Solar Cooking and Energy Service Companies: An Unexplored Market Opportunity?

Solar cooking, as a technology and group of products, has existed for many decades, with examples being used in the 1970s. The technology in its simplest form has remained relatively unchanged since then, with the basic premise being either a flat or parabolic reflecting surface, placed in the sun, reflecting sunlight onto a cooking chamber. This can be either below the flat-plate reflector, or at the focal point of the parabolic collector. These types of devices are easy to manufacture and can be extremely cost-effective, with little more than a reflecting surface (for example, foil-backed card) and a cooking vessel needed for a minimum setup. These features give this technology particular applicability for targeting bottom-of-pyramid consumers with sustainability interventions: typical prices for simple designs (such as the flat-plate reflector shown below) range from US$3-5.

Solar box cooker made from carboard boxes and aluminium foil. Image: https://nakazora.files.wordpress.com/2011/06/solar-cooker1.jpg

Parabolic solar cooker in use at an informal settlement in Barcelona. Image: Brinerustle / Wikimedia Commons / CC BY-SA 3.0

 

A number of companies currently distribute simple kits for creating solar cookers from scratch, usually in the form of a reflective card template for the reflecting surface. However, these pre-packed kits are often more expensive than locally-sourcing materials for manufacture, ranging up to US$30-40, without offering meaningful benefits to the consumer aside from convenience. There are also a number of companies in developing countries that distribute full solar cookers to consumers using a direct-purchase business model, such as SunFire in South Africa and L’Obel Solar Power in India. Prices for these designs, commonly higher-quality parabolic mirror cookers, range up to US$200.

As such, it appears there is an opportunity for low-cost solar cooking business to develop markets for cheap, reliable solar cookers for bottom-of-pyramid consumers. In addition, through using alternative payment models for business, higher-cost designs can become more accessible to a greater number of consumers. Offering micro-credit products for deferred purchasing of solar cookers, or engaging with consumers on a fee-for-service basis with consumers paying a monthly fee for their product, would allow mid-range technologies to become accessible to consumers with lower incomes.

Other opportunities exist in the solar cooking market space for complimentary technologies, in particular heat-retention bags such as the Wonderbag from South Africa. This is designed to fit around the cooking vessel to retain heat and slow-cook the contents, after it has already been heated, reducing the overall energy requirement for cooking. Whilst this technology is perhaps most applicable to wood or charcoal-fired stoves, it can also help improve convenience when using solar cooking products. For example, rather than leaving a cooking vessel in the solar cooker for up to six hours, it can be left there for 1.5-2 hours, then transferred to the Wonderbag for further cooking.

For more information on the Wonderbag and use-case studies, please refer to https://samsetproject.wordpress.com/2017/04/10/energy-poverty-in-peri-urban-communities-in-polokwane-south-africa-part-1-identifying-the-issues/

— Daniel Kerr, UCL Energy Institute

References

Teach A Man To Fish (2009) Solar Cooker Business Guide. Available at: http://www.teachamantofish.org.uk/resources/incomegeneration/Solar-Cooker-Business-Guide.pdf

Gautam (2011) Microfinance Intervention for Financing Solar Cooking Technologies – Financing With Savings. Available at: http://www.microfinancegateway.org/sites/default/files/mfg-en-paper-microfinance-intervention-for-financing-solar-cooking-technologies-financing-with-savings-mar-2011.pdf

Solar Cookers International: CooKit. https://shop.solarcookers.org/?pn=CooKit&cn=Solar+Cookers&p=621&c=27

L’Obel Solar Power Systems: Solar Thermal Products: http://www.lobelpower.com/solar_thermal_product.htm

SunFire Solutions: http://www.sunfire.co.za/wp/

Wonderbag World: http://www.wonderbagworld.com/

Kitonyoni Solar Mini-grid and Integration of Thermal Energy Services

Binu Parthan from SEA writes on his recent visit to the Kitonyoni Solar Mini-Grid project, part of the University of Southampton’s efforts for the Energy for Development (E4D) project they lead.

The solar mini-grid at Kitonyoni near Machakos in Makueni County was financed by the UK government and commissioned in 2012 by the STEPs partner The Sustainable Energy Research Group at University of Southampton. The Kitonyoni Solar mini-grid is managed by Makueni County Solar Energy Co-op Society Ltd which is owned and managed by the community.

Management of the Solar Electric Cooperative and manager of the mini-grid business. Image: Sustainable Energy Associates

In July 2016, I travelled to Kitonyoni to visit the solar min-grid and meet with the community. While at Kitonyoni, I met with Joseph, Monicah, William and Shadrack from the management Makueni County Solar Energy Co-op Society Ltd and also with Stephen, the manager of the mini-grid and energy service business. With the community leaders and the manager of the mini-grid, I visited several businesses and households that were consuming electricity from the cooperative to understand the business model. The solar electric cooperative seems to be professionally managed and financially sustainable. They operate on a for-profit business basis and the financial accounts reveal that the operation is financially sustainable. The electricity cooperative uses a pre-paid card system for electricity sales and payments which seems to be working well. The electricity consumers are more conscious of energy use and payments and the cooperative is also happy with the upfront collections. The number of shops in the Kitonyoni market has significantly increased since the solar mini-grid was commissioned and the value of the land in the area has also almost tripled. However, the tariff charged by the solar electric cooperative is considerably higher than the public electricity utility but the community has been willing to pay a higher tariff due to better availability and reliability.

