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Pay-as-you-go Electricity Lights Way in Millennium Villages

Because energy is crucial to many basic human activities, having access to electricity is a fundamental measure of human development. Without adequate access to electricity small businesses struggle to operate. Power for communication lines to the outside world like cell phones and the Internet is not readily available. There may be no reliable sources of light for schoolchildren to study by after darkness falls.

An estimated 1.3 billion people do not have access to electricity worldwide, and almost half of them are located in sub-Saharan Africa. Basic infrastructure — such as good roads and telecommunications networks — is sorely lacking in rural Africa, making the prospect of building electrical grids too costly for governments. And given the modest needs and inconsistent budgets of most rural customers, the undertaking isn't economically viable for the private sector either.

Unfortunately, because they are not connected to a traditional utility grid, poor, rural Africans pay on average higher prices than those connected to grids to meet their energy needs. Research conducted by the Millennium Villages project has shown that rural populations often pay more than $3 per kilowatt hour for kerosene, batteries, and other sources of energy — ten times the amount grid-connected consumers pay.

As part of the Millennium Villages project, in 2009 the Earth Institute's Modi Research Group took up the challenge of how to bring electricity to rural villages in Africa. After analyzing the data and sociological constraints, the team arrived at an innovative solution to the problem: solar-powered micro-grids with prepaid metering and semi-automated, remote management. They called it SharedSolar: pay-as-you-go electricity via mobile telephony.

Here's how a SharedSolar system works: a central, small-scale (1.4 kW generating capacity with 16.8 kWh battery storage) solar system is connected to up to 20 customers (homes, businesses, or small institutions such as schools) within a 100 meter radius via underground cables. End users buy prepaid scratch cards from local vendors according to their needs and budget. Each card contains a code which, when sent by text message to a payment server, credits a smart power meter located inside the premises. Electrical current is now available. The meter monitors usage until the customer's credit is exhausted, at which point the circuit is switched off until more funds are added.

“Having people pay when they can afford to and when they need [electricity] — without a flat monthly fee — matches the needs and spending patterns of the poor,” says SharedSolar's director Vijay Modi. “This was a very important lesson for the project.”

In addition to adapting to local conditions, SharedSolar's smart microgrids are designed to be sustainable. Automating payment eliminates the need for billing and collections, and managing usage in real time ensures cost recovery. Using standard SMS text messaging bypasses the need for communications infrastructure. And SharedSolar systems can be scaled up, adding additional generating capacity or even becoming part of a larger grid, should one become available.

After coming up with the blueprint, the SharedSolar team went to work creating the software to operate their system, using readily available components. In late 2010 a pilot system was assembled in Pelangala, Mali, to test the technology. The community's reaction was overwhelmingly positive, and the Modi group was quickly called upon to build more installations. There are now nine SharedSolar sytems in Mali, which provide electricity to 172 households — over 2,400 people in all. Another 160 households are set to be connected to SharedSolar systems in Mali over the first half of this year, and new programs are currently being developed in Uganda, Kenya, Tanzania and Haiti.

In the future the SharedSolar team hopes to join with governments and other stakeholders to expand the technology and create a more robust business model. For instance, forming relationships with suppliers and manufacturers coud help reduce the total cost of deploying a system — currently about $1,570. Partnering with a telecommunications provider could lower messaging costs and allow for toll-free numbers customers could call to credit their accounts. Instead of charging a fee per message, the telecom might receive a small percentage of all transaction fees.

As the SharedSolar project continues to expand in Africa, the Modi research team hopes to gain new data and insights to further refine the system. Perhaps some day their work creating smart, solar-based electrical grids in remote African villages may even help bring practical renewable energy solutions to the developed world.

“We have leapfrogged conventional tehnology in these settings and come up with a solution that the developed world is still trying to achieve,” said Modi.

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