The EEP S&EA series of publications on Innovative Business Models highlights successful business models created by EEP project developers. The aim of the Innovative Business Models is to share lessons learned and provide innovative ideas that could be replicated or developed further in other renewable energy sectors. The IBM’s published so far introduce key innovations in the payment model of cookstoves, an entrepreneur model targeting the very poor customer segments with LED-lights, a turn-key service model in boiler/furnace conversion, a breakthrough technology combining clean cooking with device charging and a sustainable biodigester. Take a closer look at the Innovative Business Models below.
If you wish to share a story of the innovative business model used in your EEP project, do not hesitate to contact us at firstname.lastname@example.org.
Innovative Business Model:
SunCulture manufactures and finances solar-powered water pumping and irrigation systems for smallholder farmers across Africa. SunCulture’s goal is to provide cheaper and more sustainable way to grow high quality vegetable by replacing expensive and environmentally harmful fuel pumps with efficient solar pumps and by offering a wide range of affordable irrigation solutions.
Lack of access to tools, knowledge and financing keeps the productivity of African smallholder farmers low. Besides the pumping and irrigation products, SunCulture supplies installation, soil sampling and other services. SunCulture’s financing platform “Pay-as-You-Grow” aims to close the financing gap which is major barrier for development of the farmers. Switching from rainfed agriculture to using irrigation system can lead to over ten times higher income for the farmer.
With a range of products SunCulture can easily scale up and down the product ladder to serve customers cultivating a small 1/8 acre plot up to 200 acre farms. SunCulture products are easy to use, maintain and acquire. The cutting-edge pump controller automatically optimizes solar pump’s performance and battery charging based on cloud cover.
SimGas is a rapidly growing biogas company currently operating in Kenya and Tanzania. SimGas manufactures, sells and installs domestic off-the-shelf biogas digester systems for rural farming households. Fed with water and manure from livestock, the digester produces both biogas for daily cooking, and fertilizer slurry which can be used to improve crop yields. A full GesiShamba package includes the digester, stove and other accessories as well as installation, piping, end-user training, 5 year service agreement and a warranty.
The benefits of SimGas digesters are reduced energy expenditures, increased farm revenues from improved yields and shift to clean energy from fossil fuels that cause health hazards, CO2 emissions and deforestation. The tailor-made financial solutions are based on an upfront payment combined with set monthly payments for a specified duration. Another innovation in the business model is the carbon credit programme, which enables customers to get a 200 USD discount through SimGas’ carbon credit sales.
SimGas’ growth has been supported by EEP S&EA at two different stages of project development. To date SimGas has sold more than 1,000 biogas systems and the expansion plans include establishing new SimGas hubs in Rwanda, Ethiopia and Uganda.
With its innovative biomass cookstove technology, BioLite can address multiple energy needs (ie. cooking, charging, lighting) simultaneously and cost-effectively. The breakthrough technology is in the thermoelectric design that captures waste heat from the fire and converts it into usable electricity to power and internal fan. Surplus electricity from cooking sessions is sent to a USB port for charging mobile phones or LED lights. HomeStove is a device which attracts customers in rural as well as urban areas by serving a variety of needs in households.
After the demo phase in Uganda BioLite wanted to scale up its sales and established a fruitful partnership with a Ugandan telecommunications company Telecom. The robust network of shops, built-in infrastructure and visibility of the BioLite brand alongside to Telecom’s other modern technology products has greatly benefited both parties. With the help and support of the EEP S&EA BioLite has successfully established several core partnerships in both Uganda and Kenya. By embedding BioLite’s own field staff into these channels to provide product demonstrations, customer training, and after-sales service, BioLite has been able to strengthen both sales and partner satisfaction.
One of the Lean Solutions Energy Group (Lean) highlights is the successful Boiler/Furnace Conversion programme. The programme aims at 25% savings in energy costs by offering two solutions, conversion of existing fossil fuel boilers or furnaces to Lean Briqs fed boilers and furnaces or alternatively, for very old boilers, installation of a new lean fired boiler set. The eco-friendly Lean Briqs are non-carbonized briquettes produced from charcoal dust and agricultural waste including sugar cane remains, saw dust and coffee husks.
The innovative business model Lean has developed for the boilers is based on four steps: Build, Own, Operate and Transfer – the BOOT model. The unique solution of the BOOT model is that Lean takes the full responsibility of the investment and the boiler that is located at the facilities of the client. Lean owns the boiler and is in-charge of building and operating the boiler.
The BOOT model is highly replicable and the boiler conversions can be efficiently implemented. In addition to positive results through employment opportunities and reductions in use of petroleum-based fuels, the EEP funding is expected to achieve a catalysing effect that will enable up to 30 boiler conversion projects within the next three years.
Nuru Energy (“Nuru”) provides Rwanda’s rural households with access to sustainable, off-grid energy solutions. Nuru’s business model provides not only access to affordable energy, but also a platform to develop rural entrepreneurship. The new, environmentally safe product offering involves four key components: LED task lights, 60W solar panel, POWERCycle pedal generator and the Octopus Charger.
The Nuru business model is successful because it considers the local conditions and needs for an off-grid solution specifically tailored for households living below the poverty line. By studying the characteristics of kerosene or flashlights for light consumption and leveraging off the examples from telecoms and collaborative consumption businesses, Nuru can offer affordable LED lights to lowest income consumers and opportunities for village-level entrepreneurs to grow their own business whilst Nuru can generate revenue through the energy credit system.
Nuru has by today successfully set up over 700 village-level entrepreneurs with an off-grid recharging platform, that serves over 800 villages, and has distributed close to 100,000 LED lights.
Inyenyeri is a for-profit renewable energy company, whose mission is to break the cycle of energy poverty, through the provision of a fuel and Fan Gasifying Cook Stove solution, which can be sustainably scaled to serve more than 2 million Rwandan households.
The Innovative Business Model by Inyenyeri is closely followed by other pellet producers in Southern and East Africa. As many pellet producers are struggling with the demand side of the business the Inyenyeri Business Model could be the solution that creates the demand. If Inyenyeri succeeds in growing their business according to their plans to provide for over 25,000 households by early 2018 and returning strong profits, this could turn out to be an ground-breaking model for the pellet market.
REDAVIA’s pre-configured, containerized solar mini-grids demonstrate the essence of an Innovative Business Model. The unique element in the business model is that REDAVIA rents the mini-grid and delivers 360° service including engineering, manufacturing, assembling, testing, deployment, maintenance and redeployment. The high-quality solar farm can be set up on average in four days and the communities and other customers save the high upfront investment required for a “traditional” mini-grid solution.
The Innovative Business Model illustrates the benefits of REDAVIA’s innovative system in two Tanzanian villages. The results of the system and provided electricity have been very tangible for the local communities and businesses including schools, hospitals and farmers. From a financial perspective, the rental model gives the villages significant flexibility to scale their solar energy capacity. By simply adding new containers of solar panels when the demand for electricity increases is a solution that enables faster uptake of the system. REDAVIA poised to roll out enhanced solar technology with more intuitive features and begin scaling its mini-grid operation in Tanzania and other parts of East and West Africa.