The Market for PAYG Energy
Globally, more than 1.2 billion people live outside the reach of an electricity grid. Consumers in this off-grid world spend hundreds of dollars each year to light their homes and power small electronics like cell phones because they rely on expensive sources of energy such as kerosene lanterns and disposable batteries. Modern alternatives like distributed solar energy cost far less when amortized over time, but their comparatively high upfront price has kept them out of this market.
In East Africa, a typical family spends heavily on lighting and cell phone charging—often up to 20% of their annual income:
$2 every week on fuel
≈ $100 every year
$0.25 every phone charge
≈ $25 every year
Mobile phone penetration: The mobile industry in Africa is booming. Over the past 10 years, the number of mobile connections in Africa has grown an average of 30% per year and has now exceeded over 735 million. By 2015, the total number of mobile connections is estimated to reach 84% of the total African population. In addition to facilitating communication, this astonishing growth of mobile penetration is enabling innovative value-added services in healthcare, education, and personal finance.
Mobile banking services: More than a billion people in emerging markets have cell phones but no bank accounts. In recent years, mobile banking (“mobile money”) is rapidly filling this gap by offering financial services over mobile phones. To date, there have been more than 100 mobile money deployments in emerging markets. In Kenya alone, Safaricom’s M-Pesa mobile money service processes more transactions domestically than Western Union does globally, and provides mobile-banking facilities to more than 70% of the country’s adult population, equating to over 14 million customers.
The Angaza Solution.
Angaza’s PAYG platform capitalizes on these trends in mobile phone and mobile banking infrastructure to remove the upfront price barrier to solar and other modern sources of energy. Offering the option to accept energy pre-payments through mobile money helps our partners avoid the servicing costs of traditional loans, simplifies payment tracking, and streamlines the payment process for end-customers. Offering a suite of data transfer technologies designed for all tiers of off-grid energy products – from entry-level study lamps to high-powered solar home systems – finally allows our partners to make energy affordable to the massive off-grid market in the developing world.