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Posted on July 20, 2016

Solar stories: Diaries respondents’ experiences with off-grid solar

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Isabella and her husband are serious farmers in rural Makueni and among the better-off families in the area.  They grow maize, vegetables, and bananas commercially and are doing well enough to send their older children to boarding school.  When Isabella received her unusually-large merry-go-round payout of KSh 50,000, she decided to take on a few home improvement projects, including the purchase of a solar panel, battery, inverter, and wiring throughout her house.  The project cost her KSh 37,000.  She would have preferred a grid connection, but there is no transformer near her home, and there’s no telling when it will get close enough for her to connect.  Isabella is very happy with her investment. She loves that her solar unit lights the whole house, that the children now can read at night with “clean light,” and that she can watch the evening news.  She hasn’t bought paraffin since the solar was installed, a savings she estimates at about KSh 600 per month.  Sure, it will be five years before she’s technically saving money, but, she believes the value from the solar was worth the expense. 

Betty also says her investment in solar has been worth it.  She bought an M-KOPA unit for a deposit of KSh 3,500 and KSh 50/day, a total of KSh 21,750 over the course of a year.  When we speak to her in June 2016, she has only KSh 1400 left on the unit she bought to power the shop/canteen she runs in a rural area outside of Eldoret.  She now can work longer hours and charge customers’ phones.  They now stay longer and spend more money.  She says that with children in school, she’d never be able to come up with a lump sum to connect to electricity.  M-KOPA is just what she needed.  Relative to her Diaries level income of just around KSh 3000/month, even M-KOPA was a huge expense.  But for her, it was one that paid off. 

When we started the Kenya Financial Diaries in 2012, 68% of our respondent households were using paraffin as their main source of lighting.  Twenty-six percent relied on electricity and only 3% on solar sources.  Lacking an electricity connection or strong solar power was a pain.  Paraffin lamps put out a lot of smoke and unpleasant smell, giving children headaches when doing their homework at night. Lamps had to be moved around the house to the places where needed.  Mobile phones had to be charged at friends’ homes and businesses, making smartphones feel especially impractical.  Television was out of the question.  

Fast forward to 2016, when we revisited our Diaries respondents, and we find that 25 households had connected to the electricity grid (mostly through a new subsidized connection scheme implemented by the government and the World Bank), and 15 had acquired solar.  Two of these households bought M-KOPA units, paying off their solar investment over time, the rest buying their units outright.  These solar connections were not cheap.  Diaries households were spending 4-6% of their consumption (about KSh 250-500) on all energy sources during the course of the Diaries.  They would need to make bigger investments—and get together a substantial lump sum—to buy equipment and, in at least two cases, wire their homes for electricity.  Today they run solar power through these wires, but they still hope—like most—to one day connect to the grid. 

Until then solar is bridging the gap, sometimes exceptionally well, like it has for Isabella and Betty. 

But, for others, it hasn’t been as beneficial.  Loretta and Howard stopped paying on their M-KOPA unit once they were able to connect to the grid. They’re not sure what will happen because they’ve stopped paying.  For now, the unit just sits idle in the house. They say they might finish paying it off so that they have a backup during blackouts.  Jacinta spent KSh 30,000 on a large solar system and wiring and wishes she could take it back now that the cost of connecting to the grid in her area has fallen to KSh 15,000.  Once connected to the grid, families can get the power they need for just KSh 300 per month in pre-paid tokens[1]

A grid connection is still unrealistic for Faith, but she learned the hard way that a small solar investment would only deliver small benefits.  Her investment of Ksh 13,500 gave her a system that only partially lights the house and doesn’t give any outside light, which was something she really hoped for.  She says on cloudy days, the light doesn’t last long.  She just goes to bed early.  She wishes she had waited, too, not for the grid, but for a solar unit that would have been closer to an equivalent in terms of the power it could provide. 

Many of those who have installed solar in their homes are clearly happy with what they’ve got.  But, so far, none are saving money.  The thing is, paraffin is cheap.  But low income families also know that when it comes to reliable, clean, strong power, cheap is expensive.

 

Betty

Isabella

Loretta & Howard

Jacinta

Faith

Solar solution

M-KOPA

Bought solar panel, battery, and inverter

M-KOPA

 

 

Bought solar system outright, including wiring

Small solar panel, battery, inverter (total cost KSh 13,500)

Investment

KSH 21,750

(KSh 3,500 deposit + KSh 50/day for one year)

Total cost of

KSh 37,000

KSH 21,750

(KSh 3,500 deposit + KSh 50/day for one year)

Total cost of

KSh 30,000

Total cost of

KSh 13,500

How financed

Used ASCA payout to pay deposit and business revenues to pay ongoing fees

Received a ROSCA payout of KSh 50,000

Split the deposit cost three ways between herself, her husband, and her daughter

Used funds from payout from husband’s company after his death

Used funds left after fundraising for son’s hospital bill after his death

Experience

Thrilled

Happy

Neutral

Regret

Regret

Why

Has boosted business, allowing her to stay open longer and charge customer phones; has only KSh 1400 remaining on her M-KOPA loan.

Has eliminated paraffin use

Was helpful, but no longer needed, since they have a connection to the electricity grid; they stopped paying against M-KOPA.

Wishes she waited for grid connection now that price has dropped

Wishes she waited to save enough to buy a unit that was big enough to suit her needs; light doesn’t last long or cover all of house.

Cost Saving

Stopped buying paraffin for shop, which used to be KSh 70/mo

Used to spend KSh 600/mo on paraffin, now completely eliminated. Never paid to charge phones, but now can charge at home.

Used to spend 600/mo on paraffin and 300/mo on battery charging. Now spend KSh 300/mo on electricity

Stopped buying paraffin completely (about KSh 385/mo in increments of KSh 40), but now must take battery for charging every two months

Reduced spending on paraffin from KSh 100 to KSh 60 per month

Previous monthly expenditure on energy

KSh 150

KSh 1150

KSh 116

KSh 385

KSh 363

Average monthly income in the Diaries

KSh 2,976

KSh 24,937

KSh 9,871

KSh 5976

KSh 4,155

Average monthly income in Update

KSh 14,233

KSh 23,333

KSh 16,579

KSh 22508

KSh 5,791

Main Source of Income, Update

Self-employment: Shop/canteen at police post

Agriculture:

Maize, vegetables, and bananas

Self-employment:

Shop selling electrical and solar equipment

Pension/Death Benefit:

Received KSh 450,000 when husband passed away

Agriculture:

Selling milk

[1] As of June 2015, 36% of Kenya Power customers were connected via pre-paid meters, according to the KPLC Annual Report.

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