Private enterprises blaze a trail in continent’s solar power sector
In summer 2019, Li Xia arrived at a school in a small village in Ethiopia.
Locals and students at Nayata High School gave her a warm welcome as she and her colleagues walked among the thatched-roof school buildings.
Li, the founder of Shenzhen Power-Solution Ind Co, which is based in Guangdong province and makes solar-powered lighting products, was not on a business trip－the purpose of her visit was to reward students with solar-powered lamps for excellence in their studies.
Smiling students at the school proudly held the lamps high above their heads.
The village where the school is located has no access to electricity. Residents have long been living without power and some had no idea what a lamp looked like.
According to the World Bank, only about half of Ethiopia’s population had access to electricity as of 2019.
Moreover, the lack of electricity is pervasive in sub-Saharan Africa, especially in rural areas, with the continent facing the biggest global shortfall in access to energy.
According to the International Energy Agency, nearly 800 million people worldwide live without electricity, about 75 percent of them in sub-Saharan Africa.
These people, usually earning incomes below the poverty line, either live in darkness after sunset or use the dim light of candles and kerosene lamps.
Media reports said that due to a lack of lighting, people have been killed by poisonous snakes in some regions and women have been sexually assaulted outdoors.
Li, who was born in northeastern China in the 1980s, dedicated herself to solar power efforts in Africa more than 10 years ago.
She said the continent has great potential to develop solar energy thanks to its geographical advantages, adding that there is a huge demand for such energy in Africa.
In recent years, policymakers, private investors and end-users have turned to off-grid solar products as an affordable and sustainable solution to accessing electricity.
In 2020, a report published by the World Bank Group and the Global Off-Grid Lighting Association said the off-grid solar sector had grown quickly in the past decade to become a $1.75 billion annual market serving 420 million users. As a result, prolonged growth is forecast for this market.
A summary of the report, published by the World Bank, said off-grid solar solutions have played a pivotal role in extending energy access to millions of people in sub-Saharan Africa and South Asia.
Shenzhen Power-Solution Ind Co jumped on the bandwagon and set up its own factory in 2012 with just 10 employees.
As a small and medium-sized enterprise, or SME, it is far beyond the company’s reach to construct large-scale solar power infrastructure. So, Li opted for off-grid solar power kits instead.
A decade ago, solar energy was little known in Ethiopia, even among local businesspeople.
Faisal Ahmed Mohammed, one of Shenzhen Power-Solution Ind Co’s distributors in Ethiopia, said he saw the company’s solar products about 10 years ago at a business fair and was “very interested”.
But at the time, he lacked confidence in the industry, so he only bought a small number of the company’s products.
“Back then, nobody had solar energy in Ethiopia. So we introduced people to this market. Since then, they have become aware of solar energy, and demand has increased tremendously. Because of this, I imported more products,” Mohammed said.
One of the company’s most popular products, Candles Killer, has won many prizes for design, including the Red Dot Award in 2018－an international competition for product and communication design, and also design concepts.
The Candles Killer features a pedestal, with a reading light on one side and a solar panel on the other. The lamp is attached to a plastic bottle by using an adjustable metal bracket, enabling it to be elevated and used as a desk light.
The product, which is made from biodegradable material, can also be placed on a wall and adjusted to different angles.
Li said, “For households in Africa, kerosene lamps are the primary lighting source, but they are expensive to run and also unsafe because kerosene is flammable as well as poisonous when inhaled or ingested.
“A kerosene lamp costs about $1 to $1.50 a month to run, but for $5 people can buy a Candles Killer, which has a working life of at least three years. It’s also cleaner and gives three times the amount of light as a kerosene lamp,” Li said.
The World Bank estimates that breathing kerosene fumes is the equivalent of smoking two packs of cigarettes a day. Two-thirds of adult females with lung cancer in developing countries are nonsmokers.
In addition to the Candles Killer, the Shenzhen company has developed products such as a portable solar lantern that can charge mobile phones, as well as solar-powered home lighting systems.
As of last year, the company had provided solar lighting to more than 42 million people from some 6 million households, reducing carbon emissions by over 5 million metric tons.
Shenzhen Power-Solution Ind Co is just one of the Chinese private enterprises working in the solar sector in Africa.
Beebeejump, another company based in Shenzhen, entered the solar energy industry in Nigeria in 2018. It also started by manufacturing basic lighting products, before expanding to sell solar power supply kits generating hundreds of kilowatts of electricity.
Chen Yeying, director of the company, who has vast experience in foreign trade, said: “Our products range from small lighting gadgets to energy storage systems. For example, by putting a solar panel on a roof, users can charge mobile phones and other devices with the help of solar radiation.”
Beebeejump has seen steady sales growth. In 2019, its revenue exceeded 10 million yuan ($1.58 million), while last year the figure topped 60 million yuan.
