Affordable Access to Energy for All: Innovative Financing for Solar Systems

The problem: Off-grid access to affordable energy 

d.light

Globally, 1.3 billion people live without electricity. In Africa alone, some 590 million people lack electricity, a number that is expected to increase as population growth rates exceed projected rates of power grid expansion. This failure to supply electricity to a large segment of the population represents a significant forgone development opportunity. Electrification produces considerable gains in employment, education, income and poverty reduction.

People living “off-grid” typically rely on kerosene lanterns or diesel power generators. Tragically, such power sources can be detrimental in the long term. The World Bank estimates that the health impact of breathing kerosene fumes is the equivalent smoking two packs of cigarettes a day. Unsurprisingly, two thirds of adult females with lung cancer in developing nations are non-smokers. However, healthier and safer alternatives to kerosene and diesel, such as solar power, remain out of reach for many because of their high upfront costs.

The solution: Pay-as-you-go solar power

d.light design provides viable a solar power alternative to households throughout Uganda by using a two-pronged approach that combines its innovative solar technology with user-friendly financing. Its rugged home solar system includes a solar panel, two fixed LED lights, a portable LED lantern and a mobile phone charger. But the company goes one step further than traditional solar companies with its flexible, pay-as-you-go finance model. Under this model, consumers forego heavy up-front costs by paying off their system in deposits. It is similar to the layaway model many large department stores have offered consumers in the past—but with the added bonus of being able to use the product while paying it off. 

The potential: Cost-effectiveness, impacts, and implications

d.light's target customers in Uganda typically spend up to $15 per month on kerosene to light their homes and charge their mobile phones. In comparison, the d.light home solar system has a lifetime cost of $25, with the system having a life expectancy of about five years. Consumers then pay off their system daily, weekly or monthly, as they are able. A typical consumer can pay off the device in less than one year.

Read the d.light feature in the San Francisco Chronicle, and visit the d.light website to learn more

 

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Last updated: October 09, 2013

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