If all goes according to plan, by the end of the year 75,000 homes in Sub-Saharan will be lighting their rooms and powering their cell phones with solar panels that are managed with mobile phone tech, and provided by British startup Azuri Technologies. While there are a few startups selling similar technology, (Simpa Networks and Mera Gao Power both in rural India) Azuri seems to have figured out how to scale this type of business better than most.
“A hundred homes is easy. A hundred thousand homes is a lot harder. And it’s even harder still to do this for a hundred million homes,” Azuri Technologies CEO Simon Bransfield-Garth tells me in an interview in central London this week. By 2014, Azuri — which has 15 employees and is based in Cambridge, U.K. — says it will have a quarter-million homes using electricity from its solar systems across nine countries in Africa.
So why do so many people earning around $3 a day want to pay for Azuri’s product, called Indigo? There’s several reasons. Azuri provides pay-as-you-go solar systems, which doesn’t require a high upfront fee and costs about $1.50 per week. For that buck and a half every seven days, the customer gets solar panels installed that are attached to two fixed lights and a mobile phone charger. Bransfield-Garth tells me that the tech is one of the most low-cost of its kind on the market today.
The lighting system can replace the expensive, dangerous and dirty kerosene lamps that light up many homes in rural Africa, and the cell phone charger supplies reliable power to what is likely the family’s main communication and computing system. The pay-as-you-go solar systems are not just low-cost lighting systems, they’re also technology that can enable families to read at night, kids to do their homework after the sun goes down, entrepreneurs to conduct businesses using text and the mobile web from their homes, and children to even participate in e-education.
Picture what computing has done for the developed world across various aspects of society — that’s what cell phones are now doing for the developing world. But of course cell phones only function when they have a reliable source of power, and there’s 1.6 billion people across Africa, India and East Asia that don’t have reliable access to grid power.
The Indigo system — and others of its kind — also uses cell phone networks to operate. The Indigo box uses scratch cards that are validated via text message — the customer enters the scratch card numbers in the system and it unlocks about a week’s worth of electricity from the solar panels. I’m using the same type of scratch number system for a pay-as-you-go U.K. cell phone here in London. If the customer doesn’t pay for Indigo, the power doesn’t flow.
Once the system has been paid for (with the weekly fee), the customer can upgrade the system to access more energy and also add on power for more electronics, like a TV, radio, more lights or a sewing machine. Bransfield-Garth tells me that it commonly takes about 18 months to pay off the systems and then the customer owns it.
The business of off-grid power
Azuri was created by the Cambridge University solar manufacturer spin-out Eight19 in late 2011, and was formed into Azuri toward the end of 2012. Since then the team has shifted its business model a bit, and moved away from using a specific type of technology, and become more technology agnostic. That’s because the technology is not the secret sauce to this type of business — all of the parts are commodities and ultra low cost.
The way to scale this type of business is to streamline the distribution, services and logistics. It’s a huge effort to build out, and maintain the infrastructure, says Bransfield-Garth, and Azuri works closely with local entrepreneurs in the community. “We learned to make sure that the distribution chain involves the community all along the value chain,” says Bransfield-Garth.
Just executing on the distribution of the systems can be the hardest part, Brandsfield-Garth tells me. “There is no established market for what we do,” he says, explaining how Azuri has had to be creative and scrappy about every aspect of the business from funding the projects to working with the communities. It might be developing into a scaled business, but at this point, only a startup would likely take on such a task.