Posts Tagged ‘renewable energy’

Introduction to rural household energy consumption behaviour in East Africa (1 of 3 parts)

The following is extracted from a six month study during 2012 on household energy consumption behaviour in rural Kenya and Rwanda among the lower income demographic, that led to an understanding of some of barriers hampering the sales of client’s solar products in this market. This first part is an overview of household financial management in conditions irregular and unpredictable income streams from a variety of sources. The 2nd and 3rd part will focus on fuel usage and consumption behaviours for cooking and for lighting separately. Users sampled for this study were selected based on varying fuel consumption patterns, ranging from a single homestead to a rural hotel catering for more than 12 hours a day.

Aspirational ownership and tangible evidence of savings in prepaid purchase model of solar panel, as seen in Chuka, Kenya (Photo: Niti Bhan, February 2012)

Rural Kenyans are not very different from rural Filipinos or Malawians or Indians when it comes to the way they manage their daily household expenses. Similarities in decision making, in purchasing patterns and in observed consumer behaviour, all stem from the same underlying need to plan and manage on irregular incomes from a variety of multiple sources in harsh environments of scarcity and uncertainty. The underlying driver is always to stretch the limited shilling, rupee or peso to the maximum while keeping one’s head above water.

With the exception of the salaried schoolteacher, who managed on fixed amounts of cash paid predictably on a calender schedule, the rest juggled an irregular cash flow against required expenses, attempting to minimize the differences over calender time and as a planning mechanism across the natural year’s seasons of abundance and scarcity. Even cash croppers like Mama Grace, who received end month payments from the tea factory, coped with the significant difference in the quality and quantity of tea harvested during the wet and the dry seasons with a variance of as much as 300% between high and low payments.

Rural homesteads manage their household finances rather like a “portfolio of investments” that mature over varying times such as cow’s milk which can be sold daily for cash, while a chicken takes less time than a field of maize to be ready for harvest and sale. Thus decisions are made based on timing of the expense and the choice of ‘investment’ to liquidate on what was ‘ready’ as well as the amount of cash required. For example, in Kilala livestock market it is a known fact that livestock prices always drop in January as its time for first term school fees and everybody needs to sell to raise the necessary cash. Similarly, major purchases or cash outlays are planned for known times of abundance such as right after the seasonal harvest.

Unlike those on a fixed salary who are able to plan ahead, those on irregular incomes need greater control and flexibility over the timing – that is the frequency and the periodicity; and well the amount – in cash or kind; of their cash flow, as a planning mechanism for financial management. In fact, the greater the span of control the customer has over their time and money, as articulated above, the greater the success of a business model or payment plan. This is why prepaid airtime is the preferred model for 96% of the African continent’s 700 million mobile phone users and also why kerosene has been so hard to dislodge. It can be purchased by cash amount (say 40 Kes worth) or quantity (half a litre or 5 litres) on demand or in bulk, and then frugally used for as long as possible, allowing consumers control over their “time” and “money” with great flexibility.

Observations on household fuel and energy use reflect these purchasing patterns and consumer behaviour. Cooking and then lighting are the most important needs, and the two elements of time and money as discussed above, show up in the form of duration and location. While duration of use has a direct relationship to the amount of time and money required, location has a critical bearing on behaviour in rural Kenya as will be seen in forthcoming posts.


Part One: Introduction to Household Energy Consumption Behaviour Study in East Africa (2012)
Part Two: Cooking
Part Three: Lighting & Concluding Remarks

Where are the appliances designed to be used with renewable energy sources?

LPG powered fridge for sale in Eastern Cape, South Africa

Almost 2 years ago in early 2010 I wrote about the opportunities for disruptive innovation in the emerging markets of the then developing world. One of the 5 case studies was that of the following concept:

Re-imagined household appliances
Refrigerators have come to the forefront of the news with the launch of Godrej’s Chotu Kool—a top loading unit co-created with their target audience in rural India, it does not require electricity and has one tenth the number of parts required in a conventional fridge. The refrigerator weighs only 7.8 kg, runs on a cooling chip and a fan similar to those used to cool computers. Chotukool consumes half the power consumed by regular refrigerators and uses high-end insulation to stay cool for hours without power while costing only Rs 3250 (USD 69). It is being distributed and marketed through partnerships with micro-finance institutions.

As this clay based precursor, the Rs 3000 (USD 55) Mitti Cool demonstrates, there have been a plethora of alternative solutions to the needs defined by basic household appliances. In the searing heat of the Indian summer, illnesses can be prevented by keeping milk and cooked food too cool to spoil. What Godrej has done however is taken the basic concept of low cost solutions and applied it to a mass market consumer good, to be marketed, branded and sold just like any other home appliance. Less moving parts imply ease of repair and maintenance, lower cost of ownership and possibilities for eco-innovations, a trend that could permeate the way appliances are currently designed and built for more profitable markets.

Where are these products now in the market and more importantly, where are other such home appliances?

Granted, the original concept was that of extreme affordability and these products were targetting the (still mythical) volumes in the BoP market – although in Godrej’s case it was simply common sense given the proportion of the Indian population who either lives off the grid or cannot afford the paraphernalia required for back up electric power when the inadequate systems cannot keep up with the demand.

Today however I was forcibly reminded of this product development direction when I came across the results of a significant study by Prof Arne Jacobsen of Humboldt State University that looked at rural Kenyan adoption of household solar power and the demand drivers that created this unsubsidized market. While there is much that is of interest in his dissertation, particularly the focus on the ‘connectivity’ aspects of rural demand, it was this observation that made me think about the untapped potential demand for a range of home appliances designed to suit the constraints of the majority of renewable home energy systems :

The average solar module size for a household system in Kenya is approximately 25 W, and the most common size is 14 W. Televisions, radios, and lights are the three main electrical appliances used with solar PV systems, while cellular telephone charging is a rapidly emerging use. Many appliances that are often used around the world in grid-connected homes, such as refrigerators, electric irons, and electric cookers, are generally not used with solar PV in Kenya. This is true because these appliances consume far more energy than the small solar modules that most Kenyan users can afford are able to produce. In other words, the quantity of electrical energy supplied by the solar PV systems used in Kenya is very small compared to the quantities that are generally available to grid-connected households, and this limits the range of possible uses.~ Jacobson, Arne (2007) “Connective Power: Solar Electrification and Social Change in Kenya,” World Development, v35, n1, pp. 148

While one can argue that this data is not only a decade old but focuses only on rural Kenya, I’d say that the basic insight would apply nonetheless wherever there is increasing uptake of modern energy sources among rural and/or lower income households. When one adds the potential number of households globally where utility companies are deploying prepaid electricity meters – The Philippines, many Sub Sahara African nations and of course the pioneer, South Africa – there seems to be implications for greater demand for products that would not only consume far less power than even the EU’s greening laws require but also track energy consumption in units of cash or energy simultaneously.

Current day EUP requirements are still designed with ubiquitous legacy infrastructure of the electric grid, not a wholly different system for sourcing, installation and purchase. In fact, I also wonder whether the fact that most of these household solar PV systems are slowly added over time in modular chunks (reflecting purchasing patterns of those on irregular or seasonal income streams) may not also play a part in influencing future product design?

There is a market opportunity here for manufacturers of consumer durables seeking to grow entirely new markets in the frontier regions of the global economy.