Energy innovation opens doors for the world’s 1.3B “energy-poor”
InterSolar is on this week in San Francisco. While it’s been a rough year for the upstream folks, and the tradeshow floor may have a New-Year’s-Day-hangover feel about it (notable exception: the focus on the burgeoning energy storage field), some bright spots emerge. As I nurse my own hangover from last night’s Solar Battle of the Bands, I’m reflecting on a terrific side-event that featured some of the world’s most exciting energy innovators.
The Bay Area Energy Access Working Group (a name only an engineer could love) yesterday convened entrepreneurs blazing pathways out of energy poverty. The group, hosted by Google.org at Google’s San Francisco offices, shared new approaches to delivering energy services to some of the 1.3 billion energy-poor people across the globe. New financial tools, new communication technologies, and new business models drive energy innovation in the developing world just as they do in the rich world. The event’s three panels addressed these drivers.
Finance innovation might be the most important current development. Many of the technologies used to deliver life-altering energy services to off-grid, rural communities have long been established. Solar lanterns come to mind. Now, though, we require the money to deploy these technologies at scale. Several companies are building crowdfunding pathways to bring Western finance to the task. Ryan Levinson, a former vice president in Wells Fargo’s Solar Finance division, founded SunFunder. Riffing off of Kiva and Kickstarter, the web platform offers users a chance to become small-scale project financiers, chipping in to support solar installs across the world. SunFunder is wrestling with regulatory obstacles to providing returns to investors, but if those can be resolved, Levinson sees potential for companies like his to deliver a billion dollars a year in finance to the developing world.
Once SunFunder proves that its model carries an acceptable risk profile, Levinson asserts, major financial intuitions will pile on, bringing international energy access finance “beyond the crowd.” The finance panel also featured Kiva’s Cynthia McMurry and Mosaic founder Dan Rosen. Mosaic, which offers users a chance to invest directly in domestic solar projects, is developing tools for international investment that would flow through international organizations.
Mobile phone technology will also light up the unelectrified world. While relatively untapped in rich countries, mobile payment is the norm in much of Africa. The Economist reports that almost 90% of adult Kenyans are signed up as users of leading mobile-pay service M-PESA, and “Cash equivalent to nearly one-third of Kenya’s GDP washes through the service.” Mobile pay enables technology panelist Lesley Marincola’s Angaza Design to use “Pay-as-You-Go” to provide solar lighting to people who cannot afford a $20 upfront cost, but who may be able to pay $1 a week for lighting services. The technology panel also included micro-grid developer PowerHive’s founder Chris Hornor and pre-pay metering developer (among other things) Lumeter’s co-founder, Grant Hunter.
Finally, I attended a panel on the challenges of distributing products in environments with limited distribution channels. It featured Fenix International founder and CEO Mike Lin, SunnyMoney’s Vincento Caopgna, Living Goods’ Joe Speicher, and WeCare Solar founders Laura Stechel and Hal Aronson. Aronson noted that the cost of transporting a replacement 12v battery to a remote Ugandan clinic can exceed the cost of the battery (my favorite solution: aerial drone networks!) Lin mused on why Fenix chose a for-profit approach, saying it has enabled greater access to faster-moving capital. Confirming this sentiment, the conference audience included at least one investor who saw VC-multiple returns in the future of energy access in emerging economies.
As the afternoon deepened, PowerHive’s Hornor, one of the veteran practitioners in the room, galvanized the group with his vision, “I hope that in 50 or 75 years we are looking back at how we solved the problem of energy access.”