Stage 4: Transition to Scale
We refer to the USAID study, a "CBA on PAYG Solar Home Systems" published in Jan 2017, in an attempt to justify them an i-Kabin business case. The primary constraints are the excessive cost of product distribution, high default rates among pay-as-you-go customers, and a breakdown in partnerships among different actors along the supply chain."With the i-Kabin PAYG off-grid solution, we are attempting to provide a business model to meet the fundamental needs of SSA's "off-grid" communities.
Our TAM, the Total Addressable Market, are those approx 600 M persons living without access to light or power in sub-Saharan Africa. As stated above the i-kabin solution provides renewable and affordable access to clean home light and energy. The economy-of-scale provided by the i-Kabin along with its optimized location used to serve a community of 500 families and small business is the key to its success. This ingenuity allows for a vast cost reduction when compared to individual Solar Home Systems. Each family only needs the ipack battery and two LED lights that provide energy capacity to light two rooms for 3 to 4 hours per night for one whole week.
Furthermore, the ipack's energy storage capacity is much more significant of regular SHS batteries. There is no direct cost amortization of the i-Kabin cost placed on the family unit. ) The i-Kabin has women entrepreneurs as Franchise owners.
The spectrum of family ipack owners covers all ages, genders and even economic strata. For example, we shall commence our Pilot is Lagos a city-state of 21 million. Those families that can afford supplement power supply with diesel gensets and power-invertors, both of which have a high CAPEX, running cost and pollute!
The i-Kabin solution is available to both urban and rural populations. It can support those people living at the BOP and economic strata much much higher who must depend on the unreliable electrical grid infrastructure.
Why? Price, availability, and effectiveness. Most of the off-grid power solutions in Nigeria (our beachhead into all of SSA) are SHS products, which has OEMs partnering with either Mobile Network Operators or local Banks. The centrally located i-Kabin offers "economies of scale." The capital price of the i-Pack battery is $ 50 and much lower to procure or to obtain a micro-loan. Home SHS can cost up to $ 250 to buy. The overall capital cost of an i-Kabin community, consisting of the installed i-Kabin and its 500 paying and weekly recurring client (i.e., the iPack owners) is approx 35% of that of a hypothetical SHS community of 500 SHS owners. Also, the efficiency of establishing field operations, an I-kabin is installed in less than a day, and the 500 ipack batteries can be pre-sold and distributed to the families that same day. If a micro-loan of, for example, USD 25, i.e., half the ipack price can be repaid with an additional weekly fee when the consumer is recharging their ipack.
The energy capacity of the iPack battery is generally much more substantial than many of the standard SHS batteries, and ergo cost per Whr is much more economical. Solar Home Services has previously described that they could replace the use of i-Kabin services. However, these numerous SHS are available today, but they are unaffordable to much of impoverished rural residents. i-Kabin's are a village-centric marketplace, and SHS requires users to commit to financial debt to procure the products.