Tuesday, Oct 26, 14:00-15:30 PM CEST
Although the solar market seems to be plummeting, the off-grid solar power is on rise. Innovative financing mechanism coupled with low production cost is now making off- grid solar affordable to the hundreds of off-grid population in developing countries. Nevertheless, the vital question of how to cater to the millions of the off-grid population remains? In recent times, there have been many new developments in the off-grid solar market and one of the rising concept is that of a solar kiosk. This concept is discussed in detail in this article.
Solar Kiosk - Concept
A solar kiosk can be defined as a self functioning system that not only produces its own energy but also additional energy to charge other products.The charged products are then rented out or sold to the customers. It can be both mobile and stationary depending on the kiosk operator's capacity and the customer's demand. It consist of photo voltaic panels that power the kiosk and may include additional batteries for storage as well as round-the-clock functioning of the kiosk. In some instances, the PV panels may be complemented with diesel generators for backup.A report from Endeva in 2014 has analysed 23 kiosks worldwide.
Solar kiosks target a very specific market: off-grid rural households who cannot afford solar home systems but still are willing to pay for electricity. Therefore, competitive pricing models are necessary to make sure that the solar kiosk can cater to these rural off-grid population and also compete with solar home systems.
Solar kiosks offer a variety of services ranging from simple charging stations (for lamps, lanterns and mobile phones) to providing other services such as cooling of drinks, running the television, internet services, selling retail products and in many cases offering a haircut using an electronic razor.
Apart from the classical business model, three types of business models currently prevail in the off-grid market and are summarized below:
Business - Business
Under this model, the kiosk companies develop the hardware (the charging stations) and then sell it to a local customer such as a NGO, bank, community operator etc.The kiosk companies,therefore, generate their revenue by selling the charging stations and are not responsible for running and managing the charging stations.
A classical solar kiosk includes only a charging station but a retail hub expands its portfolio by adding consumer goods as well as a variety of services. In many cases, after sunset, the solar kiosk is the only illuminated building and thus, serves as a meeting point. The solar kiosk can take advantage of this factor and increase its revenue by offering other services such as cooling of drinks, streaming of television as well as internet services.
Business in a box
Under this model, the kiosk companies sell small charging stations to local operators , who then use it to offer services such as mobile charging, lantern charging and so on.The charging stations have small power capacity and can charge from 10 to 20 phones or lanterns at a a time.
Challenges and Solutions
Solar Kiosks have a high upfront cost (ranging from 1,400 to 200,000 Euros for one kiosk and include expenses such as the cost of the land, construction cost and products cost) and also high recurring cost (such as replacing the battery every 2-3 years). Unfortunately, the revenues from a solar kiosk are very low ranging from 10 to 400 Euros monthly. This raises a question regarding the financial sustainability of the kiosks.
- For companies with high overhead costs, branching out into a number of profitable kiosks will distribute the overhead cost among the kiosks.
- Look for additional funding in terms of grants and donations to at least kick off the business.
- Cut down the manufacturing cost of the solar kiosk. For the kiosk housing, use local materials and labor.
- Along with the charging stations, offer additional services such as TV screening,photocopying and other IT services to diversify the portfolio.
- Partner with big corporations to mitigate the cost. For example: ARED's solar kiosks have entered into a contract with Airtel, a mobile company to brand the solar kiosks with Airtel logo in return for financial support.
For companies operating the solar kiosks in multiple locations, they are completely dependent on the local operators for the day-day running and maintaining of the solar kiosks. However, there are reports of theft as well as clashes between the management culture of the companies and the local kiosk operators. In many cases, the local operators are not competent enough to run the solar kiosks efficiently.
- Define minimum criteria (such as business experience, basic sales and accounting education etc) for the operators so that they can effectively run the kiosk by themselves.
- Provide initial business training as well as follow up trainings to the operators.
- Supervise the activities of the kiosk operators with regular follow up calls
- Choose an appropriate business model for kiosks such as franchising or employing operators.
Accessibility of the Solar Kiosk
One of biggest concerns of the solar kiosks is how to reach the targeted audiences and increase their trust in the solar kiosk as well as the solar products being sold? Since most of the customers are located in rural off-grid areas, the traditional advertisement methods like TV, radio might not not feasible.
- Conduct door to door marketing as well as on-site demonstration of the usability of the product
- Target the head of the villages or other elder members who are highly respected. This will increase the trust of other villagers on the solar products being sold.
