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Selling Solar Panels on the Installment Plan in Africa

A host of startups are competing to electrify the poor
Selling Solar Panels on the Installment Plan in Africa
Courtesy Azuri technologies

An estimated 1.2 billion people worldwide live without electricity. Many depend on kerosene lamps to light their homes—a fuel that has ill effects on health and is costly. Solar power might seem the better alternative in sunny parts of the world, except the poor can’t afford the upfront cost of the equipment, which starts at around $50 for a modest rooftop system. “Even though photovoltaics have become much more affordable over the past 10 years, it’s still too expensive to be competitive with other sources of energy,” says Paul Polak, a social entrepreneur who has spent the last 25 years creating affordable tools used by millions of poor farmers and is now working on a solar water pump.

Some solar startups are addressing the problem with creative financing models. The goal is to help low-income families meet the cost of installing solar systems by letting customers pay for them in installments. The ventures, which include Angaza Design and Powerhive, both headquartered in California, as well as SunTransfer in Germany, aren’t philanthropic. They’re trying to lure away business from kerosene suppliers. “People who are buying kerosene today have money,” says Wolfgang Gregor, secretary general of the Global Off-Grid Lighting Association, a lobbying group in Paris founded last year. “We want to take a bit of the money and offer them better light, more light, and, of course, cheaper light. The losers will be the big oil companies that sell kerosene.”