Sustainably, cost effectively and efficiently selling solar lights at the price of kerosene thereby reducing consumption of kerosene
Rachuonyo District in Kenya, like many rural parts of Sub – Sahara Africa, has a poverty index of 74% and electricity penetration of less than one percent. Ninety seven percent (97%) of the 81,395 households light their homes at night using kerosene lamps. Currently, such lanterns emit 720 million tons of greenhouse gases to the environment in Sub – Saharan Africa alone.
Solar lanterns are a proven alternative that do not emit greenhouse gases to the atmosphere. Currently there are many companies that specialize in the manufacture of solar lights. Yet despite the proliferation of solar light manufacturing companies, solar lights have achieved less than 0.5% distribution rates in Sub-Sahara Africa. This is mainly attributed to lack of infrastructure to make the lanterns more available and lack of consumer finance to make the technology more affordable. Hand-to-Solar, a new social venture, is the solution!
What if solar lights could be purchased as if the consumers were purchasing kerosene they currently use? What if solar lights were made available as kerosene is currently?
Will the target population still use the dim kerosene lamps? Will they continue using lamps that cost US $50 annually to keep fuelled? Lamps that significantly reduce indoor air quality? Lamps that are responsible for causing fires, injuries and even toddler deaths? Hand to Solar does not think so!
Our mission is to reduce and eventually eliminate the consumption of kerosene in rural Africa. We shall use a new distribution model that shall take the solar lights to the rural areas where they are needed. We shall also adopt a payment method that shall make kerosene lamps seem expensive; which is a fact, they are! Together, the above strategies shall ensure unparalleled adoption of the lights.
Category of the action
What actions do you propose?
We shall increase availability of the solar lanterns by establishing new effective retail outlets in rural Rachuonyo District. We hope to increase affordability of the devices by making our customers pay for the devices as if they were purchasing kerosene lamps they are currently using.
Each willing customer shall be given a solar lantern of his/her choice after making a down payment of ten percent of its price. This is approximately the price of kerosene lamps. They shall then pay the balance weekly as if they were purchasing kerosene for their lamps and/or paying for their phones to be charged.
Why will the customers pay for the devices?
By paying for the devices, we shall ensure that we can distribute the lanterns to many people using the same resources. We shall therefore be very sustainable in the long run. We also intend to show viability of this new distribution model to investors, thereby attract significant investments in this model that shall accelerate our scale up.
Who will take these actions?
DANIEL KAUDO shall be our manager. He graduated with a bachelors degree in Mechanical Engineering from Moi University. He also has certificates in Sales & Marketing and Information Technology. Mr. Daniel is experienced in startups having started a small printing press and cybercafé while still in college (2008). He is equally very competent in sales and marketing having been an SME sales officer at Kenya Commercial Bank and sales officer at Homa Hills Community Development Organization.
I have assembled a team of advisors who shall add direction and strategic advice to the business. They include:
Cephas Dudi: Mr. Cephas is the owner and founder of a local wholesale and retail enterprise. He has built a thriving business from scratch and his insight into the retail business will be very helpful as we aim to learn from successful retailers in other industries
Mr. Derrick Omoro
Derrick is a senior chartered accountant. He has a wealth of experience in startup business accounts management. He will bring his accounting expertise to assist with cash flow management and financial projections.
Kindly Note: The advisors mentioned above shall participate on voluntary basis and hence no fee shall be charged for the business guidance received from them.
Where will these actions be taken?
Hand-to-Solar shall pilot in Wang' Chieng’ Ward, Rachuonyo District in Kenya. Our office shall be located in Rakwaro Market Centre, a rural market in Rachuonyo District. Rachuonyo District, like many rural parts of Sub – Sahara Africa, has a poverty index of 74% and electricity penetration of less than one percent. Ninety seven percent (97%) of the 81,395 households rely on kerosene lamps. Solar lanterns’ adoption is at 0.06%.
There is great potential for solar energy uptake in Rachuonyo District and by extension, the whole of rural Kenya. Currently, majority of the inhabitants of Rachuonyo District cannot afford the one-off payments for solar devices in the far off towns. They live from hand-to-mouth with average incomes of less than two dollars a day. The lanterns are also not available in the rural areas where they are most needed. If payment for solar lanterns is packaged as if the consumers were purchasing kerosene for the lamps in use currently, the uptake of solar devices will be unmatched. My confidence is affirmed by the great demand for our potential products I have witnessed through sample visits to the target population.
How much will emissions be reduced or sequestered vs. business as usual levels?
What are other key benefits?
Solar lanterns are a life-enhancing technology with numerous benefits:
- they provide far brighter illumination.
- They cost no money to operate, as they are charged by the sun.
- They pay for themselves in less than a years’ time for most households.
- After the payback period, they generate continuous cost savings for extremely poor households.
- It has been shown that they can increase a household's disposable income by upto 30%.
- Because the quality of light is brighter, they also result in as many as 20% more study hours amongst children.
- They do not cause fire accidents hence there will be reduced deaths and injuries due to use of kerosene lamps.
What are the proposal’s costs?
- Stock: currently, we lack stock. This is the main cost associated with this proposal. We intend to pilot within three months with 1,200 solar lights and thereafter scaleup. Our cost of stock for the pilot period requires be US $9,000. Transport and Logistics requires additional US $700.
- We have leased office premises and purchased office equipment to help with the running of the venture in Rachuonyo District.
We intend to help 3,000 people in three months. We additionally expect to scale up the company through grants and loans. Within two years we shall help at least 160,000 people thereby reducing greenhouse gas emissions by more than 120,000 tons. We are on a mission to kick out kerosene lamps from the continent. We shall replace the 720 million tons of greenhouse gases within ten years.