Solar home systems (SHS) are deployed in a rapid pace for increasing access to electricity in rural areas of India. A high share of 64% of SHS break down once in their lifetime. As users cannot afford repair services, access to electricity is lost. With the social company AALO we offer a power insurance ensuring the once deployed SHS stay sustained. This is realized through cooperation with mobile phone carriers (MPC) and the development of additional revenue streams.
Lack of access to electricity is considered as one of the major bottlenecks for sustainable development in low income countries. On a global scale a population of 1.1 billion does not have access.
SHS are considered as the most feasible solution for achieving a rapid access and enabling the rural population to power at least basic electric appliances.
Focus countries are India, Bangladesh and East African countries. SHS are distributed through a variety of payment approaches e.g. the payas-you-go model (PAYG) where customers pay for real consumption.
However, the sustainability of SHS is questioned. A major problem is the frequent breakdown of SHS for various reasons. A recent study from the Indian state Odisha revealed that 64% of SHS defect once in their lifetime. Rural users are often not able to afford for repair services. Therefore they lose access to electricity once again.
Implementing a maintenance system through an insurance product holds a high potential for increasing the reliability of SHS.
Our solution is a power insurance ensuring sustained access to electricity and thereby to light, communication and information. In case of a not functioning SHS a repair service is provided to our users for no costs covered by our power insurance.
We are financing our insurance product through generating revenue streams from selling consumption patterns of our users to advertisement companies, allowing them to provide tailored advertisements.
Additionally by selling exhausted technological components to recycling facilities, we are able to subsidize the power insurance through those revenue streams.
Our SHS is given as a complimentary when a rural user purchases a SIM from our partnered carrier, thereby SHS are distributed quickly. Users pay for actual consumption through PAYG schemes topped with a profit margin.
Our SHS are equipped with communication devices enabling monitoring and tracking consumption patterns. In case of failure we are able to inform contracted services for (pre-emptive) repair or replacement.
M-kopa, Simpa, Mobisol and Onergy are few companies who are implementing the pay-as-you-go model and provide maintenance only until the user has not paid the entire money worth the product. Urja Samadhaan started to provide solely maintenance and could not sustain due to customers not being able to afford the maintenance.
The uniqueness of AALO is that we can subsidise the maintenance (and therefore insured power) by deserting to other revenue streams.
From interviews with the experts at UNLEASH, no company in the market has commercialised the collected data, forwarded to market analysts for tailored advertisements.
With our data, we also make sure that products which cannot be repaired, are sent to the right recycling facilities – which currently is not the case.
We will put a value on these materials, as we cover the logistics of this valuable waste stream.
No methods alike have been implemented before, simply because the problem has only been identified by having experience in the field and assessing where current pain points are.
The concept of sustained affordable maintenance has not yet been identified as the solution to access to energy.
AALO provides impact through access to electricity and even more important through sustaining this access. This is realized through our power insurance product. Electricity in turn improves the living conditions in many ways through providing lighting, communication, information and further.
An uncountable number of surveys and studies demonstrated evidence of the positive impact of electricity on living conditions. AALO‘s core SDG target is SDG 7. Through deploying and sustaining SHS, AALO is providing clean and affordable energy.
The impact can be measured through indicators 7.1.1.; 7.1.2; and 7.2.1.
Additionally AALO is contributing to achieving:
SDG 4 by providing access to light and information which facilitates educational activities;
SDG 8 by generating jobs through partnering with technicians and maintenance companies;
SDG 10 by equipping rural areas with electric services as in urban areas thereby reducing inequalities;
SDG 11 by increasing the share of renewable energies in rural communities.