Barefoot Power Ltd / Affordable solar products for the poor

Background

Nearly 600 million people in Africa, about 60% of the continent’s population, lack access to electricity and the number is growing. The rural poor account for 88% of those without electricity. They spend a significant proportion of household income – an estimated US$10 billion per year – on fuel-based lighting, mainly kerosene lamps. These are low quality, expensive, hazardous, and pollute the environment.

Barefoot Power manufactures and distributes affordable solar-powered products for individuals and communities who have limited or no access to mains electricity. By offering a range of products, from single desk lights up to solar kits with seven lights, phone and radio-charging, Barefoot Power gives customers options to replace kerosene and improve livelihoods.

The organisation

Established in 2005, Barefoot Power Ltd is a social for-profit enterprise that designs, manufactures, and distributes solar lighting and charging solutions.

The Barefoot Power head office is in Australia and the leadership team is located in key markets across the globe, currently with a focus on Africa. Distribution is undertaken by a network of in-country distributors and global sales importers in 20 countries. In-country distributors, wholly or partly owned by Barefoot Power, are currently operating in Uganda, Kenya and Rwanda, and more are planned. In 2011, Barefoot Power and its subsidiaries had over 100 full-time employees. Income in 2010/11 was over US$4 million.

The programme

In-country distributers and global importers order products directly from the manufacturer, and build a sales network within their country of operation. This includes existing retailers, entrepreneurs, micro-finance-institutions (MFIs), NGOs, and corporate partnership programmes (including the telecommunication company Simba in Uganda and Unilever tea farms in Kenya). The in-country distributor prices products appropriately so that the dealers, entrepreneurs and corporations can make a margin to cover their operating expenses.

I give presentations in communities and speak to SACCOS (savings-andcredit groups). Sales go up and down: it’s best at harvest time when people have money.

Ronald Kabiswa, Barefoot Power solar entrepreneur

Barefoot Power trains entrepreneurs to build up their own solar business, and become a ‘micro-franchise’. The ‘business in a bag’ programme includes a three to four day training, supplier credit, sample products, marketing materials and an individual business plan, along with after-training business support. To encourage ownership and sustainability, Barefoot Power charges for the programme (an initial investment of about $50) a practice which has proven to be successful in retaining entrepreneurs.

Barefoot Power provides business support services to assist importers include logistics and customs support, marketing consultancy, importer sales and technical training and post sales service.

The technology

How does it work?

Barefoot Power systems use a 1W to 15W photovoltaic (PV) module to generate electricity from sunlight, and a rechargeable battery to store electricity. All other components (LED lights, phone leads, switches and connectors) are included in the pack so that it is simple to assemble and install.

In the ‘Firefly’ range of desk-lamps, the battery is incorporated into the stand of the lamp, and the PV module can be unplugged when it is not charging. This portability enables the lamp to be used in different rooms of the house either as a task light or a room light, or it can be used as a torch outdoors. Current models use PV modules with 1.0 or 1.5 W power output and can provide light for between 4 and 20 hours depending on the setting.

The larger ‘PowaPack’ kits have a PV module with between 2.5 and 15W power output, a single battery and between two and seven bright LED lights, in both matrix and tube-light formats. All PowaPacks and the higher power Fireflies have connectors for mobile phone charging.

PowaPack kits are designed for self-installation, but dealers and entrepreneurs offer installation services to assist customers. Popular services are having the PV modules mounted permanently on the roof, and having PowaPack kits wired up and installed.

How much does it cost and how do users pay?

US$1 = UGX2,490 (Uganda Shilling) [March 2012]

Not many of my customers can pay with cash. Most of them get microfinance from FINCA, or else buy through their saving-and-credit group.

Christine, owner of NACO Solar, Masaka, Uganda

In Uganda, the most popular Firefly Mobile lamp retails for about US$28 (UGX70,000). The most popular PowaPack 5W is a 4-light system which retails for US$137 (UGX341,000).

Barefoot Power does not offer credit to end users, but it recognises that many need finance in order to afford the initial cost of a solar product. In Uganda, Barefoot Power works with the MFI FINCA and several savings and credit organisations (SACCOs) to make small energy loans accessible. In the case of FINCA, loan officers are able to offer special loans to members of their credit circles in order to buy the systems. A typical loan to buy a PowaPack 5W would be for US$160 (UGX400,000), charged at 3.5% per month and paid back over six to twelve months.

How is it manufactured, operated and maintained?

The solar lighting and charging kits are designed in Australia and manufactured in China through partnerships with manufacturers of LED lights and PV modules, and with assembly factories. Barefoot Power has a quality control manager working directly with the factories to communicate production specifications and monitor production line and post production quality.

Barefoot Power focuses its marketing on sales support for in-country distributors and global sales importers. Global marketing includes trade shows, product catalogues and launch packages, web site updates, and social media. At local level, Barefoot Power consults with local partners and targets marketing and sales programmes to build awareness in the communities. This includes radio campaigns, market days, posters and local events.

In the case of any issues, the company offers a standard one-year warranty on all components, as well as after sales service. Previous models of products lasted up to three years. Current ‘Generation 2.5’ models have batteries developed for at least three years of use, and should last for up to five years depending on use. Batteries and lamps can be replaced.

Achievements

By the end of March 2012, Barefoot Power had sold nearly 350,000 solar lighting products to users. About 80% of these were Firefly desk lamps, and the rest were PowaPack kits. Over 1.7 million people have the benefits of good quality light and phone charging in homes, schools and clinics.

Environmental benefits

Kerosene use is substantially reduced by solar lighting products. A Barefoot Power field study of 100 households in Vanuatu found that 80% of households stopped using kerosene lighting entirely when they had a Firefly lamp, and the remaining 20% on average halved consumption.

My best seller is the PowaPak 5W system, I sell about 30 or 40 every month, and about 10 of the 2.5 W systems, and quite a lot of Fireflies too. Business is good: I’ve just opened a second branch in the East of Uganda.

Christine, owner of NACO Solar, Masaka, Uganda

By replacing kerosene and candles, Barefoot Power products also cut greenhouse gas emissions. Barefoot has a carbon finance project currently under validation with the UNFCCC-CDM, which assumes a standard saving of 0.08 tonnes/year CO₂ e saving per solar lighting point provided. On this basis, Barefoot Power products currently in use are saving about 38,000 tonnes/year CO₂ e.

Barefoot Power has instituted recycling incentive programmes in country so that batteries are returned and can be disposed of properly. Replacement batteries are available through importers or service stations.

Social and economic benefits

Barefoot Power solar products improve health and education, free up time for work and leisure and cut household spending.

Switching from kerosene or candles to solar lighting reduces the incidence of chronic illness due to indoor air pollution, and also the risk of burning. Children can study more easily at home with good-quality light, teachers can prepare lessons, and schools can also provide light for evening study.

Rural households in many developing economies spend typically US$1 to US$2 per week on kerosene and phone charging. This becomes available for other household needs once the cost of a solar system is paid off – and for the Firefly lamp with phone charger this will take just three to six months. Based on 300,000 lighting kits shipped by October 2011, Barefoot Power estimated that households had cumulatively saved more than US $15m which would otherwise have been spent on kerosene.

Employment

Barefoot Power and its subsidiaries employ over 100 people globally. Indirectly, they have also improved income for over 2,000 entrepreneurs and technicians, and increased the income of small retail businesses. The company has an ethos of building capacity at the local level and identifying unused skills among its staff: for example, one of their security guards has, through training, become a technician.