- Conduct awareness campaigns about the health effects of kerosene lamps and other lighting alternatives.
- In most of the rural settings, women and children are the one collecting the charged batteries or lanterns from the kiosk. Therefore, making these products lighter and water and shock resistant will increase their attractiveness to the households.
- Depending upon the customer density around an area, it might be beneficial to branch out into a mini mobile solar kiosk in case of a stationary solar kiosk.
Most of the customers might be located far off from the location of the solar kiosk and may be poor. In case of a stationary kiosk, the most important question is how to provide quality and affordable services to these remote customers:
- Implement home delivery services for customer who live far off from the kiosk. For example, the kiosk owner can hire helpers to drop the charged batteries or lanterns to the customers as well as pick up the empty ones. This will reduce mishandling of the products.
Collection of payment is an important task for the kiosk owner/operator. However, the low income of the targeted customers as well as the fact that they might be far from the solar kiosk could pose a problem for the owner.
- Mobile money such as MPESA is a reliable and easy way to collect money from the customers.
- Offer payment schemes such as pay as per charge, pay per day or if feasible a monthly charge.
- Set the electricity charge equal or lower than what the households would normally pay for the alternative energy (such as kerosene, candles) for the same amount of light.
Mishandling of Products
In many cases, products such as batteries or lanterns are rented out and not owned by the customers. This makes the customers less accountable and could result in mishandling of the products.
- The kiosk owner/operator should establish a clear contract with the customer to set the rules for ownership as well as for rental services. It should also held the customer responsible in case of mishandling.
- While renting out products, the customers should be required to deposit upfront. This deposit should only be returned when they return the product or should be used to reimburse the kiosk operator in case of damages incurred. However, asking for deposit upfront can be tricky as most of the customers are poor and might not be able to afford this additional services.
After Sales Service
Like with any other business, after sales service is an important aspect of running a solar kiosk. However, in case of a solar company owning many solar kiosks in remote locations, it might be days before they could deploy technicians to go to these places and fix the defect products.
- Provide technical training to the local operators to ensure fast and efficient after sale services
- Conduct technical training as well as awareness programs so that the local population is familiar with the basic maintenance of the solar products and could adopt behaviors that prevent wear and tear of the product.
- Conduct regular feedback loops and surveys to understand the problems, people face about using a particular solar product. Additionally, keep in touch with the key persons in the village to continue with the feedback loop about the possible difficulties that the local population might face while using the solar products.
Solar Kiosks - Examples
The section below presents some of the companies working with different solar kiosk models.
- Berlin based company
- designed by Andreas Spieß and GRAFT architects,
- the company has deployed numerous solar kiosks
- the solar kiosks are stationary and run by local operators
- each kiosk has solar panels with 1-4 kWp of photovolatic capacity
- battery included for 24/7 operation for power back up
- the flexible structure allows one to adopt it to the local manufactures material and expertise such as wood, aluminum and steel.
- can be expanded to different infrastructure structures such as health clinic, police station, telecom tower, internet service stations,
- remote monitoring
- smart metering
- deployed in Ethiopia
ARED Mobile Solar Kiosk
- Rwandan company
- currently working in Rwanda and Burundi
- the company owns the solar kiosks that are rented out to local operators.
- includes a mobile charging station for public places powered by solar energy
- the kiosk has a battery with two retractable 40-watts solar panel and thus can be used even sunset.
- currently working in Rwanda and Burundi
- offers low-cost mobile phone charging services and other consumer products such as mobile money transfers, mobile air time and plans to provide WIFI services in future.
- mobile kiosk
- can be remotely monitored
- prototyping with new models
- founded in 2012
- based in Madagascar
- stationary kiosks run by local women operators
- kiosk are designed to last the extreme weather condition in Madagascar including both cyclone with wind sped up to 250 km/hr as well as severe flooding
- includes roof top solar that powers a lot of household appliances (such as lamps and phone chargers) which the customers can either purchase, pay for per use or rent for varying lengths of time.
- flexible payment services to customers
- all kiosk offer lamps and phone charges, some offer additional products like cooling drinks,printing or cutting hair using electric razors.
More Information: http://www.beheri.com/NL
- Endeva ( 2014).The Energy Kiosk Model: Current Challenges and Future Strategies. http://www.endeva.org/wp-content/uploads/2015/08/endeva_the_energykiosk_model_2014.pdf