Tuesday, June 13, 2017
When South Africa’s government started giving laptops to off-grid schools, James van der Walt spotted an opportunity for a solar panel ( for example: GOAL ZERO NOMAD 13) business. But his market research revealed a problem: of 12 schools he visited, 11 had previously lost solar panels to thieves. So he decided to pack his system into a reinforced shipping container, creating a secure, mobile power station that could be shut away at the end of each day.
The prototype Solar Turtle has survived its first year powering a school in the Eastern Cape, despite civil unrest that forced the school to close for three months. Save for some scratches where someone tried to break in, the unit came through intact. “Nothing got broken, nothing got damaged,” says van der Walt. “It was like, ‘Yes, it’s actually working’.”
Solar Turtle is just one example from a clutch of startups trying to navigate the challenges of Africa’s off-grid electricity sector with mobile, flexible solar technology. It’s part of a mosaic of businesses, social enterprises and philanthropic schemes fuelling talk of an African “solar revolution”. Other startups include Juabar and ARED, which supply portable solar kiosks for phone-charging businesses in Tanzania and Rwanda respectively, creating jobs while boosting access to clean, cheap energy.
New ideas and declining costs are already leading to a dramatic uptake of solar technology across Africa, according to a report published this week by the International Renewable Energy Agency.
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Van der Walt is not alone in using shipping containers. German firm AfricaGreenTec created a similar grid-in-a-box for villages in Mali to attract investors nervous about the vulnerability of conventional technology in unstable regions. “This way we can recover the whole thing if there is any crisis,” says founder Torsten Schreiber. “We only need a few hours to put it on a truck and leave.”
It’s unsurprising that entrepreneurs are seeking routes into Africa’s off-grid solar sector. More than 630 million people lack electricity in sub-Saharan Africa, according to the International Energy Agency. The majority of additional investment required to achieve the UN target of universal energy access by 2030 needs to go into off-grid and mini-grid systems, it has said.
One hope is that electrification won’t just bring light, TV and phone charging, but spawn new industries too. Africa GreenTec’s prototype, launched in south-west Mali’s Mourdiah village in 2015, offers a glimpse of what’s possible. Locals used to throw away 80% of their goats’ milk, says Schreiber, but thanks to energy for cooling from the solar container, they now use it to make cheese. Mango juice is also newly on sale.
Despite the buzz around such ventures, most are very small and in need of funds. Commercial investors have shown some appetite for backing bigger players such as solar systems business M-Kopa Solar, which raised $19m in one investment round last November. But young, innovative startups still rely on money from donors and so-called impact investors, who look for social benefits as well as a financial return, says the Global Off-Grid Lighting Association’s executive director, Koen Peters.
Schreiber’s experience at Africa GreenTec bears this out. Having crowdfunded the money for four containers (at around €150,000 a go) he is now looking to mainstream investors to back 50 more. This plan would make him the biggest decentralised energy provider in Mali, he says, but is too small for venture capitalists approached to date: “They told me ‘If you need $100m, come again’,” he says.
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Solar startups are also vulnerable to competition when they have proved their model and are ready to grow, says Itamar Orlandi, senior analyst at Bloomberg New Energy Finance. “Pioneers often work really hard to create consumer awareness just to see their margins and market share disappear once their success attracts competitors,” he adds.
Research on a Zambian mini-grid by the Stockholm Environment Institute (SEI) reveals another, potentially knottier, challenge for electrification startups with big dreams. The 60 kilowatt pilot in Mpanta, a fishing village, lost customers when a six-month fishing ban kicked in, says Oliver Johnson, senior research fellow at SEI’s Africa Centre. Designing the right system, or payment plan, requires deep understanding of local conditions, he says. “The big question is how do you scale up things that need to be context-specific?”
Answering that may get easier as domestic expertise and supply chains grow – something Gillian Davies, a renewable energy expert at UK-based international development consultancy IOD PARC, has been monitoring. She points to emergent solar panel manufacturers in Kenya and Ghana, and the fact you can now take a renewable energy degree in Malawi’s Mzuzu University. This shift to domestic capacity and expertise will ultimately help with finding solutions that better match local, or at least regional, conditions, says Davies.
Products that directly boost income generation may also have an advantage over generic electrification when it comes to creating sustainable, scalable ventures, says Toby Hammond, whose Kenya-based company Futurepump sells solar-powered irrigation pumps to small-scale farmers. “Being able to irrigate a crop in dry season when you wouldn’t otherwise be able to grow anything translates directly into income for the farm,” he says. “It’s more bankable.”