Shedding light on the last mile: a study on the diffusion of pay as you go solar home systems in Central East Africa

TLDR: In this article, the authors apply the diffusion of innovations theory as a framework to investigate the last mile challenges encountered when launching a Pay As You Go Solar Home System in a region of Central East Africa.

About: This article is published in Energy Policy.The article was published on 2017-08-01 and is currently open access. It has received 66 citations till now. The article focuses on the topics: Last mile & Diffusion of innovations.

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Table 2: Default status analysis methodology example

Figure 1: Methodology of study of diffusion of innovation challenges for PAYG SHS in Central East Africa

Figure 2: Cumulative Sales of all units between 1st November 2013 and 1st March 2014

Table 3: Summary of the strengths and limitations of PAYG SHS in a region of Central East Africa

Figure 10: Evidence of low rate of neighbouring adoption of PAYG SHS in urban setting (Source: Adapted from Google Fusion Tables, 2014)

Figure 9: Evidence of high rate of neighbouring adoption of PAYG SHS in rural village (Source: Adapted from Google Fusion Tables, 2014)

Frequently asked questions

Q1. What contributions have the authors mentioned in the paper "Shedding light on the last mile: a study on the diffusion of pay as you go solar home systems in central east africa" ?

This paper applies the diffusion of innovations theory as a framework to investigate the ‘ last mile ’ challenges encountered when launching a Pay As You Go Solar Home System in a region of Central East Africa. Finally, this paper demonstrates the applicability of the diffusion of innovations theory as a viable framework for analysing last mile challenges associated with Solar Home Systems. The results indicate that Pay As You Go offers the potential to deliver a disruptive positive impact with regard to increasing access to clean affordable energy for the poor, however, both the technology and business model are more complex than current alternatives and therefore require a much more developed go-to-market strategy. The cost of achieving widespread diffusion is therefore higher than similar products sold at retail, yet this is balanced by potential for a much faster rate of adoption. 

Q2. What are the future works mentioned in the paper "Shedding light on the last mile: a study on the diffusion of pay as you go solar home systems in central east africa" ?

An additional drawback to the promotional events is that, as identified in the agents ’ interviews, potential customers hold off buying a full price system in the hope of obtaining a subsidized product in a future promotional event. Further research is required to compare adoption characteristics for differing demographics such as gender, occupation, wealth. The majority of sales agents did not feel it was their responsibility to chase up bad customers and by running a shop, they could not invest time in chasing up and potentially angering customers who may buy other products from them. The results of this study suggest that the most appropriate customers for such a product are those who live in rural communities with low migration rates and little access to alternative energy sources such as the grid. 

Q3. What are the current service models in development?

Current service models in development include rental, ‘energy escalators’, pay as you go and microfinance (Friebe, et al., 2013). 

Q4. Why is it important to oversee sales of the units?

Due to this increased complexity of a SHS compared to the likes of a solar lantern, which requires no installation nor long-term support, it is essential that sales of the units are overseen by a representative who is familiar with each customer. 

Q5. Why did the majority of respondents choose the SHS?

Approximately half of the survey respondents stated that their main reason for purchasing the SHS was because it offers the ability to charge their mobile phones. 

Q6. What is the definition of the term 'last mile'?

The term 'last mile' encompasses the most challenging aspect of delivering rural electrification which is delivering a product or service from a local urban centre to individual customers. 

Q7. What was the probability of a customer defaulting for a period of more than 8 weeks?

The total technical failures only made up 1/7th of defaulting customers and many of the issues appeared to be resolved quickly and therefore the explanation for large scale and sustained default may not be attributed to technical failure of the systems. 

Q8. What is the estimated value of the household lighting market for the world's poor?

The International Finance Corporation (IFC) estimates that the household lighting market for the world's poor may be worth $37 billion (IFC, 2012). 

Q9. How long did the customer believe they owned the unit?

The majority of the time the customer had genuine belief that they owned the unit because it was in their possession – in some cases for up to 6 months. 

Q10. What are the main communication channels used during this study?

These were selected because the main communication channels used during this study were direct group promotional events and interpersonal communication through local sales agents which had a significant impact on the rate of adoption. 

Q11. What percentage of customers were defaulting during the period between December 2013 and April 2014?

The issue of defaulting became pronounced during January 2014 whereby the percentage of functional (non-defaulting) units dropped dramatically from 90% to 40% over the period of 10 weeks (Figure 3). 

Q12. How many of the respondents agreed to return the unit?

Approximately a third of those interviewed accepted the terms and conditions but refused to return the unit claiming that they had full ownership of the unit. 

Q13. What is the impact of the lack of rural access to electricity?

The environmental and social cost of prolonged lack of rural access to electricity will also exacerbate the current social and environmental consequences associated with the burning of traditional fuels for lighting and cooking. 

Q14. How many rural households are unlikely to have access to electricity?

In addition to prohibitively expensive grid connection fees, the majority of rural households are unlikely to be presented with the option of grid connection for the next two to three decades.