One of the new businesses established in the Kitonyoni market powered by the solar mini-grid. Image: Sustainable Energy Associates/span>

STEPs project team at University of Southampton had carried out a survey to examine the possibility of integrating thermal energy services into the existing electrical energy service business model. The results showed that 90% of the households in Kitonyoni use firewood for cooking which is available without cost to the community (Bahaj and Kanani, 2016). While the households spends over 5 hours to gather firewood, there is limited interest in switching to cleaner cooking options such as LPG which involve additional financial expenditure. The opportunity to integrate a solar thermal energy service along with the electricity service seems rather limited due to limited scope and demand for commercial fuels. The firewood is available freely in the area and LPG distribution networks are not available in the village.  Therefore currently, there does not seem to be a business case for introduction of an LPG franchise model and integrate the model into the solar electricity business. However some thoughts that I shared with the community were:

Since households and restaurants are cooking in separate rooms than their houses and as there is a preference for community schemes, will a community electric cooking scheme succeed? This may be relevant as on most days the battery bank of the solar mini-grid seems to be fully charged in the early afternoon and this could provide an opportunity for a central cluster of electric induction cookers which people can use to cook on a pay per use basis(similar to battery charging) to the cooperative.

It is possible that people may opt for efficient Cookstoves/Jikos if available on a hire-purchase/PAYG basis and reduce the amount of firewood to be collected resulting in time savings. An efficient Jiko will cost 45 $ which could be offered on a loan basis with daily/weekly/monthly payments to people by the cooperative for 6 months to 1 year tenure. These funds could be revolved over the time period to reach other members.

A differential tariff with a lower tier-tariff for the shops and establishments that use electricity during the day will likely improve the revenue model of the cooperative and can increase the utilisation levels. Such a tariff regime could allow the use of induction electric cookers at households during the day. Such a development could result in increasing sales and revenue and improving the business viability.

Cooking using firewood and a metallic stove in Kitonyoni. Image: Sustainable Energy Associates

Therefore the technology options for thermal energy and cooking in Kitonyoni is electric cooking or efficient Cookstoves with the possible business models of pay-per-use or hire-purchase respectively. A differential tariff with lower off-peak tariff could also allow electric cooking during the day time and improve the business model. These options are not entirely obvious and needs to be investigated and defined. This approach will certainly face stiff competition from free biomass availability and availability of free time for fire-wood collection.

Dr. Binu Parthan

Clean Cooking Technologies and Dissemination: Growing Markets

Clean cookstoves, also known as improved cookstoves (ICS) have the potential to significantly change patterns of household and institutional energy use in developing countries. However, access to clean cookstoves for consumers in developing countries remains low, despite high levels of fuel use appropriate to cookstoves being prevalent in developing countries, particularly in rural areas.

Share of population using solid fuels with access to improved cookstoves in Developed Countries (DCs), Least Developed Countries (LDCs) and Sub-Saharan Africa (SSA) [1]

The use of clean cookstoves has the potential to improve livelihoods, particularly for women and children, in developing countries through alleviating the time burden of gathering fuel, allowing users to spend more of their time on other activities, for example income generation. Daily collection of firewood for cooking can vary in duration from 3 hours [7] to seven hours [8]. Clean cookstove technologies such as rocket stoves can achieve the same cooking results, in the same time, while using just 60% of the fuel [8]. Global Alliance for Clean Cookstoves research has shown that traditional cookstove-using households in India, Bangladesh and Nepal on average spend 660 hours/year on fuelwood collection, while improved cookstove households spend just 539 hours/year [9]. Indoor air quality improvements are another key benefit. Around 3.8 million premature deaths annually are caused by non-communicable diseases, such as heart diseases and lung cancer that can be attributed to indoor air pollution [3].

Removing poorly-combusting, high-smoke fuels such as traditional wood fuels from the household energy mix in developing countries, and reducing indoor air pollution consequently, would have huge positive consequences for public health in the developing world.

