PAYG Solar

28 Mar

MLC Vanguard | Created by M-KOPA

M-KOPA offers a range of pay-as-you-go solar home systems, from smaller solar panel bundled with a lithium-ion battery control unit, rechargeable torch, radio, 4 LED lights and phone charging facility to a large multi-light system inclusive of the aforementioned plus a 32” flat-screen TV - suitable for homes or micro-enterprises.

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3,000,000 Lives Impacted

To date, M-KOPA has provided a clean source of electricity for over 3 million individuals and achieved an ongoing repayment rate of approximately 95% - proving our PAYG solar model unlocks immediate value for low-income individuals and enables them to establish creditworthiness. Impact achievements to date include:

>1 million loans unlocked for unbanked, low-income Africans;
1.7 million tonnes of displaced CO2; and
• >$400 million accumulated household savings from the displacement of kerosene lanterns.

A few key statistics:

71% of M-KOPA customers report they save money by displacing kerosene and phone charging expenditure with M-KOPA, saving approximately $650 over the lifetime of their systems, amounting to over $400 million in increased household budgets across our customer base.

To date we have filed 250,000 positive credit Reports. Social and development outcomes tied to displacing kerosene lanterns with solar energy are significant and growing. By our measure, in 2018, M-KOPA customers safeguarded themselves and family member from more than 1.2 billion hours of dreadful kerosene use. As a result, customers report that children double study-hours, 60% report a material improvement in health from reduced fume inhalation, and all avoid the needless risk of housefire and injury.

Lastly, nearly half of all customers acknowledge an M-KOPA solar system enables more time to pursue productive activities, whether that is getting a new job, working longer hours, or supporting a business. We estimate more than 140,000 M-KOPA customers directly generate income through local phone charging services, hosting movie screenings, or using solar lighting for a business, increasing household budgets by 32%. Anecdotal evidence suggests it’s the women of households that capitalize on solar ownership, stoking increased agency in the home and shifting the role of women in rural communities.

The Innovation

M-KOPA’s mission is to upgrade lives by making high-quality solutions affordable to everyone. In 2012, M-KOPA Solar, based in Kenya and Uganda, pioneered the solution to meet the needs of those in energy poverty and safeguard our environment. Specifically, M-KOPA designed a human-centric product that makes clean energy solutions affordable and cheaper than traditional, carbon-based fuels, and sold on a flexible, pay-as-you-go basis that enables customers to establish creditworthiness.

M-KOPA’s PAYG proposition addresses two social and economic barriers for low-income, rural communities:

Displacement of harmful energy sources with clean, long-lasting solar energy for lighting and appliances, and
Access to affordable credit to enter financial inclusion.

M-KOPA offers a range of solar home systems, from smaller (8W) solar panel bundled with a lithium-ion battery control unit, rechargeable torch, radio, 4 LED lights and phone charging facility to a large (60W) multi-light system inclusive of the aforementioned plus a 32” flat-screen TV - suitable for homes or micro-enterprises. The solar systems are sold on a pay-as-you-go basis, meaning customers repay the capital costs of solar home systems over time, using a combination of mobile payments and embedded machine-to-machine connectivity. To acquire a system, customers pay an initial deposit and send daily micro-payments thereafter using mobile money services for a pre-defined number of instalments until customers own their system outright. Throughout the loan period, though, M-KOPA maintains remote control of the solar device in the event customers cease payments. However, allowing customers to repay flexibly over time has achieved a 95% repayment rate, many customers unlocking additional loans for life-enhancing products and services after establishing creditworthiness and asset ownership.