Friday, May 16, 2014

Another Quick Thought on Solar

There are some exciting successes in the world of solar recently.  But those successes, at least the ones that I consider successful, are not occurring in North America or Europe.  They are happening in Africa.  Solar Aid just announced that it had sold its one millionth solar light in Africa.  Quite impressive and I think that their business model / aid model is a sensible one.

What is noteworthy about this success?

  • It took time and a lot of effort to educate people: the standard lighting option for many folks in Africa is a kerosene lamp.  This is reasonably cheap upfront, but then has on-going marginal costs in terms of fuel, time (getting fuel) and health (fumes).  A fair amount of work had to go into convincing people to make a relatively large investment for a solar light, but then face no marginal costs.
  • Adoption can come quickly: Solar Aid is using a standard distribution approach, paying merchants, etc. to sell their goods.  Their goal is to get life-improving solar powered devices to as wide a range of people as quickly as possible, so this make sense.  Once people understand that solar is cheaper (the education work has been done), they will make the right choice and adopt quickly.  1 million is impressive, but I'm guessing that there will be a flood of solar in Africa in the next couple of years.
  • Adoption is happening because it is the best option:  This is good and bad.  Bad from the standpoint that solar is still relatively expensive (do the math as a US-based electricity customer and there is no way you beat your local utility without subsidies).  We have better options here in the US and its too bad that they do not in Africa.  But, it is awesome that they are getting better options that should have positive benefits from a human health and welfare perspective (strong parallels to mobile phone technology?).  I continue to be a believer that technology has the potential to help the planet's billion poorest people, many of whom live in Africa.  Technology, along with a vision and drive to make people's lives better (which I think can come from both a profit perspective, or as in the case of Solar Aid, from an altruistic perspective).
  • It remains to be seen how long the solar lights/batteries actually last: my guess is that there will be a substantial amount of variation in quality of these cheap lights (they need to be - very price sensitive application).  Hopefully, there are not bad apple manufacturers that pollute the market with crappy lights and thus dampen customer adoption.  Overall, I remain optimistic.

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