Pay-As-You-Go Solar Technology: A Key to Unlocking Energy Access - Kenya and Peru

Pay-As-You-Go Solar Technology advances markets for clean energy in developing countries, thereby reducing CO2 emissions and building prosperity. Based on a strategic portfolio of high impact projects, Pay-As-You-Go Solar Technology works to generate energy access, improve lives and economic opportunities, build sustainable markets, and combat climate change. This activity in partnership with PowerMundo and Angaza has developed a pay-as-you-go (PAYG) technology and financial mechanism that enables off-grid customers to pay for solar products in a “rent to own” system.

Fast facts:

So far, this activity has offered 1,500 small-scale entrepreneurs in peri-urban Nairobi, Kenya slums the opportunity to purchase high-quality solar products under different pricing schemes;
The estimated sales of 1,000 units is equal to 100 metric tonnes of CO2 being displaced and 2.9 megawatt-hours of solar energy generated within the first year;
In Peru, the project has supported over 54 distributors earning increased income, distributed over 4,000 cleantech solar-powered products and reached more than 20,000 end users with improved access to energy.

The problem

The high upfront cost of solar products is one of the major barriers to the widespread adoption of decentralized, clean energy solutions in the developing world.

The solution

This activity, in partnership with PowerMundo and Angaza, has developed a pay-as-you-go (PAYG) technology and new financial mechanism that enables off-grid customers to pay for high-quality solar products in a “rent to own” system. By investing in market development for clean energy focusing on energy access, cross-sectoral issues and smart cities, this activity connects public-to-private funding to small and medium-sized enterprises and helps them attract private financing. This flexible pricing structure enables cost-restricted customers to match micro-payments. This business model sources the best-in-class solar products in bulk for economies of scale and distributes them via a growing network of the countries’ extensive bus system.

Helping the planet

CO2 emissions are kept in check by the implementation and usage of renewable energy and energy efficiency technologies.

Helping people

With the “rent to own” payment scheme, individuals will save between 20-30% of household income that was previously spent on kerosene and mobile-phone charges and will have improved access to energy. Through the life of the products, these end users will enjoy increased income due to savings on energy expenditures, improved light for study, increased productivity and cleaner environments due to the avoidance of CO2 emissions. They will also benefit from increased household health and safety from avoiding kerosene combustion. The dealer network in Nairobi, rural Kenya and rural Peru will become part of a sustainable sales channel that will allow them to sell a high-quality solar products at an affordable price. The energy access and mobile payment sectors will also benefit.

Scaling Up

Pay-As-You-Go Solar Technology demonstrates that the business model can be scalable, replicable, and self-sustaining while promoting low-carbon growth through more efficient operations, greater distribution and integration of clean energy products in rural Peru and Kenya. To scale-up sales, the following measures will be put in place: logistical infrastructure for transporting products from the manufacturing site, hiring local personnel to manage sales operations and in Kenya, the Angaza Energy Hub monitors all product sales/payments and is cloud-based, thus unaffected by scale.