The goal of the prototype was to test whether offering energy-efficient appliances plus financing to purchase those appliances on mini-grid sites, is a profitable service addition for mini-grid developers. Appliance Financing 1.0 was focused on household appliances e.g., TVs, speakers, etc., while Appliance Financing 2.0 and Appliance Financing 3.0 are focused on income-generating or productive-use appliances.
Tests household appliances, such as TVs, fridges, and speakers.
Tests productive use appliances, such as grain mills and welders, and introduces Angaza as a payment platform to simplify developers’ tracking of loan repayments.
Introduces Asaga Technologies to supply energy-efficient productive use appliances customized to the African mini-grid market.
For Appliance Financing 2.0 and Appliance Financing 3.0, some of the key hypotheses we were testing going into the study were:
Grid economics: ARPU at treatment sites will be 10% higher than at control sites after two years
Load profile: ACPU during daylight hours at treatment sites will be 25% higher than at control sites after two years
Repayment: Historically higher-user customers will exhibit the highest repayment rates at treatment sites Appliance Financing analysis was conducted from data collected from 25 sites and over 12,000 connections. The results outperformed our ongoing hypothesis on ACPU growth. To scale Appliance Financing, the Lab is currently working with ESMAP and others to implement a consortium-driven, nationwide road-show approach, starting in Ethiopia.
Prototype Ideation and Design: Conducted user-centered workshops with developers and end-users to gauge prototype necessity.
Appliance Shortlisting: Agreed upon priority appliances suitable for leasing.
Financing Terms: Determined optimal financing terms, benchmarking against existing Solar Home Systems (SHS) rates.
Approval: Crafted a comprehensive study design, budget, and data collection plan; secured board approval from the funders for implementation.
Data Integration and Collection: Synchronized data from smart meters and inverters onto the Lab Odyssey platform while also gathering survey data and loan repayment metrics.
Launch and Follow-Up: Initiated the prototype with partner developers and monitored data collection and implementation progress.
Analysis and Publication: Examined household and business consumption data, site inverter data, and customer surveys, publishing the results for each prototype iteration.
The engagement succeeded in validating the addition of appliance financing as a value-added service for mini-grids, offering promising directions for scalability and impact.
Appliance financing is only effective in increasing mini-grid average consumption per user (ACPU) if the appliances financed are productive-use appliances. When household appliances were offered, ACPU reduced by 3% and 13% in East Africa and West Africa respectively. This is because income-generating appliances allow customers to increase their income and alleviate budget constraints
ACPU is 48% higher on sites where productive-use appliance financing is offered compared to sites where they are not
The top 20% of productive appliance financing users consume 16x more than their peers by meeting highly demanded community needs