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SolarNow quest to light east Africa

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By Brian Yatich

This solar firms approach uses asset finance to provide electricity to off-grid rural areas in sub-Saharan Africa

A big number of the global community remains without access to electricity with a majority of them springing from the developing countries.

According to the International Energy Agency, lack of access to national electricity grids for rural populations in East Africa is high with 98 per cent in Tanzania, 95 percent in Kenya and 96 per cent in Uganda.

These figures express a situation faced by many households and businesses in east Africa, particularly individuals residing in rural areas.

As power demand in East Africa is projected to triple by 2030 it is essential to meet this demand by investing in renewable technologies and diversify in alternative energy sources.

With East Africa boasting of the world’s best solar energy approachability, it is widely foreseen that solar is will be a key part of the solution.

However, the future of these projects seems to be hanging in the balance with lack of adequate infrastructure and slow government-led schemes to push for them.

With this worrying trend, companies are slowly moving in to develop solutions in a bid to cater for the needs of alternative power for the people in the region where electricity is either expensive or inaccessible.

One such company is SolarNow, a solar solution company that ­­supports access to energy for low-income Africans in the rural areas of Sub-Saharan Africa.

The firm, founded in the Netherlands is headquartered in Uganda, SolarNow’s primary activity is to sell and distribute high-quality solar home systems in combination with an end-user credit facility.

Its operations started in Uganda in May 2011 as a consultancy firm as they train rural entrepreneurs across Africa and offering advice to solar sector players on how to build a rural distribution network.

SolarNow’s products and services are increasingly popular in off-grid areas in Uganda, as they have enabled rural households to reduce their energy costs, improve access to information, charge their phones, light their households and connect to the internet. At the same time, they also enable small businesses to increase their productivity and income.

“With a population growth that is hard to electrify for any government, self-sufficiency with decentralized power generation where the sun is always available is the right way to go,” Ronald Schuurhuizen, the founder of SolarNow says.

SolarNow offers a wide range of solar products ranging from household purposes such as lighting, entertainment and cooling. The rest are used by businesses, schools and clinics to extend opening hours, powering small appliances and to cool medicines.

“We also offer larger systems that can power schools and clinics. Furthermore, these solar systems can also power income generating activities like phone charging, barber salons and rural bars and cinemas. We also have a water pump for irrigation powered with solar,” he adds.

The solar company’s operations has been a success having sold over 14,000 systems to approximately 4,500 entrepreneurs and 9,500 households and has since grown its branches to 45 in Uganda, the firm has now opened shop in Kenya owing to its accomplishment.

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“Our Uganda operations have shown to be profitable and replicable hence our move in entering into a similar market here in Kenya. Rural off-grid buildings for households or organizations and companies need access to quality, decentralized power generation source to change people’s lives,” he says.

Financing Model

One of SolarNow’s remarkable move is the option for financing that they are offering to their clients.

“With our asset financing model, we allow customers to make a 15 per cent deposit for a solar system and pay the remaining in installments for a period of up to two years; this has made it possible for households to acquire goods often out of reach due to high payment costs,” he says.

With their wider product variety coupled with their personalized customer credit scheme, the firm is projecting to sell 100,000 systems in the regions they cover before the end of 2018.

Their modular product range (50Wp – 500Wp) of solar home systems is distributed through a franchise network in the remote off grid areas.

Ronald further says that, east Africa should be the leader in solar energy revolution. “It should be African companies like ours expanding to other continents, not the other way around.”

“Kenya’s solar energy sub-sector in the last five years has been exciting due to the quick drop in component costs for making smaller portable do-it-yourself installation products like lanterns and kits. These suddenly attracted investors and became available massively,” He says.

 

Challenges

Every company has growing challenges, which is usually becoming obvious when a product or service takes off. Much of SolarNow’s challenges are finance.

“Working capital is a constant issue. The business has been chronically cash constrained. When operating at a small scale, supply is very expensive, however with investment, we will be able to grow faster and achieve much higher margins also,” He says.

Moreover, the founder says that as the demand for solar product rose in the last few years, the number of companies — both serious and shady —  have surfaced jostling for a piece of the pie.

Going forward, this ambitious social enterprise says that it will continue to increase across the region with more alternative energies and energy efficient appliances.

“We intend to expand to more east African countries like Tanzania and to grow within the exciting countries. Given that SolarNow’s strength is also its rural distribution network, we intend to move to areas that are right now that hasn’t been explored by other solar companies.” He says.

He says that his mission is to transform lives by enabling access to sustainable energy.

“We are looking to work with the communities in the east African region to increase accessibility of power and we are set to open up new markets, both geographically and with different solutions” he concludes.

 

 

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