Standard Microgrid - Reimagining the African utility

Smart, solar powered microgrids providing modern, affordable energy services to customers when they need it, for appliances they value most.

Photo of Matthew Alcock
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Written by

I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Standard Microgrid

Year founded

2012

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • $250k - $500k

Number of beneficiaries impacted so far

  • 250 - 500

Organization type

  • Social enterprise

Secondary Focus Area

  • Rural development

Headquarters location: Country

  • Zambia

Headquarters location: City

Lusaka

Location(s) of impact

Zambia: Lusaka, Lower Zambezi

Website

www.standardmicrogrid.com

Facebook URL

https://www.facebook.com/standardmicrogrid/

Problem: What problem is this initiative trying to address?

In Sub-Saharan Africa, it is estimated that 590m people, 120m households do not have access to an electric grid connection. In addition, the current solutions that rural people rely on such as cell phone charging via roadside businesses using car batteries, and lighting via candles and kerosene are incredibly expensive. When looking at the cost of energy in Africa, we see an extreme example of the poverty premium, where the poorest of the poor are paying up to 100 times more per kWh than someone in the first world.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

We have created a fully community managed, no skill required, off-grid micro utility business model. Using proprietary technology to monitor the systems remotely, we are able to manage demand, collect payments and deliver the maximum benefit to our customers per kilowatt hour of energy produced.

Our mobile billing platform utilizes local, unskilled women within the community who make use of our mobile app to purchase and resell credit to fellow community members. Standard Microgrid’s target end users are peri-urban and rural village dwellers that make up the majority of the people in Sub-Saharan Africa who lack energy access. Due to the hyper-efficiency of our grid management, Standard Microgrid is able to provide energy access to these people at a price that is dramatically less than their current least cost alternative.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

Our pilot site is operational and selling energy services to 32 homes and businesses, as well as providing free energy to Mugurameno Basic School, Zambia (500+ learners). Small businesses in the community have expanded their offering to include refrigerated products, improving revenue. Regina, a young single mother and the community microgrid manager, sells energy using her smart phone, making a margin on sales.

Our current focus is on a roll out to 10 sites in Zambia in 2017/18 and funding is secured to expand rapidly to reach 150 sites by 2021, serving 21,750 connections and an estimated 130,500 end users. This will have the additional benefit of creating 470 direct jobs and 3000 temporary employment opportunities. We estimate that the 150 site project will generate 2.2 GWh/year. At this scale we will be able to self-fund subsequent systems from power sales revenue. Our goal is to deploy 10,000 grids within 10 years, serving 9 million end users with 100% renewable energy.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

The 150 village project we are currently working on is funded by a mix of government grants and Development Funding Institution debt and Equity. The 150 village project total funding requirement over 4 years is approximately $11M, of which we are finalizing due diligence on $7M. Over the course of the project we aim to raise additional equity and debt resources in subsequent funding rounds to bridge the $4M funding gap. At the 150 village scale we can sustainably fund growth of 40 grids per year leveraging internal cash generated with commercial debt.

The primary goal of the 150 village project is to demonstrate that distributed renewable microgrids can provide appropriate risk adjusted returns to investors given the right business model.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

At a business model level Standard Microgrid has a comparative advantage over existing distributed energy service companies as our approach is a complete reimagining of how energy is produced and sold rather than an adaptation of antiquated models. Our approach has been community-centric since the start, and the technology developed over the years is informed by years of research into the unique energy consumption characteristics and community dynamics of African communities.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

In 2013, while doing research into renewable energy access in Tanzania, Brian Somers (Standard Microgrid founder) met a young farmer named Edisio who by harnessing the power of a nearby stream using old bicycle parts and a recycled generator alternator, created a microgrid delivering power to his community. Edisio created a strong link between what his customers paid, and the service they received. $1 per month for 1 lightbulb and a radio, or $3 to add a TV to the basic package. Standard Microgrid has adapted this concept using a proprietary grid management and payment platform paired with a quick-to-deploy standardized solar energy power unit to remotely manage demand while delivering the maximum benefit to our customers per kilowatt hour of energy produced.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Upon recommendation from others

Evaluation results

2 evaluations so far

1. Overall evaluation

5 - This idea rocked my world. It’s awesome! - 100%

4 - This idea seems really exciting. With a little more polishing, it’d be among my favorites. - 0%

3 - I think the idea is great, but it needs some work before it moves onto the next round. - 0%

2 - I liked it fine but preferred others. - 0%

1 - It didn’t make my heart beat faster. Needs significant revisions. - 0%

2. Innovation

5 - Absolutely, 100%! - 0%

4 - I feel really good about this - very promising - 100%

3 - This has some good elements and some areas for development - 0%

2 - This doesn’t inspire me so much - 0%

1 - This entry is weak here - 0%

3. Social and/or Environmental Impact

5 - Absolutely, 100%! - 0%

4 - I feel really good about this - very promising - 100%

3 - This has some good elements and some areas for development - 0%

2 - This doesn’t inspire me so much - 0%

1 - This entry is weak here - 0%

4. Financial sustainability

5 - Absolutely, 100%! - 0%

4 - I feel really good about this - very promising - 100%

3 - This has some good elements and some areas for development - 100%

2 - This doesn’t inspire me so much - 0%

1 - This entry is weak here - 0%

Nothing stands out! I thought it was great. - 0%

5. Potential to Scale / Replicability

5 - Absolutely, 100%! - 50%

4 - I feel really good about this - very promising - 50%

3 - This has some good elements and some areas for development - 0%

2 - This doesn’t inspire me so much - 0%

1 - This entry is weak here - 0%

6. Organizational Leadership

5 - Absolutely, 100%! - 0%

4 - I feel really good about this - very promising - 100%

3 - This has some good elements and some areas for development - 0%

2 - This doesn’t inspire me so much - 0%

1 - This entry is weak here - 0%

7. Potential for Creating Shared Value

5 - Absolutely, 100%! - 50%

4 - I feel really good about this - very promising - 50%

3 - This has some good elements and some areas for development - 0%

2 - This doesn’t inspire me so much - 0%

1 - This entry is weak here - 0%

2 comments

Join the conversation:

Comment
Photo of GIROUD

Could we expect development of your project in Senegal?

Photo of Matthew Alcock

Hi Giroud

We are busy expanding the project in Zambia, but will certainly look to the rest of Africa in due course. We are also aiming to partner with developers looking to get into the microgrid space, this could be another means of reaching Senegal.

Regards
Matt