Innovative Business Models and Financing Mechanisms for PV Deployment in Emerging Regions

 

Like most renewable energies PV technology faces the problem of high upfront cost. This problem is particularly pronounced in emerging regions where purchasing power is low and most people do not have access to commercial financing. Under such conditions, PV technology can only spread when innovative business models and financing mechanisms are available, which are adapted to the specific conditions in these regions.

The paper intends to provide the reader with ideas about how the issue could be addressed. Six case studies of innovative business models and financing mechanisms are presented, ranging from pico-sized systems to large-scale PV plants including grid-connected as well as off-grid PV systems:

1) A pay-as-you-go business model, developed by Azuri Techologies, UK, shows how thousands of low-income households in Africa can get access to affordable lighting and phone charging systems.

Two examples of large manufacturing companies, (2) Grundfos, Denmark, and (3) Chloride Exide, Kenya, show different ways to spread PV technology and services to new application areas using existing  distribution networks and service partners.

4) A business model developed by Mosaic, United States, shows how crowdfunding can be used to offer individual people investment opportunities in PV installations.

5) Gham Power, Nepal, has developed a business model for urban hybrid micro-grids as an answer to unreliable electricity supplies from the public grid.

6) A business model from SunEdison, India, offers individuals the possibility to own a power plant in the MWp range, allowing them to hedge against raising electricity tariffs.

The case studies illustrate that the generation of successful business models is not an easy task that can be done in just a couple of days. The specific regulatory, economic, social and cultural situation in a region has to be well understood and addressed in business models.

Successful business models usually include a financing component. This is particularly important for the mass market in rural areas of emerging regions where most people do not have access to commercial financing, or are overwhelmed in dealing with loan applications. Furthermore, to be attractive for potential customers, business models must appear to be clear and simple, even if sophisticated processes run below the surface.