This idea is a part of 360 Challenge 2019
Solar4Schools is an idea born in Aalborg, using European technology to develop an off-grid solar system for schools in developing countries (Kenya as the first market) who are struggling with access to affordable and clean energy. It enables schools to access off-grid solar power, save cost, improve health and generate sustainable revenue from a phone charging business.
Innovative payment approach enabled by IoT & Mobile payments
By changing the assembling process, Solar4Schools has designed a unique, off-grid solar product with fewer parts. Thanks to mobile payments and IoT technology, we have come up with an innovative payment approach that enables the wider community to use and pay for phone charger services.
Kenya is a country with an enormous potential for investment in solar energy. While its use in the country is increasing, at present it is problematic. This is because most solar panels in the country are designed for homes. As a result, they are not powerful enough to power schools, and often come with unnecessary features. Consequently, they need to be used alongside kerosene and candles, thus increasing the cost for schools. However, our product provides enough solar energy so that schools can be completely reliant on the solar panels. Additionally, this is connected to an automated charging station, enabling communities to use and pay for the services. In such way, schools can afford a larger solar system together with the community. Schools will benefit from reducing expenditure, as well as seeing improvement of grades as confirmed by research. The community will also benefit by not having to walk 10km to the town for phone charging, but rather go to the school, which in turn will place schools at the centre of the community.
Solar4Schools will act as the link between the needs of Kenyan schools and Danish technology. As we have staff in Kenya, we will be able to keep in touch with schools that have bought our product and provide them with a quality customer service. Any feedback can then be relayed back to our management team in Aalborg who can then discuss with our partners and advisers.
In current market, there are competitors yet mainly for household segment (<=100w) rather than school segment (200-300w). While solar systems exist and solar chargers exist, we are the only company to offer a solar system with an auto charging station. After members of our team conducted 122 interviews in the country, we have concluded that this is the product the schools want. Despite currently being at the pilot stage with our 1st prototype, we have already received three pre-orders for it. At Solar4Schools we aim to use ideas born in Denmark to power up Africa. At present, our components are being sourced and constructed by our ground team in Kenya. We will make use of our European tech partner for technical assistance and our Danish advisers for technical advice. We stand apart from our competitors in that we have extensive contacts in the country (Kenya). While other companies are capable of producing similar technology, they lack the distribution network to establish a presence in the market (based on competitors’ feedbacks from interviews). Through our team in Kenya and our co-founder’s schools’ network from previous work experience in Kenya (with local schools, community, organizations and school associations), we intend on building our own network of schools.
Since Sept 2018, we have spent 9 months validating the business model (lean startup method & design thinking) and our minimum variable product (MVP). In the first 5 months, we validated the business model by conducting 122 interviews with schools across 3 regions in Kenya, tech partners, manufacturers and solar experts. After identifying schools’ needs and business feasibility, we spent 3 months building the rough prototype (MVP 1.0) with validated features. We just finalized the MVP 1.0 and are currently preparing for the pilot in Aug 2019.
We have a team in Kenya, whom we have been working with for 3 years. In addition, due to our previous work in Kenya since 2016, we have already accumulated 11 schools under our pipeline, under which we received 3 pre-orders. To ensure we have the right technical competences, we have partnered with energy technology department at Aalborg University, receiving technical advice from their professor. Moreover, we have Mads Wraa Hyttel as our adviser, bringing in over 10 years of product development experience in the energy sector.
Profitability and scalability
Based on our market research and ground validation, we see the great potential of the market teem with unmet needs for vast middle market that can be fulfilled at a profit. According to WorldBank and McKinsey Africa Panel Progress Report 2015, globally, 2.86M schools in developing countries are spending $856M annually on brown energy (i.e. kerosene). In Kenya alone, there are 5700 schools spending $17,1M per year on poor energy. Taking 10% of this available market in Kenya, the projected revenue in the long term would be $2,8M. After getting the business model validated in Kenya, it can be scaled up to other developing countries (e.g., Africa/ south east Asia). More details about the revenue model can be found in the attached file.
Solar4Schools is built around a simple rollout strategy with the customer at the focus. This enables us to get immediate feedback on the user from the early beta phase through scale. The simple rollout strategy becomes increasingly complex and profitable as Solar4Schools captures market shares. Early on we will conduct a pilot in Nairobi in order to test the prototype (2019). After refining the product and business model, we will launch the product and reach 20 customers through partner organization in March 2020. Based on its feedbacks and results, we will build our school distribution networks together with our local partners and start to reach 100 customers (through marketing) since April 2021. If the refined business model is live we will have validated demand sufficiently to start large-scale tendering processes with UN agencies and INGO’s. In mid 2022 we will be launching efforts into building and managing a sales department with sales agents thereby further reaching 500 customers.
Sustainable objectives and impact
Solar4Schools is working with the global goals in that our business provides a clean and affordable source of energy for schools (SDG 7), so that they will no longer need to rely on brown sources of energy. Our intermediate goal is to provide affordable off-grid energy. As we are targeting school segment, it also touches upon goal 4 – equitable quality education, so that students’ grade can be improved and schools can reduce electricity payments. In such way, schools are less likely to run out of money and go bust, a common issue for schools in the region.
At the current stage (1st pilot), we aim to deliver solar systems to 3 communities, so it can benefit over 1000 students and the surrounding areas with clean and affordable energy. Schools who use our system will switch from kerosene-driven operational model, to having more than 50% of their electricity coming from solar energy. It not only reduces their spending from $25 a month to $10 or less in the long term, but also can provide students a pollution-free energy source. By bringing in Danish technology and advice for the automation process, our system can allow the community to also benefit from a clean energy source to charge their phones, and contribute to lead the change to clean and affordable energy.