According to the World Bank data on energy access, the percentage of the Kenyan population with access to electricity is about 75%. While this may be a major improvement compared to about 5 years ago, where only 50% of the population was connected to the national grid, the majority of the rural population remains in the dark.
As the Rural Electrification Project continues to make good strides, it remains agreed that decentralized solutions play a crucial part towards universal energy access.
Kenya has been leading other nations globally in adopting new technologies, with Pay-As-You-Go solar packages adoption becoming significantly high.
The solar packages provide lighting, charging, and powering appliances such as TVs and fridges. In Kenya, 65% of the demand for PAYGo systems is for lighting, while 61% of the demand is driven by the need to have a complete home system.
How do PAYGo solar systems work?
A typical Pay-as-you-go Solar home package would include the following?
- A Solar PV power plant has solar panels, an inverter, and cables.
- Battery storage system
- Mobile payment system
- Information and communications technology with control units providing information such as the charge left on batteries, and payment reminders.
- Appliances such as bulbs, mobile phones, radios, TVs, and fridges.
A PAYGo package varies from a very basic power supply including lighting and phone charging to more comprehensive packages that allow powering multiple home appliances. In Kenya, the two widely used models by the solar package providers are either a lease-to-own model or a usage-based payment model.
In the lease-to-own model, customers pay for the entire solar package system of their choice in small installments over some time. On the other hand, the usage-based payment model involves customers prepaying for the electrical supply. This is similar to how Kenya Power prepaid service works where a customer loads money onto a prepaid meter and uses the amount of electricity that corresponds to the amount of money paid. However, it is worth noting that over 90% of the solar packages operate using the lease–to–own model.
Perhaps the biggest driver for the growth of solar home packages is the widespread use of mobile payments. On either the lease-to-own or use-based plans, the payments are usually done through M-Pesa or Airtel Money. The systems can feature a remote monitoring system that can be activated via a mobile network connection. There are PAYGo solar home systems without remote monitoring systems, but still have a SIM card built in to allow the service provider to shut them down remotely if payments stop. Also, the service providers equip their systems with a GPS tracker to be able to locate them anytime.
Major PAYGo Service Providers in Kenya
This is perhaps the most famous and among the oldest PAYGo Solar system providers in Kenya. Started in 2012 as a solar energy company, M-Kopa has built one of the world’s most advanced PAYGo platforms and expanded the product line from lighting solutions to everyday appliances such as fridges, mobile phones, and TVs. Primarily using the lease-to-own model, M-KOPA sees itself not as a solar package provider, but as a financial partner for thousands of underbanked population in the rural areas.
Depending on the package the customers choose, they pay as little as KES 3,500 of deposit and KES 50 daily installment for one year to own it.
M-Kopa has received recognition globally. In 2019, the company was named among the global Cleantech 100companies. Also, M-Kopa made it to the list of the World’s Most Innovative Companies list by Fast Company of 2018. To date, M-Kopa has reached more than 3.7 million people with their services within Kenya, Uganda, and Nigeria.
Azuri is yet another innovative company in the PAYGo solar home systems scene in Kenya. Just like M-Kopa, Azuri provides home solar systems to off-grid customers on the lease-to-own model. Customers pay a one-off installation fee to get an entry-level PayGo solar home system, after which they use an integrated mobile money service to top up their units. Within an average of 18 months, the purchase of top-ups allows the system to be paid off, and the customer can choose to either unlock their Azuri system forever or upgrade to a larger model.
Headquartered in London, Azuri has footprints in 12 countries in Africa. The company has also gained a lot of recognition and awards globally, including being named by the World Economic Forum among the most innovative technology start-ups around the world.
Engie, which is the subsidiary of Fenix International is the company behind Mobisol. Just like the other solar home package providers, Mobisol Kenya focuses on the rural communities that have limited access to the grid. Their smallest package is a 40W Solar Home System which comes with lighting and a 22” HD LED TV. Other packages include phone charging kits, torches, lights, radios, and varying sizes of TV, and range from 80W to 200W. The prices also vary from an initial down payment of KES 1,900 to KES 5,700 and repayment periods of 36- 48months.
Like other PAYGo service providers, the gap that the company is filling is not only for providing lighting, but also financial inclusion to millions of underserved communities in Africa.
D.light not only has a vast reach in Kenya but also globally. The company has a presence in 70 countries, directly impacting over 100 million people who were previously disconnected from electricity. Like other providers, D.light offers packages that provide lighting and power gadgets ranging from a few appliances like phone chargers and TVs to multiple appliances like fans and shaving equipment. Down payments also range from KES 2,500 – 6,000 and repayment plans average 36 months, based on the package size.
D.light has over 25,000 shops around the world where customers can buy their products.
- Greenlight Planet
Greenlight planet solar package system brand is popularly known as Sun King. The company has a presence in Kenya, Nigeria, Tanzania, and Uganda and operates in the same model as described for the other companies above. Sun King packages range from a portable LED Lamp, stand and, and a USB charging cable to a 120W package including an LED TV with a built-in decoder, lights, and charging ports. The prices also range from as low as KES 1,000 to 4,000 with an installment plan of up to 8 months.
The list does not end here. There are over 21 solar providers in Kenya. Other notable companies offering solar home systems include BBOXX, Pawame, and Sun Transfer.
Surprisingly, most home solar companies are international companies with footprints in other countries especially in Asia and Latin America. For these companies to break into the market, the mother companies make strategic decisions and get funding while the local branches focus on the last mile distribution.
Sun Transfer is one of the very few solar home system service providers that is entirely owned by a Kenyan company. To survive in this competitive market, the Kenya company focuses on distribution and outsources the manufacturing part of the business. This way, the company can adapt quickly to the customers’ demand, and also avoid the heavy capital requirements for manufacturing.
Lack of connectivity and unreliability of the national grid are the main reasons for the high demand for off-grid solutions. Besides, solar home systems do not only provide solar but the much-needed credit facilities to the underserved rural populations. Lastly, bundling more products such as smartphones, TVs, fridges, and water pumps to their solar solutions makes the PAYGo systems address gaps and needs in the communities and has led to their increasing success in the country.