By 2015, Simpa Networks’ pay-as-you-go solar energy solution is bound to provide more than 60,000 household in rural India with better access to electricity. Supported by a $2 million equity investment by the Asian Development Bank (ADB), the company will offer an affordable clean energy solution to the underserved and underprivileged consumers in India.
The company’s mission is “to make modern energy simple, affordable, and accessible for everyone.” In order to achieve this goal, the company introduced a business model that will make sustainable energy choices affordable to the poor.
How it Works
Simpa’s pricing model is highly innovative and called Progressive Purchase. Customers make a small initial down payment for the solar system and then pre-pay for their future energy service. They can conveniently top up their systems in small user-defined increments via a m obile phone. Each of these payments also adds towards their final purchase price. Once the purchase price has fully been paid, the system unlocks permanently and continues to produce electricity without the need of any further payments.
The Importance of Energy Access
Today, there are approximately 1.6 billion people with no access to electricity and another 1 billion with only very unreliable access. Without this access, the poor depend on battery powered flashlights or kerosene lanterns for light and are unable to break the cycle of poverty as they are unable to take advantage of the numerous productive uses of energy. In addition, kerosene light comes with high operating costs, poor light quality and dangers to health and home.
Access to energy is therefore essential for every family’s economic livelihood, safety, health, educational achievement, and overall quality of life.
ADB’s Motivation to Invest
ADB hopes that the success of Simpa Networks could lead to increased venture capital funding for sustainable business models that deliver goods and services to those at the bottom of the economic pyramid.