Pay-As-You-Go: How a Business Model Is Helping Light Millions of Rural Kenyan Homes with Solar

Abstract

The government of Kenya has been trying to expand the electricity grid for decades, with little success—80% of Kenyans are still living without access to the grid. An alternative solution, off-grid solar lighting products, such as solar lanterns and solar home systems, increasingly provide Kenyans with decentralized clean energy. Kenya’s private sector market for off-grid solar lighting products has been developing since the 1980s, yet the key to rapid market growth was the introduction of a pioneering pay-as-you-go business model in 2011 that made solar products affordable for poor rural customers. Today, with almost 30% of all off-grid households using some type of off-grid solar lighting products, Kenya is a market leader. Other factors that have encouraged market growth include the massive need for power in areas where grid electricity is not available, the high cost and unreliability of grid power where it is available, a value-added tax exemption on solar products, numerous education and awareness campaigns, and expensive kerosene. However, poor quality products present a major challenge. This challenge will have to be overcome for the market to reach its full potential and to ensure that these products represent an effective and lasting lighting solution.

Pay-as-you-go liquefied petroleum gas supports sustainable clean cooking in Kenyan informal urban settlement during COVID-19 lockdown

“…Although there is a surcharge to the fuel costs to cover equipment installation and delivery fees, PAYG LPG importantly allows consumers to purchase LPG credits in small increments (via mobile banking) [28] . Pay-as-you-go smart meter technology has already been used to provide resource-poor households in SSA with affordable access to technologies for electricity and water/sanitation [29] , [30] . From a social perspective, similarities of PAYG with the concept of paying for an energy service may help explain its success [29] .…”

A Systematic Literature Review of Indices for Energy Poverty Assessment: A Household Perspective

“…Different studies justify that renewable technologies can reduce energy costs in combination with traditional energy sources [85,86] or by replacing fuel-based technologies with renewable-based ones [4,5,87,88]. Additionally, renewable energy has a huge potential for the electrification of off-grid zones and in improving energy access and reducing energy poverty in developing countries [89][90][91]. However, the implementation of low-carbon technologies requires carefully considered political action.…”

Pay-as-you-go LPG supports sustainable clean cooking in Kenyan informal urban settlement, including during a period of COVID-19 lockdown

“…Pay-as-you-go smart meter technology has already been used to provide resource-poor households in SSA with affordable access to technologies for electricity and water/sanitation. [33][34][35] From a social perspective, similarities of PAYG with the concept of paying for an energy service may help explain its success. 34 Further, consumers/retailers can track LPG consumption in real-time to ensure timely home deliveries of refills, which eliminates the need to travel to retail locations and minimizes safety risks from illegal cylinder refills.…”