A start-up aims to bring cheap electricity to the 580 million people across sub-Saharan Africa with no access to the grid.
Solomon Faraji considers himself lucky. The Tanzanian entrepreneur was born in a house with electricity, he says, a rarity in a country where just 10% of its 43 million inhabitants can make the same claim. And it is the same story across other parts of sub Saharan Africa, where an estimated 580 million people lack access to electricity.
That can mean that homes are lit by dangerous, environmentally-damaging kerosene lamps. And people can be forced to walk miles to a place where they can, for example, pay someone to recharge their mobile phones.
To add insult to injury, consider this: many of those without power live quite close, perhaps even directly underneath, the very power lines that could light their homes. In Tanzania, for example, 80% of the population lives within three miles (5km) of a transmission line. But for most, getting a home wired and then paying steep monthly electricity bills make connecting to the grid simply too expensive.
“When I went to visit family in the rural areas, they were completely in the dark," says Faraji.
He went on to study engineering at the University of Wales. But now he's back in Tanzania as Chief Operating Officer of a company called EGG-energy, which has been working on a unique solution designed to bridge that "last-mile" gap between the country's electricity grid and individual homes and businesses.
EGG-energy offers a low-cost subscription service to small, rechargeable batteries that can be used to light homes and charge small electronics. Think of it as a kind of "Netflix for batteries," minus the postal service.
"We want to move power in an inexpensive way from the grid and into homes and businesses," says Jamie Yang, EGG-energy's co-founder and CEO. Yang developed the idea while finishing a PhD at MIT. He worked with other students from the university and Harvard to put together a business plan, and in 2009 they decided to test the system in Tanzania, where one of the group had contacts and where there is obvious need.
Here is how it works. For around $80, EGG-energy comes in and wires a home for power. They install a security light outside, and two lights inside; one goes in the common room, and the other in a bedroom. The whole process, the company says, takes about one and half hours to complete. And if $80 seems steep for the installation, consider that it can cost between $400 and $800 to get connected to the grid in Tanzania.
Then, once the home is wired, the occupants can buy a subscription to a rechargeable battery, which is then connected to the home system. The battery is nothing fancy – it is an off-the-shelf sealed lead-acid battery, with chemistry similar to those used in cars. This version, though, is a bit lighter and more rugged.
"It can be transported over the roads here reliably," says Yang.
"And it only weighs four to five kilos," adds Solomon Faraji. "People put it on their bikes or carry it on their heads."
Typically the battery's charge lasts between three and 10 days, depending on usage. Then, the battery can be returned to one of EGG-energy's charging and distribution stations, and be swapped out for a fully charged one. "The whole process takes three minutes," says Faraji. "They come, we confirm their subscription, and then they have a charged battery and they are on their way again."
The cost of a yearly subscription is around $60, which is a far cry from the amount people pay to be connected to the grid. "Most of the customers pay in cash," says Faraji. "But we also accept payment via mobile banking solutions like M-Pesa and Tigo Pesa."
And because it is a subscription model, EGG-energy, not the customer, can keep track of when the batteries need to be removed from circulation. The batteries, which are designed to last around two years (150 cycles of charging and draining), could end up being a source of pollution.
"We don't want used batteries ending up in a ditch, or being burned. They have lead in them," Yang says. He notes that the company is working to ensure proper battery disposal and recycling procedures are followed.
EGG-energy currently has three charging stations on the outskirts of the Tanzanian capital Dar es Salaam. Two of them are connected to the electricity grid at the very end of the transmission lines. The third is solar-powered, and actually sits more than 30 miles from where the electricity stops.
To date, the company has wired up more than 500 homes, and sold more than 1200 subscriptions. Some of those have been to budding entrepreneurs, who buy a subscription and then begin a small business selling that power on to people who need their mobile phones charged.
The company is now working to build a network of distributors for their batteries. Ironically they are trying to tap not the same network that already distributes competing products; things like kerosene lamps, solar lamps and regular car batteries. Why not form partnerships with these distributors to deliver batteries as well, their thinking goes.
EGG-energy is hoping people will realize that their batteries are safer, and ultimately cheaper, than the alternatives. In the next year or two, the company says it will continue to build more charging stations and refine their operations. CEO Jamie Yang admits that things are moving more slowly than the company would like, but he remains convinced that if EGG-energy can create more demand for affordable and reliable in-home electricity, it could have a major effect on the entire electricity distribution chain.
"Without a reliable way to move power into homes, there's very little market for things like solar, wind and hydro," Yang tells me. "If we can move power inexpensively into homes and businesses, we can actually create a market for distributed energy generation."
"And there's no reason," he adds, "why this couldn't be a model for most of sub-Saharan Africa, not to mention parts of south and southeast Asia as well."