Like many small-scale farmers in densely populated Kisii County in western Kenya, James and Janet Torori long depended on bananas, maize and a single dairy cow for food and income. “Like everyone else around here we have relied on two crops to support our family and it has not been easy earning a decent income considering that what we have been producing is what everyone else produces,” James Torori said.
But over the last year they’ve found another promising source of cash: Using green electricity from a local solar micro-grid to power a hatchery and raise chicks for sale. As part of the Kuka Poa (“smart poultry” in Swahili) project they now earn about $80 a month more than they once did, said the couple from Kebaracho village.
Commercial-scale solar power – sufficient to run businesses as well as lights – could help many more rural people across East Africa earn a better living, say officials at Powerhive, a microgrid power company that provided the Kuka Poa panels.
But installing clean power requires cash – and for that the company is turning to a partnership with The Sun Exchange, a South Africa-based solar energy financier. The Sun Exchange runs an online buy-to-lease marketplace for solar cells, where investors can buy solar equipment that is then leased to rural communities to help them run businesses.
As the businesses make a profit, investors get a rental income over 20 years – and poor communities get access to clean energy without the big upfront costs often associated with installing renewable energy, said Abe Cambridge, The Sun Exchange’s CEO.
Investors can use anything from credit cards to cryptocurrencies such as bitcoin to buy solar cells, with transactions managed via blockchain, he said. “With cryptocurrencies, the market is large and you access the whole world since you are using the internet. And the investor can put in as little as $10, which may not be possible in traditional markets,” Cambridge explained.
Since it was founded in 2015, the company has raised about $800,000 via the model to fund five projects in South Africa, generating a total of 700 kilowatts of power. It has sold over 150,000 solar cells to more than 1,000 buyers in 90 countries, Cambridge said.
One project powers the Cape Town offices of SouthSouthNorth, a South Africa-based environmental group. “What is fantastic about The Sun Exchange model is that it benefits us as the recipient of power and it benefits the people buying the solar cells – and it’s also a win for the environment,” said Carl Wesselink of SouthSouth North.
The Sun Exchange’s model of financing solar, he said, could help drive wider installation of solar panels and be “the catalyst required for realising our (distributed) energy revolution”. Cambridge said The Sun Exchange’s new partnership with Powerhive, which has operated in Kenya since 2011, would aim to fund about 150 solar projects “and then hopefully grow from there”.
He said he hopes to raise enough cash to generate up to 10,000 kilowatts of new clean power over the next five years. Chris Honor, Powerhive’s CEO, said his aim is to connect about 20,000 new households to power by the end of 2019.
The combined attraction of earning an income and helping some of the 600 million people living without electricity in sub-Saharan Africa should draw investors, particularly those who “want to be part of the energy revolution”, he said.
He said micro-grids his company has put in place in Kenya have so far powered things such as hatcheries and welding shops – commercial uses of energy rather than power for lights and charging mobile phones.
According to William Brent of Power for All, an organisation that promotes broader access to clean electricity, crowdsourcing has become central in financing energy projects in Africa and Asia, raising millions of dollars.
“In the past three years, crowdsourcing has become an important tool for many companies to raise capital to connect people to electricity for the first time,” he said. Several platforms are now offering crowdfunding for clean energy and that “will continue to grow, and to explore new and innovative financing models”, he predicted.
Such methods of raising funds are particularly important when “many investors are still learning to fully embrace the energy systems of the future”, he said.
Source: Thomson Reuters Foundation