‘Pay-as-you-cook’ energy solution hopes to appeal to rural Africa
In sub-Saharan Africa, millions cook by burning wood and charcoal, which can lead to serious health issues. Data shows that between 490,000 to 760,000 people in the continent died due to inhaling cooking smoke in 2015.
But there is a healthier, more effective alternative: liquefied petroleum gas, or LPG. It creates substantially less household air pollution, and in most cases is cheaper than traditional energy sources. But according to Envirofit, a business which develops energy products for people living in remote parts of the world, only 5% of sub-Saharan Africa cooks with LPG.
One reason for this low uptake, according to Zulfiqar Wali, general manager for East Africa at Envirofit, is the high upfront cost for a full cylinder of LPG. It must be purchased in bulk, which doesn’t match the consumption patterns of low-income, rural customers who prefer buying in small quantities.
Envirofit has come up with an innovative pay-as-you-go solution that allows families to purchase LPG in small quantities as they need it, one meal or one day at a time.
The company calls it ‘SmartGas’, and it works as follows: Households sign up and are provided with a full tank of LPG. Gas flow from the cylinder is controlled by the company’s SIM/GPS SmartGas valve and to activate the supply of gas, customers need to purchase credits with mobile money through an app. Before their credit runs out, the system notifies the customer so that they can top up again, and are not left without gas in the middle of cooking a meal. Those that want to stop using the system can simply notify Envirofit to have it removed. The only upfront fee is a refundable US$20 deposit when the tank is initially delivered.
Envirofit is, however, not the only player in this industry, with KopaGas (Tanzania) and PayGo Energy (Kenya) having comparable offerings. The business model is similar to the off-grid solar energy solutions offered by companies such as M-Kopa and Lumos Global, which also allow their customers to pay for their solar systems in instalments through mobile money.
But while operators like Envirofit can make LPG technologies cheaper, the low uptake in cleaner cooking fuels isn’t solely because of affordability.
According to Wali, LPG supply centres are limited and people often have to walk long distances to refill their cylinders. Other challenges include not knowing when the gas will run out and the common practive of under-filling cylinders.
“It’s much easier for someone to go cut down a tree outside their house,” he said.
However, according to Wali, the biggest hindrance to LPG uptake is the lack of government incentives. “African countries need to encourage the use of it.”
In Kenya the government has taken steps to address some of the issues, such as scrapping value-added tax (VAT) on LPG.
In January 2018, Envirofit aims to start piloting its SmartGas solution in Kenya and Ghana, countries, which according to Wali, “have populations with good disposal incomes, flexible government legislations with respect to LPG, good telecommunications set-ups [and] successful mobile money platforms”.