Solar energy has experienced major scale globally in recent years. Today, as prices continue to drop and technologies improve, developing countries are beginning to capitalize on its offerings. Startups are popping up all over Sub-saharan Africa and rural India, offering BoP consumers access to clean, sustainable electricity at affordable prices. Below are articles highlighting the opportunities that solar offers to developing countries, and how startups, like our portfolio companies Simpa Networks and SolarNow are experiencing major success in the space. Solar Offers Huge Opportunities to African Startups by Tom Jackson on Disrupt Africa According to the International Energy Agency (IEA), 585 million people in Sub-saharan Africa lack access to electricity, and the region has a 20% grid access rate. However, the answer to this problem may have been found in sustainable, and increasingly affordable solar energy. Today, Africa receives approximately 49% of the total solar energy on earth. The lack of access to conventional electricity, a major issue for the continent, has presented an opportunity as it lends itself to the rapid deployment of solar. Startups, like our portfolio company, SolarNow, are taking advantage of the the falling cost of solar panel technology that has made solar increasing accessible in Africa. Pay-as-you-go solutions are popping up all over the continent – and other emerging markets – with the potential to reach individuals living beyond the grid with limited cash on hand. These African solar startups are proving to be attractive to investors, securing millions of dollars in funding to scale their businesses. Solar is proving to be a major opportunity not only for African startups, but for the development of the continent as a whole. Energy, A Field of Opportunity for Africa on AllAfrica According to the African Development Bank, “Reliable and affordable energy supply is key to generating the broad based and inclusive economic growth needed to make major inroads into poverty.” Their recent report, Development Effectiveness Review 2014 Energy, examines challenges and opportunities in providing affordable and sustainable energy to African citizens. Sun in the Sky and Jugaad in my Pocket for a Business Model Based on Empowerment by Francesca Ferrario on Social Story Paul Needham, Co-founder of our portfolio company, Simpa Networks, was inspired by the entrepreneurial spirit of the people of rural Tanzania who were investing in small solar panels and using them to start small businesses. These innovative entrepreneurs showed Needham that selling solar power was not only profitable, but also that they village found more value in the services the solar panel provided then in the ownership of the panel itself. Solar has scaled significantly in Sub-saharan Africa, but Paul noticed that the same had not happened in rural India, even though the majority of the population is living in poverty, with little or no access to electricity. He explained, “distributed solar power hasn’t scaled up in rural India for two reasons: first, because the upfront costs are too high, and second, because traditional lenders are uncomfortable underwriting the technology and consumer payment risks.” Paul sought to change this, and ultimately developed a business model for Simpa Networks which led it to break through the Indian BoP market. Today, Simpa reaches 9,000 customers, generating over 100MW of clean energy and is useful to over 45,000 beneficiaries. New Here? ▪Learn about what we do. ▪Follow us on Twitter. ▪Like us on Facebook. ▪Join us on LinkedIn. ▪Add us on Google+. ▪Sign up for our mailing list. ▪Catch up on past Weekly Reviews.
Solar for Development
May 15th, 2015 / Weekly Review