File:Van Asperen - Solar lighting for the off-grid BOP in Kenya An analysis of business models and challenges to growth.pdf

English: 1.5 billion people worldwide do not have access to electricity, while energy is an important

requirement for development. Households without access to electricity usually rely on kerosene for their lighting needs. Compared to electrical lighting the use of kerosene causes health problems, is less safe, produces a lower quality of light, is more expensive and results in higher CO2 emissions. As households without access are usually poor they cannot afford large investments to move away from kerosene lighting. Recently solar lighting products have been introduced that are especially designed and marketed for the poor off-grid population. These solar lanterns and small solar home systems (these products are referred to as pico solar) with retail prices starting at around $15.00 are regarded as an ideal opportunity for these people to move away from kerosene lighting. Nevertheless, the majority of poor off-grid households still depends on kerosene. For this research 13 interviews were held in Kenya with representatives of companies and NGO’s offering pico solar products. Several challenges were identified that the interviewees face while growing their operations. The four most important are affordability, poor quality products, consumer awareness and distribution. The targeted customers for pico solar products are the extremely poor, also referred to as the Base or Bottom of the Pyramid (BOP). Offering products to BOP consumers requires an approach adapted to the harsh conditions of the BOP environment. This calls for business model innovations. This research describes the way in which companies and NGO’s have designed and

adapted their business models to the BOP conditions.