In my last post I mentioned non-profit and for-profit business ventures around the world with a mission to improve society and the environment. It would be naïve to say that the driving force in business is to benefit others. So what is driving entrepreneurs to Africa? An article recently featured in The New Yorker called “The Race to Solar-Power Africa” says it all.The movers and shakers of the business world have finally realized the potential for solar start-ups in Africa. One such start-up is called Off Grid Electric. Off Grid provides lighting for families through a solar panel subscription service.
Electricity in regions such as rural Ghana and Tanzania have scant electricity sources, leading to neighborhoods rife with power blackouts. In the late 1990s Chinese and UK companies began mass producing solar panels for Africa. The low quality materials soon broke down. People were sabotaged by their plans to upgrade. This is why potential customers are timorous when it comes to leaving thirty-dollar-a-month kerosene for eight-dollar a month solar panels, for three years. Nevertheless, employees of Off-Grid are not stymied. In fact, they are rather sedulous when it comes to product promotion- they explain to villagers how to use the product, offer free repairs or product replacements when necessary, even set up demonstrations where crowds will gather to see the product at work.
“This is what an emerging economy looks like. This is young people, this is entrepreneurialism, this is where growth will be.” -Xavier Helgesen, C.E.O. of Off-Grid Electric
The setup includes a solar panel, a few lights, a small yet efficient television, and a phone charger. The phone charger enables customers to use their phones to pay for the monthly expense. Issues with money transfer on mobile devices are a big issue for Off-Grid, as smart phones are rare and people often utilize flip phones with tremendously small buttons and frequently cracked screens. Even still, citizens of Tanzania and Rwanda are willing to take the risks in order to have better light. This allows their children to study late at night and do better in school. The television, though small, entertains entire communities. There is but one thing Off-Grid is supplicated for by their customers: Please, please, add a fan. Executives at the company are wary of the energy usage of a fan that would not be supported by single solar panel but are driven to find a solution.
In closing, let me return to my original question: What is bringing entrepreneurs to Africa? Companies like Off-Grid aren’t reigning in the cash right now. But they can see into the future. They are investing in infrastructure. They are making connections, getting familiar with the community and culture, and creating literal road maps that could put them above any other companies who try to capitalize on this market. Executives like Xavier Helgesen probably wonder if this is in fact a growing market, or if solar demand in Africa has reached its zenith. Things could completely reverse if the price of raw materials drastically increases in the next few years. But people want change. And the risks? It’s the cost of doing business.