5 Things You Should Know About the Future of Electricity in Rural Africa
When the sun goes down, much of rural Africa is left in the dark. More than 600 million rural Africans are without electricity and use dangerous, polluting and expensive energy sources to dimly light their homes.
For the last two years, I, along with Lauren Kickham, have led philanthropist Paul Allen’s Vulcan Impact Investing efforts to help plug in Africa. Partnering with steama.co, a remote monitoring company, we own and manage 10 solar powered mini grids that provide clean electricity to rural Kenyans.
The project has been impactful and enlightening: here are five things we’ve learned so far.
1. Unlocking access to energy using mobile phones
Throughout rural Kenya, consumers are accustomed to pay-as-you-go mobile services via their cell phones. Since cash flow can be an issue, if the power goes out due to lack of payment, with a quick tap on their cell phones, our customers can make instantaneous micro-payments to turn the lights back on. One-time payments can be as low as $0.10 with some customers buying electricity as often as five times per day.
2. Breaking up with fossil fuels
It’s remarkable how many of our customers are willing to shift away from an energy source they’ve used their whole lives. Prior to the installation of our grids, 86% of our customers used unsafe and unhealthy kerosene, disposable batteries or diesel generators to meet their energy needs. Post-grid installation, only 4% of customers are still using any of these fossil fuels.
3. Going off the grid and into the 21st century
At the current rate of connecting new homes to the national electricity grid, it will take more than 60 years for every African to have access to affordable, reliable, sustainable and modern energy — an UN Sustainable Development goal.
Privately operated renewable energy mini grids, on the other hand, can be installed and operating in a matter of weeks. Mini grid companies — much more nimble than national governments — are providing clean and reliable to consumers. They are also making connections to electricity more affordable.
4. Turning on more than just the lights
Appliances are critical to driving electricity demand and making mini grids profitable and sustainable. Our customers tell us that they would buy more electricity if they could afford more appliances, but they often struggle to afford these refrigerators, TVs, welding machines, etc. We’re working to develop a program which will enable our users to access appliances either through a leasing or a rent-to-own program.
5. Electricity is sparking economic development
Simply put, the arrival of power allows for entrepreneurship and opportunity, particularly for rural youth. The majority of new businesses in the villages we’ve electrified have been started by younger and tech savvy customers. We’ve learned that, as a result, more young people are staying in the villages because of this newly available job opportunity.
Read more here about what we’ve learned so far.
There’s still more to learn about our mini grids like how electricity is changing the lives of our customers, if electricity consumption changes over time, and how profitable mini grids can be. One thing is clear, though, rural Africans want electricity and Vulcan Impact Investing will continue to share our lessons so that, together, we can power Africa.