Pay-As-You-Go Solar Energy to Off-Grid Households

M-KOPA provides pay-as-you-go energy services to off -grid customers by combining micropayment and mobile technology to enable leasing of solar power systems.

M-KOPA’s financing model makes the company’s solar home systems affordable for rural African households. Each system is bought with an initial deposit of $35, followed by 365 daily payments of $0.5, less than the customer’s daily spending on kerosene. The system comes with a battery, a phone charger, and a SIM card; when a payment is made via mobile phone, a signal is sent to activate the battery and power is provided.
After payment completion, the customer owns the solar system outright. Customers with good payment behavior are then offered a range of upgrades on their $0.5 per day payment plan. These upgrades range from additional lights, energy-efficient cook stoves, smart phones, and solar TVs, adding additional revenues for M-KOPA. To date, the company has connected more than 340,000 homes in East Africa to solar power, with more than 500 new homes added daily and aiming to reach one million homes by the end of 2017.

Relevance of solution

More than 620 million people, or two-thirds of the population in Sub-Saharan Africa, are without access to an electricity grid.1 By combining micropayment and mobile technologies, M-KOPA is rapidly growing in its quest to provide renewable energy to customers for whom clean, affordable electricity was previously inaccessible.

Triple Bottom Line

Environmental

A company study found the solution replaces 160,000 liters of kerosene daily, reducing CO2 by 225,000 tons since the beginning of sales in 2012.

Social

According to M-KOPA, 92% of customers report the solution has improved their children’s ability to study and improved health conditions due to the removal of kerosene lamps.

Economic

The company estimates projected customer savings of $248 million over four years based on an average of 125 hours of lighting per household per month, with 97% of customers already reporting to have reduced energy costs.


Sources

  1. IEA. ”World Energy Outlook.” (2014)