In the next two to three years, Chen expects the company to become the top solar brand in Nigeria’s new energy industry. He is targeting three to five African markets within the next five years.
Chen said energy is the cornerstone for the development of a civilization, adding that he hopes to help narrow the energy gap in Africa.
The continent has the greatest solar energy potential in the world. The International Renewable Energy Agency estimates Africa’s solar energy potential at 60 million terawatt hours, or TWh, per year, compared with 3 million TWh annually for Europe, for example.
“Off-grid electrification will play a vital role in extending electricity access to rural communities, improving economic resilience and also recovery from the pandemic. We hope to solve power supply issues for 3 million people in areas vulnerable to blackouts and reduce carbon dioxide emissions by 500,000 tons each year,” Chen said.
Companies that solve social problems while achieving sustainable development in business are known as social enterprises.
Jiang Hui, secretary-general of the Alliance of Chinese Business in Africa for Social Responsibilities, said that as the scale of investment and cooperation between China and Africa continues to rise, social responsibilities become an increasingly important issue in economic and business cooperation.
“Chinese enterprises have helped accelerate the industrialization of Africa and contributed to local communities and economic development,” Jiang said.
Li, from Shenzhen Power-Solution Ind Co, said small Chinese businesses operating in Africa are not only lighting up the lives of the most vulnerable, but are also contributing to a better environment.
“This is also in line with the concept of building a community with a shared future for mankind, which is embedded in the Belt and Road Initiative,” she said.
When selling products in Africa, companies need to consider affordability.
Chinese companies, including Beebeejump and Shenzhen Power-Solution, have adopted a pay-as-you-go business model, allowing new customers who lack significant savings or easy access to loans to split the cost of a product at the point of sale into several small installments for repayment over months or even years.
LEMI Technology Development Co, which is based in Shenzhen and focuses on off-grid solar home systems and products in unelectrified areas worldwide, has been looking at more creative ways to make its products available for Africans on low incomes.
Chen Jiequn, the company’s founder, said: “We are figuring out more ways of trading, such as bartering. For example, Ethiopia is famous for its coffee. So people in that country could exchange coffee beans for solar power kits if they are short of money.”
She has also witnessed the fast-growing solar energy market in Africa. “Africa is a huge market and it will advance even after the basic demand for electricity is met in the future,” Chen Jiequn said.
“When people have lighting and a radio, they may next want a television. They want to entertain, educate themselves and their kids. They may also need some clippers to cut the kids’ hair, and would love to have a fridge. This is something the energy world is really eager to do. It is the energy ladder.
“Initially for our company, the cheapest lighting products were the most popular, accounting for more than 80 percent of our sales. But in recent years, this has changed. Now, the cheapest products only account for 20 percent of sales, as demand for bigger power supply products grows.”
Hui Honglin, a former consultant for Lighting Global, a World Bank Group initiative aimed at increasing access to off-grid solar energy for people living without electricity worldwide, said off-grid solar products are well suited to the current demand in Africa. They are also the continent’s best example of localization for China’s small-sized green products.
These environmentally friendly products not only light homes in sub-Saharan Africa but are also in line with the UN’s Sustainable Development Goals of ending poverty and protecting the environment.
Over the past two decades, Chinese private enterprises have played an active role in the development of the green energy industry at home and abroad, Hui said, adding that within the framework of the Belt and Road Initiative, there is a promising future for the growth of solar energy in Africa.
However, it is not plain sailing for SMEs operating in the solar sector in Africa, where the biggest challenge is obtaining enough money.
Li said that unlike state-sponsored giant companies, SMEs have extremely limited capital and resources.
“For small companies, it’s not easy to borrow from banks, because the banks think that what we are doing, especially in Africa, is risky,” Li said.
However, she said green energy, including solar power, is certain to become a worldwide trend due to its sustainability. State-owned enterprises and private ones in China should join hands in the future to play to each other’s strengths, Li added.
Chen, from Beebeejump, said Chinese companies in Africa need to understand local culture and living habits.
As an example, he cited ways to deal with local employees.
Initially, Beebeejump had more than 200 local employees in Nigeria and paid them at the same time as its staff members in China, meaning that payday fell on the 15th of the following month.
Chen Yeying said: “Then something weird happened. It wasn’t long before many of the African employees stopped showing up for work, without taking leave or calling in sick. I couldn’t figure out why, but finally we discovered the reason.”
It turned out that the delayed payment date left the employees with no money to take a cab or other transportation to work.
“In addition, despite incomes usually being low, Africans are more likely to consume, instead of saving. They immediately spend their money after getting paid. So, we came up with a new way of paying them. We pay part of their salaries in advance every week to ensure they can come to work every day and have enough money for daily life,” he said.