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Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - PAWAME (CONDUCTING A FEASIBILITY STUDY ON THE VIABILITY OF AN INNOVATIVE BUSINESS MODEL FOR BRINGING SOLAR ENERGY TO REMOTE COMMUNITIES AND DEVELOPING COUNTRIES)

Teaser

Summary

1.1 billion people, most of whom live in developing regions of Asia and Africa, lack access to electricity. The primary light source for them are kerosene lamps, which are not only costly, but also has negative impact on human health, resulting in illness and even mortalities. Existing solar-powered products are too expensive for households with a $20 monthly income. Booming trends of mobile subscriptions and smartphone adoption in developing countries mean there is also a growing need to charge the phones. Currently mobile phone users in off-grid communities are forced to go to the nearest kiosks for phone charging, which is costly and time consuming.
Solet Technics, a Lithuanian SME, developed a solution that would leverage on the increasing mobile penetration rates in the world to provide electricity to low-income off-grid households. This solution is called GETASUN â€“ an innovative mobile solar power generator, which provides cheap and reliable access to electricity for households on a Pay As You Go (PAYG). PAYG model makes the solution affordable for low, irregular income households. GETASUN has a huge potential to affect the solar power market worldwide and encourage the transition from traditional kerosene lamps to an efficient and eco-friendly mobile solar power generator.
The main objective of the application for the SME Instrument Phase 1 was to develop a feasibility study for the successful commercialization of GETASUN solar power kit. In order to reach this goal, a set of sub-objectives has been developed, which are as follows: 1) to perform a bottom-up user and field research; 2) to perform a top-down market research; 3) to conduct a distributor analysis; 4) to develop an elaborate business model including a clear, measurable, realistic and achievable business plan.

Work performed

As it was mentioned above for a successful product commercialization the feasibility study was implemented. The feasibility study covers the topics such as bottom-up user and field research, top-down market research, distributor analysis, business model and business plan and its key outcomes are described below:

Top-down market research. Based on global overview, two potential markets namely African and Asian were selected and further analysed. It has been identified that the African market is currently highly saturated, since there has been great developments in building infrastructure and connecting off-grid communities to electricity, thus overall it currently has steadily rising electrification rates, which in effect shrinks potential market size for GETASUN, thus it was decided that this market should not be entered. The most electricity deprived region in the world is Asia, where as much as 800 million people have no access to electricity (Such as India - 267m people, Bangladesh - 41.47m people). This is why Solet Technics will re-focus to Asian market, particularly to India and Bangladesh. This is why a decision to rebrand the product was made. It will help to meet the user preferences in the Asian market and help build positive exposure.

Bottom-up user and field research. The semi-structured interviews were performed with 20 households in Bangladesh that currently are off-the-grid and mainly use kerosene lamps for lighting. These interviews showed that there is a demand for GETASUN, and all of the participants would be interested to buy the solution. However, the willingness to pay and the needed features of the solution varied among respondents. Since the average total costs for lighting and phone charging currently are $ 8, it is recommended to enter the market with the solution that provides lighting, phone charging option, and Wi-Fi for $ 10 per month.

Distributor Analysis. Relying on the booming telecommunication business in developing countries, the most efficient way to reach theses communities is to distribute GETASUN solar power kit by partnering with mobile telecommunication operators. The business model based on a partnership with a telecommunication company enables to exploit synergy and lower the costs. GETASUN identified that current telecom operators have very low ARPU (Average return per user), thus proposed partnership from GETASUN will provide new and stable revenue streams using their already existing distributor network, and thus highly likely to agree to collaborate.

Business Model & Business Plan development. In the course of the project GETASUN performed SWOT analysis, Industry background, market, and competitor analysis which led to a better understanding of the market nuances and gave the required sophisticated understanding and information on the target market needed for developing successful Commercialisation, Marketing, Operations, Sales, and Financial strategies. All this resulted in a strong business model using telcos as key partners in delivering the final product to the end-user, and an elaborated financial model with forecasted needs for further investment and strategies for attracting it.

Final results

Despite the fact that GETASUN solar power kit will change the dangerous lighting sources that are currently used in almost each off-grid households and provides mobile phone charging opportunity, it will also help to stimulate local businesses and entrepreneurs. Currently most of the community services, such as shops, are forced to be closed as soon as it gets dark. The ability to use GETASUN enable such services to prolong working hours and to generate more income which at the end have positive effect on purchasing power. Furthermore, the solution also provides the internet access, thus granting far better education opportunities that are currently present. Due to internet the households could access websites, resources and literature that could lead to better level of education and literacy. Better education opportunities for children could lead to better job opportunities and higher income in the future.