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Innovative Business Models and
Financing Mechanisms for PV
Deployment in Emerging Regions
Dr. Thomas Meier
6th World Conference on Photovoltaic Energy Conversion WCPEC-6,
Tuesday, Nov. 25, 2014, Kyoto
Subtask 5B: Innovative Business Models and Financing
Mechanisms
Objective:
The objective is to evaluate and disseminate information on
new and innovative business models as economically
sustainable alternatives for PV deployment in emerging
regions.
Activity 5.1 General Analysis Framework
The Business Model Canvas
Figure 2 The Business Model Canvas (Source: Osterwalder et. al, 2010:44)
ValueCostMore info
(Source: Osterwalder et. al, 2010:44)
Activity 5.1 General Analysis Framework
Work Session in Lyon, April 2014
Example 1: Pico PV ‘Pay-as-you-go’ Business Model
Company: AZURI Technologies Ldt., UK
Specifications:
- 2.5 Wp PV module
- 3.3 Ah Lithium Iron Phosphate Battery
- two 60-lumen LED lights (ca. 8h/day)
- USB socket for phone charging
Example 1: Pico PV ‘Pay-as-you-go’ Business Model
Company: AZURI Technologies Ldt., UK
Costs:
- Installation fee: ~ US$10
- Weekly top ups: ~ $1.50
- Unlock after 80 weeks: ~ US$10
- Total: ~US$140 ~US$ 0.25/day
Competitor product by Safaricom: total
cost in 1 yr: ~US$ 215 US$ 0.6/day
The business model:
- Product designed for mass market (approx. 30’000 systems sold to date)
- Sold via local distributors/resellers
- Azuri generates revenues from commission top up cards
- Cloud-based distribution management system for real time monitoring of
customer status
Example 2: PV powered water supply solution
Company: Grundfos Lifelink, Denmark
A technical solution addressing three key sustainability problems in
rural water supply:
Technical sustainability
Long term service contract and remote
monitoring of plant operation.
Financial sustainability
Cash free pre-paid system via mobile
phones prevents mismanagement of
funds.
Financial Affordability
Financing models available to cover
the upfront cost of a water plant.
Kenya example: customers pay in average US$ 0.35 for 20 liter of safe
drinking water.
Source: http://www.grundfoslifelink.com/
Communal Water Point Mini Grid of Water Points
Example 2: PV powered water supply solution
Company: Grundfos Lifelink, Denmark
Example 3: Peer-to-Peer Funding of Renewable Energy
through Crowdfunding
Company: Mosaic, United States
Online solar marketplace connecting
investors with solar projects:
- Project sizes: 50kW to 1MW+.
- minimum investment is US$25.
- Annual interests 4.5% to 6.5%
- Repayment term: 60 to 120 months
- Notes are unsecured obligations of
Mosaic (!)
Example of PPA:
PG&E: US$0.109/kWh - Nov.2013-2033
Revenues by Mosaic
Origination fee: ca. 3%
Annual fee on principal: 1%
Example 4: PV investments as a hedge against raising
electricity tariffs
Company: SunEdison, India
Location: 18 MW Tirunelveli solar power plant in Tamil Nadu
- 12 blocks @ 0.75MWp and 9 blocks @ 1MWp
- Park set up & operated by SunEdison
- Investors can purchase one or several blocks, no need for
technical expertise
- Investors enjoy tax incentives (appreciated depreciation) and
locked electricity cost for system life-span (net-metering
system)
Sunedison’s revenues:
- one time development fee
- annual O&M payments
Large
Small
Rural Urban
Azuri
SunEdison
Mosaic
Chloride
Exide
Gham Power
Classification of
Models discussed
Grundfos
Grid-
connected
Off-Grid
Large
Small
Rural Urban
Azuri
SunEdison
Mosaic
Chloride
Exide
Gham Power
Classification of
Models discussed
Grundfos
Grid-
connected
Off-Grid
Large Systems
- Investment Opportunities
(O&M by professionals)
- Energy/Tariff Security
Small Systems
- End-use oriented (DC Systems) for
mass market
- Plug & play / low skill technology
- Key factors: Distribution channels,
Marketing activities, Partners
- Financing mech. For rural dwellers
Successful PV products and services must be
packaged in a way to appear clear and simple -
even if they are based on complex processes!
Task 9 Representatives from Switzerland
Thomas Meier – [email protected]
Alex Arter – [email protected]