlooking the towering buildings of Kenya’s capital, Nairobi. He points to two paper-sized black panels on top of his roof.
“Can you see them?” Daniel asks, pointing towards the panels excitedly. “They are small, but they are very powerful. I rigged them up there myself and put in the batteries. Then the sun comes and we get light, we can charge our phones. My six children can do their homework at night. “
The solar panels supplying Daniel with precious electricity come from the solar energy startup M-Kopa, which means “borrow” in Swahili.
The company is on a mission to supply cheap, clean and affordable solar power to the thousands of rural, off-grid Kenyans like Daniel, who up until now have only dreamt of having electricity on tap. M-Kopa has brought together the latest solar technologies with high quality solar panels, batteries and lights, and is selling them at kiosks and shops around Kenya.
A recipe for success
The formula is clearly working. Set up just 18 months ago, M-Kopa has already reached 60,000 customers. Their goal is to reach one million by 2018. But considering figures from the World Bank estimate that 34 million Kenyans – 84 percent of the country’s population – have no electricity in their homes, the demand and the need for power is clear.
Jesse Moore, one of the three co-founders of M-Kopa, is camped out inside one of several white shipping containers that double up as office spaces for the startup after it outgrew a bungalow.
With backgrounds in finance and mobile technology – one of the founders is the brains behind M-Pesa, Kenya’s revolutionary mobile payment service – the team set about trying to use their professional experience to solve one of Africa’s most pressing problems: bringing reliable and sustainable power to an impoverished population.
Simple and cheap to set up
“In the off-grid market you actually have to buy your own generation [equipment] so that’s the panel and all,” Moore explains.
To counter this upfront cost, M-Kopa customers put down a small deposit for the $200 solar pack that consists of three lights, a radio and a solar panel. They go home, set it up themselves and immediately start reaping the benefits of having electricity. The cost of the solar pack is then paid off in weekly installments over a year.
And it is here that M-Kopa’s partnership with M-Pesa has proved so crucial. As Moore explains, controlling the solar power supply so that it worked when people paid off their weekly installment but stopped working when they didn’t has been key to their success and has put it ahead of competitors such as UK-based IndiGo.
“We started to realize we could get our customers to pay us through M-Pesa in small amounts based on what they could afford,” he says.
When the repayments have been paid off in full, the electricity supply is free and the customer takes full ownership of the solar power system.
No attractive alternatives
Thirty-nine-year-old Anne Wanjiku shows off an intricately beaded belt she made last night. It is just one of the pieces in a beadwork collection she sells in the local town to supplement the income she earns from rearing cattle.
Wanjiku never thought she could have a constant electricity supply. But now, she cannot imagine her business functioning without light at night from her solar panel.
“Before I had electricity I’d come home from looking after my cattle, make supper and go to bed,” she explains.
“Now, I work on my beadwork until 11 most evenings and spend the time during the day taking of my cows. My business has definitely improved.”
For the average Kenyan the cost of connecting to the country’s ageing national grid is, at $400, prohibitive. Add to that cost perpetual power outages and the cost of monthly bills, and the attraction of M-Kopa’s solar panel system with its minimal upfront cost and low payback installments is enormous.
The alternative for the majority of the population is kerosene – a fuel Kenyans admit is dangerous and expensive. The average household spends around 50 cents a day on kerosene.
“In every way kerosene is inferior to any form of electricity or power,” says Moore. “It’s smelly, expensive, you’ve got to go and pick it up every day, it makes your kids’ eyes go foggy when they study under it, [but] when we stack up all the off-grid people in Kenya alone and you look at all their spending on kerosene that’s one billion dollars on kerosene.”
And that’s one billion dollars M-Kopa is adamant should be spent on renewable energies such as solar power, which is cheaper, more environmentally friendly and can more easily reach rural populations who so desperately need it.
Ambitious government plans for power
The Kenyan government has ambitious plans to triple its power output through the national grid over the next few years by expanding geothermal, wind and hydroelectric output.
And with Kenyan industry complaining that the unreliability and the high price of electricity is making them less competitive, M-Kopa isn’t alone in believing it’s in the cities that the majority of the extra power output is needed the most.
“The need to develop more power is huge,” says Moore. “But the demand for that power is going to be largely built around industry and hospitals and schools and big institutions. Whereas the consumer base that is living more rurally, more remotely, more off-grid and not needing to consume that much power – they are better suited to new technologies like solar.”
Kenya’s rural customers, like Daniel, also have their eyes firmly fixed on M-Kopa’s future.
M-Kopa recently closed a $20 million round of financing with funding from both philanthropic and commercial backers for new products and a move into new markets – Bill and Melinda Gates have put in four and a half million dollars.
So Daniel may not have to wait too long for what he really wants next. “Once M-Kopa has created a bigger system that can power a TV, I’m ready for that.” Daniel says longingly. “I’m waiting impatiently.”