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Econet Solar’s home power station. Some thoughts

   

Econet Wireless recently announced Zimbabwe as the first commercial site for its highly acclaimed solar powered ‘Home Power Station’ (HPS), this according to a report on the mobile phone company’s website. The announcement is welcome news in a country characterised by chronic load shedding and power failures. Econet’s Corporate Communications Manager Ranga Mberi confirmed to Techzim that the company was launching the product in Zimbabwe initially on a commercial trial period and would in due course provide more information. So does the launch promise a brighter future for Zimbabwean electricity consumers?

Well lets start with the unit itself. The Home Power Station is a device that contains a typical Econet mobile SIM card enabling the device to link up with the cellular network, making it possible for the customer to pre-pay for energy usage, in the same way mobile phone users currently pay for airtime on their cell phone. Connected to the unit are batteries, a 4 light system with 4 switches for each light, a solar panel which goes onto the roof and generates that power for the batteries. The device also features a socket for charging your mobile phone and compatible to the GSM network.

Econet Solar is targeting Africa’s 500 million off the electric grid population. Econet Wireless Group Executive Chairman Strive Masiyiwa in 2011 explained the motivation behind the device was prompted by the lack of “electrical power in major parts of the continent (Africa) or there is massive power deficits, so people get power cuts or the power supply is not reliable…what we are trying to do is to get people to think differently about where power comes from. We have all been raised to think that power comes from one big central power station which then feeds power to homes and industries through a grid. What we are trying to do is to break that down and say the power station can be in your home. So the Home Power Station is a solar powered power station, a little power unit that provides lighting and energy for your home”

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There are two issues that can be raised about the HPS. Firstly pricing, both of the unit and the power. The pricing of the unit and the financial model employed is analogous to the contract phone model. As Econet Solar CEO Marco Signorini has noted “the financial model is a subsidy model, just like a mobile phone you don’t pay for the unit upfront you take an agreement or contract with us.”

This is an interesting analogy and on the face of it makes sense. There is however a difference between the phone and HPS unit models. Phones are trendy consumer devices and the HPS is an appliance that you basically put in the background and largely forget about. So a fundamental driver of phone sales is the constant need or more accurately desire to upgrade one’s phone so as to have the latest trendy gadget or to take advantage of new technical features

So for a mobile phone network consumer behaviour in constantly buying and upgrading phones is a major profit driver. In Zimbabwe, though most phones are not bought using this model. Signorini hints at the financial sweetspot by noting that the device converts airtime minutes into energy, this therefore offers the company a potentially infinite (time wise) revenue stream.

As novel as Econet Solar’s technology is the key question will be how it fares against it’s direct competition in the form of solar panel and inverter system which is readily available. The prices of a solar panel system from a local retailer are as follows:

The real innovation that Econet Solar is providing is financial as the consumer now has an option to obtain an energy system without making a significant upfront payment as shown in the table. An additional benefit noted by Signorini is that installing the HPS unit is basically DIY, whereas with other systems one tends to require some expert assistance to install.

Econet Solar have conducted their first trials in South Africa (KwaZulu Natal province) and it’s interesting to note that the country has conducted some interesting public policy experiments of providing electric power to poor households. One such program is the Free Basic Electricity (FBE) scheme which offers 50 kilowatt hours per month for free to most households that have access to electricity. The 50 kwh monthly was set to cover the electricity necessary for basic lighting, a small black-and-white television, a small radio, basic ironing and boiling of water using an electric kettle.

The Energy Modeling Group of the Energy Research Centre (ERC) at the University of Cape Town has conducted several studies about power usage among the poor in places like Khayelitsha township (Cape Town). The Energy Modelling Group found significant uptake of the FBE program by low income households. The Energy Modelling Group cites surveys of energy budgets in extremely poor electrified households that show that these households use power sparingly, typically 20kwh per month when they have to pay for electricity. In this environment electricity is more expensive than traditional alternatives such as coal or firewood for cooking and heating so the rational household watches this budgetary item like a hawk.

Low income households also proportionally use more power for heating water and cooking which they compliment with Liquefied Petroleum Gas (LPG) or paraffin/kerosene. In such a scenario the HPS would represents one solution in a portfolio of applications in providing a comprehensive power solution to low income or off grid households. In Zimbabwe though, at some point every household is off grid, so this product’s appeal will extend beyond the low income base. Its use in an urban setting is bound to be for households that can afford a generator/ invertor or solar/inverter system, but would not be redundant for those who cannot.


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