Develop Economies is back after a brief hiatus.   I have finished up my work on my current project and am now taking some time to appreciate some of the aspects of Ghana I hadn’t had a chance to enjoy previously.  I spent a few days living with a rice farmer about 45 minutes by motorbike from Atsusuare in a small community along a lake fed by the Volta River.  I did some work in the field (very minor – I can’t say I’m a great farmer), came across two cobra snakes, and biked an hour each way to the next village with electricity to charge my cell phone and camera.  It was the first time I have ever actually experienced rural living, with no electricity, no running water, limited transportation (you have to call a motorbike to pick you from the neighboring town), and the persistent threat of snakebites, malaria, and other calamities that hang around waterlogged fields of paddy rice.  I have discussed on this blog the different solutions to the problems of rural energy delivery and distributed power generation, to the problem of inefficiency of burning charcoal and the use of clean-burning cookstoves, and others.  But I had never actually seen any of it or experienced it with my own eyes.

In terms of solar lanterns with mobile phone charging capacities, there is a huge need.  People have to travel an hour each way to get to the nearest community that is connected to the grid.  Once there, they have to pay 50 pesewas (about 30 cents) to charge their phones, and need to wait for two hours for the charge to complete.  They do this routine three times a week.  That means that 12 hours out of every week are spent on the activity (unless they couple it with a trip to the market, where they may also have electricity, or to see Manchester United play Chelsea, which is also necessitates the trip).   That is 12 hours of lost productivity, plus $1.20 for charging the phone each week.

For lighting, they use battery-powered lanterns, which provide a lot of good light.  They cost 3 Ghc (~$2) and require two batteries, which cost 80 pesewas (~$0.50) for the pair.  The batteries last for three weeks.  So, the upfront cost of the lantern is low, but the all-in cost per year is closer to $15.  That is relatively low for a quality source of light, and has a low weekly cost, which is amenable to the cash flow of farmers and other people living in rural communities and working in the informal sector.

The solar lanterns that NWTF, the MFI I worked with in the Philippines, sold and distributed were manufactured by a German company called SunTransfer.  They cost about $50, and are payable through a one- or two-year loan.  That means the weekly payment is either $1 or $0.50.  They have a long warranty and a lifespan of 3-5 years.  Interestingly, when I went to visit NWTF clients who used the lanterns, many of them cared less about the lantern component and more about the charging capabilities for their mobile phones.  Sometimes, it is not necessarily a purely financial decision, which one might assume when thinking about the value proposition of the product.  Mobile phones are a source of communication and productivity, and having access to a power source for charging your phone is of paramount importance.

So, from a financial standpoint, purchasing a solar lantern with a charging station makes economic sense, though only if it is coupled with a payment plan that is distributed over several months or years.  This payment plan replicates the low weekly cost of a battery-powered lantern and the travel to and from areas connected to the energy grid, and has a high value proposition in terms of convenience as well.  So, it turns out that there are actually huge opportunities in rural energy delivery for the BoP.

After I finished, I took a motorbike and a tro-tro back to Accra, then jumped on another tro-tro to Winneba(only after a semi-violent moment of chaos pushing to get on the next van, where a big Ghana mama climbed on ahead of me, while a guy behind me was pushing me, causing me to get a faceful of derriere in my proverbial grill.  After a wild ride from Accra to Winneba, I posted up in my friend’s place on the beach for a few days, where we attended the Aboakyer Festival.  The men go out into the bush and try to catch and bring back a live deer, which will be slaughtered as an offering.  Now I am in Elmina having my first taste of good electricity in a week, which is why I am finally giving my dear readers what I know they have been missing this last week: knowledge.


Josh

"Josh Weinstein is a visionary. I read his blog every day." - Bono

0 thoughts on “The Economics of Solar Lanterns with Mobile Charging Stations”

Zulfiqar Ahmed · October 29, 2015 at 7:24 am

interesting…I have been to Nigeria few times and situation is exactly the same.

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