Some of the poorest people in Kenya are now able to buy their own solar-powered home energy system thanks to subsidies provided through a government programme – The Energy and Cash Plus Initiative, also known as Mwangaza Mashinani, targeting the most vulnerable populations in Kenya. Not only are people who are least well off getting cleaner energy and experiencing a better quality of life, but in future they will get their electricity for free, once the equipment costs are paid off.
The Energy and Cash Plus Initiative is an innovative pilot project funded by the Swedish Development Agency (Sida) and commissioned by UNICEF to Energy 4 Impact. It involves the design and implementation of a scheme to subsidise home energy systems from two selected providers: D.Light and BioLite. Integrated into the government’s National Safety Net Programme (called Inua Jamii), which makes cash transfers to people such as orphans, people with disabilities and elderly people, the scheme covers the majority of the costs of a home system.
The solar home system can power three lights, a radio and charge cellphones – enough to light up a typical rural home and connect those living there to the outside world. Thanks to the Mwangaza Mashinani programme, more than 1,600 systems have already been deployed in two counties in Kenya – Kilifi and Garissa – benefitting some 8,000 of the poorest people there.
Access to electricity is one of the basic human rights along with food, water and shelter, and is a game-changer in tackling poverty and improving people’s quality of life, as per the UN’s Sustainable Development Goals (SDGs). However in many developing countries poor people do not have the means to benefit from accessible and sustainable energy solutions such as solar technologies due to the high up-front costs.
Though the price of solar technologies has been decreasing rapidly over the last few years and the market for solar home systems is booming in East Africa, even $135, the cost of the PayGo solar home equipment, is much too much for many people there. People are often left behind because their income is too low or because they live in remote rural areas not served by clean energy providers. Without access to clean energy, they have no choice but continue to rely on inefficient and harmful fuels such as kerosene and diesel. Though money spent on paraffin and kerosene may amount to more than it would cost to use an equivalent amount of solar electricity, not having the money to invest in a system in the first place means that poorer people do not have the chance to change and improve their lives.
Help with meeting the up-front costs of buying a PayGo solar energy system from one of the home system providers can therefore make a huge difference to people who would not be able to afford it on their own.
“Access to energy is a game changer in the fight against poverty, but real change will only happen if energy is affordable to everyone, including the lowest income households,” says Diana Kollanyi, Regional Head of Programmes, Energy 4 Impact.
Free electricity for the future
The scheme provides grants of up to 99% of the cost of the system (around $135), to make the home solar systems more affordable, while a small personal contribution to cover the remainder helps people feel a sense of ownership. The grant covers the up-front cost plus a monthly top-up payment towards on-going repayments, paid over 12 months. A big advantage is that once the full cost has been repaid the person or household then owns the equipment outright and thus has a source of free electricity for the future. The systems are guaranteed for at least two years.
Money is paid to beneficiaries into their bank accounts from which they withdraw and deposit the amount on their cell phones to pay the company to purchase the solar equipment. Such mobile phone money transfer services are very popular in East Africa and accessible to anyone who has a cheap mobile phone, so very convenient for those on low incomes. Those who don’t have a phone would normally use a family or community member to make payments to the solar supplier.
“We target the poorest households who already receive a small cash payment from the government (government benefits) each month to help them pay for their basic needs. These are mainly orphans, vulnerable children, people with severe disabilities and elderly people,” explains Diana Kollanyi.
“With the support from the Kenyan government as well as the Kilifi and Garissa county governments, we’re building on this social protection system with a small top-up payment, so that these households can afford to make regular payments to keep their PAYG solar home system going”.
“Our community mobilisation and education efforts were key to ensure the buy-in from the very communities we are trying to serve as we need to earn their trust before they can feel confident to jump on board”, says Diana.
Energy 4 Impact also works with private sector companies who supply solar home energy systems to ensure that systems are available even in remote areas. In fact, the demand for systems as a result of the scheme means that these areas are providing a more attractive market for private sector suppliers so it makes it easier for others living there who can afford to buy systems for themselves to find a supplier.
“Attracting private sector companies providing solar home systems was also a challenge, but once the market is facilitated they realise there is big potential in serving this slice of the population. In addition, solar suppliers are finding that, once they have entered an unserved area, they are able to sell more systems to households who are not part of the cash-transfer programme,” explained Energy 4 Impact’s Diana Kollanyi.
Home solar system helps mother see off snakes
One of the beneficiaries, Fatuma Karisa Dadu, is a widow from Kabelengani village in Kilifi, costal Kenya.
Keen to get access to energy she walked eight kilometres from her village to the nearest solar collection centre to register, make the payment, get some basic instruction, then pick up the solar unit and take it home.
One of the reasons she desperately wanted the system was because three times recently she had found snakes in her house at night and, with her kids sleeping nearby, was very worried. She was pinning her hopes on a solar home system to provide light to spot the snakes as a way to keep them safe.
After queuing for some time, when it was her turn near the end of the day, she discovered a problem with her M-Pesa (M for mobile and pesa, Swahili for currency) mobile phone-based money transfer service. This meant she could not pay to get her solar system to take home.
This mix-up upset Fatuma very deeply, not because of the time she had spent waiting, but because of her fear of snakes and worry for the safety of her children. In tears and very agitated, she was adamant that she could not go home without one.
Fortunately the Energy 4 Impact team were on hand and went into action, going the extra mile to get in touch with the right people to help Fatuma sort out her account to enable her to get her grant and pay for the system.
“The help we were giving her to buy the system was the help she needed to protect her family. The payment system itself is not our job, but it is typical of what happens when you get the right team, prepared to go the extra mile to sort out problems so we can deliver. We tried numerous times to fix her account and had to get in touch with a number of different people, but, in the end, we got it sorted,” says Elly Odhiambo, Business Mentor, Energy 4 Impact.
At 8.30 pm, Fatuma left, a satisfied customer with her solar system under her arm, and the safety of her loved ones a little bit more secure. With the home system’s capacity to power three lights, a radio and charge phones, Fatuma is already saving $0.4 per day on kerosene and phone charging costs and is even generating a small income, of about $0.60 per day, from charging phones for her neighbours.