Clean cookstoves technologies tend to be demarcated on the type of fuel used, as well as the general design of the cookstove and its technological aims. These cookstoves can also be demarcated through cost, with lower-cost cookstoves made from clay or metal with a clay lining, and higher-cost stoves using factory-machined materials like metals. Differences in cost tend to lead to different target market, with low-cost cookstoves targeting rural consumers, and higher-cost cookstoves focusing on emerging middle classes and high-income employees. Costs for a household clean cookstove can range from US$10 to US$350+, and as such different business models are required to disseminate these stoves to best reach their target markets. High-cost stoves are most commonly directly sold to consumers, whereas low-cost stoves can be available through government or donor programs of dissemination, as well as through direct purchase, vendor-credit or micro-credit models. [4] [6]

Stovetech combined wood/charcoal improved cookstove. Source: http://inhabitat.com/four-cooking-stove-designs-that-can-save-the-world/

Solid fuel cookstoves, for example cookstoves using traditional woodfuels, tend to aim for significantly more efficient combustion of fuels, reducing indoor air pollution in the form of smoke and particulate matter, as well as generating more heat. These efficient designs can focus on combusting fuel more effectively, through designing combustion chambers to allow for more aerobic combustion, whereas others focus on having a heavily-insulated cooking chamber to reduce heat loss, focusing on longer cooking times for the same amount of fuel. Other cookstove designs for developing countries focus on using more efficient fuels with low-cost technology. Some examples of this include efficient charcoal stoves, as well as LPG stoves designed for developing country use.

Lab efficiencies of various established cookstove designs used in the developing world. Table established by D. Kerr derived from http://catalog.cleancookstoves.org/test-results, with standards available online at: http://cleancookstoves.org/technology-and-fuels/testing/protocols.html

However, lab efficiencies do not always translate into real-world efficiencies. A recent Indian cookstoves study conducted by researchers at the University of Washington and the University of British Colombia found disparities in real-world use efficiencies in a recent CDM program of cookstove dissemination from the Indian government. Particulate matter emissions especially were higher than expected, which may have been due to the ‘stove-stacking’ phenomenon, where families continue to use traditional cookstoves after receiving an improved cookstove. Some 40% of households in this study were found to be doing this [5].

Dissemination of clean cookstoves, and growth in access to the technologies, has the potential to have a significant positive impact on the sustainability of energy use and improvement of livelihoods of consumers in developing countries. Whilst state-run programs have had some success in directly distributing clean cookstoves, market-based measures have been shown to have significant impacts over the medium-long term, and private cookstove markets have developed in a number of Sub-Saharan African countries, such as Kenya, South Africa and Uganda. Markets across the world have disseminated large numbers of cookstoves, with over 12 million disseminated in China in the 2012-2014 period, 4.5 million in Ethiopia, and nearly 3 million in Cambodia [12]. The Kenyan clean cookstoves market was sized at 2,565,954 units in 2012, with high levels of urban and peri-urban penetration (~35%), but significantly less rural coverage [10]. The Ugandan market by comparison is estimated to be around 600,000 households, with urban areas again dominating this group [11].

This series of posts aims to explore the variety of models that private businesses can use to achieve scale and sustainability in their operations in the clean cookstoves sector [2]. Direct dissemination will be compared to vendor purchase, vendor credit and micro-credit models in the second blog of this series. Post three will explore the clean cookstoves value chain and identify opportunities for business growth along the value chain, and the fourth post in this series will examine the role of government in promoting clean cookstoves businesses.

– Daniel Kerr, UCL Energy Institute

[1] Bazilian et al. (2011) Partnerships for access to modern cooking fuels and technologies. Current Opinion in Environmental Sustainability, Vol. 3, pp. 254 – 259.

[2] Rai & McDonald, GVEP International (2009) Cookstoves and markets: experiences, successes and opportunities. Available at: http://www.hedon.info/docs/GVEP_Markets_and_Cookstoves__.pdf

[3] WHO Website (2016) Household air pollution and health.  Available at: http://www.who.int/mediacentre/factsheets/fs292/en/

[4] Global Alliance for Clean Cookstoves (2016) Clean Cooking Catalog.  Available at: http://catalog.cleancookstoves.org/stoves

[5] University of Washington (2016) Carbon-financed cookstove fails to deliver hoped-for benefits in the field. Available at: http://www.washington.edu/news/2016/07/27/carbon-financed-cookstove-fails-to-deliver-hoped-for-benefits-in-the-field/

[6] Global Alliance for Clean Cookstoves (2016) Business and Financing Models., Available at: http://carbonfinanceforcookstoves.org/implementation/cookstove-value-chain/business-models/

[7] FAO (2015) Running out of time: The reduction of women’s work burden in agricultural production. Available at: http://www.fao.org/3/a-i4741e.pdf

[8] GACC (2015) The Use of Behaviour Change Techniques in Clean Cooking Interventions to Achieve Health, Economic and Environmental Impact. Available at: https://cleancookstoves.org/binary-data/RESOURCE/file/000/000/369-1.pdf  

[9] GACC/Practical Action (2014) Gender and Livelihoods Impacts of Clean Cookstoves in South Asia. Available at: https://cleancookstoves.org/binary-data/RESOURCE/file/000/000/357-1.pdf

[10] GVEP/GACC (2012) Kenya Market Assessment: Sector Mapping. Available at: https://cleancookstoves.org/binary-data/RESOURCE/file/000/000/166-1.pdf

[11] GVEP/GACC (2012) Uganda Market Assessment: Sector Mapping. Available at: http://cleancookstoves.org/resources_files/uganda-market-assessment-mapping.pdf

[12] REN21 (2016) Renewables Global Status Report. Available at: http://www.ren21.net/wp-content/uploads/2016/06/GSR_2016_Full_Report_REN21.pdf