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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]