For decades, power companies have been trying to bring electricity to the remote highlands of Guatemala, where densely forested mountainous terrain and distance between small communities have made conventional transmission methods difficult. But now, thanks to solar and the persistent efforts of a small renewable energy company, that objective may actually be within sight.
Quetsol, based in Guatemala City, has developed a means for supplying rural low-income homes with solar energy quickly, and is taking an unconventional way to gain support for their project. Their solar energy concept, which they refer to as a “pay-as-you-go” plan, circumvents the lengthy process that low-income families often must undergo to qualify for a microfinancing loan. Instead, it uses state-of-the-art technology to make it possible for households to hook up to solar immediately.
“The idea of bypassing the microfinancing institution is to eliminate the current barriers of the process, from approving credits, to the length of the process (40 day average),” explains CEO Juan Fermin Rodriguez, who co-founded the company with entrepreneur Manuel Antonio Aguilar in 2010.
According to Rodriguez, some 3,000 homes have purchased solar through Quetsol, and most have used microfinancing to pay the $260 up-front cost. But this is a very small portion of the two million homes in Guatemala that still don’t have access to electricity.
Microfinancing says, Rodriguez, while historically successful in many parts of the world, requires the cooperation of a financial institution to process many small loans, a system that may not always be economically feasible if there is only one or two banking institutions participating, and the potential customer base is in the millions. Rodriguez estimates that for every one household that has been approved, one has been lost in the application system.
In comparison, “(the) pay-as-you-go service will allow us to scale at the rate we generate the demand. This type of client has a superb repayment rate, so the risk is very low,” he says. “Through this model, we will be able to recover the 50 percent of customers lost in the credit process, cut down the process from an average of 40 days to three days, and most importantly, will be able to have a direct relationship with the end customer.” Rodriguez says their R&D includes 50 homes, with a 100 percent repayment rate.
With the pay-as-you-go model, the family will be supplied with a kit, and then purchase power based on an incremented supply. The basic rate provides power for about three lights and comes with a cell phone charger, a vital asset in many rural communities.
Best of all, he says, once the project is up and running, it requires no sponsors or donors to make it work.
“Our integral business model allows our customers to procure our service for a price cheaper than what they spend on candles and charging their cell phones monthly, which averages $16.”
The company is in the last stages of R&D and is working on the funding for the new technology that will allow the consumer to sign up and receive power immediately.
To do this, it has launched a campaign on Indiegogo that Rodriguez and Aguilar hope will, among other things, educate people about the necessity of getting solar power to Guatemala’s rural homes, as well as convey the visual limitations of how families live without electricity.
For the duration of the campaign, Rodriguez has vowed to “turn off the lights” in his self-imposed office/sleeping quarters, so that viewers (who can watch his candle-lit operation by Ustream) get an idea of just how difficult it is to live without lights.
He’s also vowed not to turn the lights back on until they’ve reached the required goal of $50,000.
Obviously, for the purpose of this demonstration, Rodriguez still has access to a computer. But the Ustream gives an minute-by-minute feel to what it is like for a person to limit their activities by the light and economic limitations of a single candle.
At the time of this writing, Quetsol has raised approximately half of what is needed to complete the R&D stage of the project and implement the technology. Rodriguez believes that Quetsol’s concept is not only viable in Guatemala, but throughout the world.
“We aim to increase the knowledge to others that there are 1.7 billion people without electricity around the world.”
With a little more than two weeks to go on the campaign, Rodriguez and Aguilar are hoping that crowdfunding backers will provide the support needed for launching their new model for solar – a model, Rodriguez says, will do more than provide much-needed resources for light, communications and safe water access.
“Through a market lense, Quetsol is developing an integral service model around the needs and limitations of our customer, respecting their expectations 100 percent of the way.”
According to Rodriguez it’s a concept that offers a win-win scenario for the consumer, as well as for small committed solar companies like Quetsol.
Images courtesy of Quetsol.