Iliana Lykissa, thesis, Uganda

Socio-technical evaluation of solar home systems

Ιn Uganda, 33 million people have no access to electricity. Several technical solutions have been identified that could contribute to the electrification of the population in developing countries but business models are yet remaining a factor of uncertainty. The scope of this study is the analysis of solar home systems as a promising solution to rural electrification. A multi-perspective analysis obtained through a 3-month field work study with SolarNow, a local company that has managed to sell more than 4000 solar home systems in the country, is presented in this report. A variety of methodological tools have been used to analyse the technical components installed by the company, its distribution model, the socio-economic impact of the solution and the appliances that customers are interested to use in the future. Technical evaluation of the performance of the components, structured interviews with 83 customers dispersed in the country, along with observations and open discussions with the stakeholders involved led to conclusions and recommendations for the company and other actors in the field of energy access.

Solar home systems consist of a photovoltaic panel, a maintenance free battery, a charge controller and various appliances as its main components. The smaller system that the company sells has a capacity of 50Wp and costs around $500 which is close to the average annual GDP per capita in Uganda. While system affordability is generally the main barrier for the adoption of the technology by the rural population, the company is selling its products on credit scheme and has developed its own logistics network. Distribution is done through a micro-franchise model. In the literature the model has been praised to achieve fast scale-up but examining the case of SN, it is actually observed that frauds often cause major financial losses that hinder scale-up. Moreover, it was noticed that although franchises are responsible for a range of activities varying from marketing and installation to financial assessments, they lack basic managerial and organisational skills. As a result they tend to neglect activities related to after-sale services especially after the end of the repayment schedule of the customer.

In addition to these, results show that 66% of the clients that took part in the survey had experienced a service issue. Poor quality lamps are responsible for the majority of the service issues. Technical measurements on the battery, which was the second most common service issue, has shown that brand (2) batteries is more technically robust than the newer brand (1) that shows indications of faster performance degradation. Similar are the results for the different charge controller manufacturers, newly adopted brand (1) doesn’t comply with the relevant technical standards. Solar panels, which are the most robust component of the system, were also examined on their performance. Limited sample numbers do not permit generalisations but indications show that the performance of brand A panels is very good in comparison to the manufacturer’s specifications. Comparisons with other brands on the degradation of the output showed that brand C is probably the most robust one. Additional measurements, showed that dust accumulation can cause up to 30% output loss. Four months was found to be the ideal time interval for cleaning the surface of the panel. The connections from an installer’s perspective were found to lack earthing and from a user’s perspective, cases of interference with the system configuration were common.

In general, usage pattern is fundamental for the lifetime of the battery, the minimization of service issues related to components with electronic parts and to panel output. User training can change drastically the usage pattern.

SolarNow impacts its clients by providing high quality lighting for a few hours per day and security with the possibility to have a light switched on during the whole night. Even the smaller of its systems provides enough energy to charge the household’s phones. Entertainment through a TV is a reality for one third of its clients while improved indoor quality is a highly appreciated. On the other hand, common statements in the literature, such as extended study hours and income generating activities were rarely witnessed.

However, 35% of the clients of the company are small businesses, whose economic growth after the purchase of the solar system is undeniable. Around one quarter of the sample of this study had initiated a new business venture, two out of five added an additional service in their existing business and the rest possibly showed unquantifiable indirect effects. The first group was found to have an average gross income of $300 per month and the second an income of $185 per month mainly through mobile charging. The vast majority of the 11 schools that took part in this study showed a clear increase of students and gross revenues after the installation of the SHS.

Concerning the future product development clients showed little interest on how the components of the system actually look. Household customers revealed their interest in buying a TV, a radio and a fridge while products like a water pump and a water filter are also intriguing for them. Similarly, commercial beneficiaries are interested in a TV, computers and a fridge and would also like a sign post and a water pump.

Mobile money is one of the most significant innovations in the area of East- Africa. Its integration in the payment strategy of the company could be beneficial for its model but its adoption seems to be impaired by the belief of the customers that payment of large amounts through the service is not trustful and the payment process for SolarNow is rather complicated.

Concluding, it seems that the business model of the company is a bright example for the start-ups in the field since it manages to tackle several challenges. Nonetheless, the model is yet to be proven and local cultural characteristics seem to delay that. Technically, it has been concluded that although the quality of the systems of the company is far beyond average in Uganda, there is room for improvement regarding service handling, technical component specifications, installations, user training and battery disposal handling. The fact that the company sells its systems to several businesses is increasing the population impacted tremendously and is proving that this is the only way for these systems to contribute to income generating activities. A constant improvement of the products provided will increase customer satisfaction that why new appliances and telecommunications innovations are incorporated in the company’s strategy.

In general, solar home systems seem to be a simple and robust technology that is embraced by its users. Apart from the quality of its components, the usage pattern is of extreme importance for their lifetime. The impact that the technology can have on the lives of residents and entrepreneurs of the rural areas is critical. However, several issues related to the identification of scalable business models remains to be proved. New companies in the field and international organisations can contribute significantly in the dissemination of this technology in various ways.