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US-based solar services company SolarCity is to invest US$7mn in Tanzanian solar lighting services company Off Grid Electric to produce off-grid solar power
According to industry sources, SolarCity has teamed up with venture firms Vulcan Capital and Omidyar Network in this investment, which is part of the initiative to develop off-grid solar in developing nations. Off-grid solar refers to electricity generation in areas with little or no access to power due to scattered population. This energy is generated in a self-sufficient manner without any dependence on the main electricity grid or other public utilities.
Off.Grid:Electric stated that it uses a mobile payment platform which allows customers in Africa to purchase solar lighting in small amounts, rather than having to pay for an entire solar power system upfront. This approach is becoming increasingly attractive in the developing world due to the use of cell phones, added the company.
Lyndon Rive, CEO of Solar City, said, “Solar power is already more cost-effective than kerosene and other polluting power sources that are common in the developing world. Many emerging economies skipped the build-out of phone lines to go straight to cell phones, and the combination of solar and storage can obviate the need for more power lines. Off Grid’s growth could have a profoundly positive impact on the economies, human health, and air and water quality in the markets it serves."
With a minimum of US$5 per month, Off.Grid:Electric said it provides access to solar power through its M-Power energy hub in Tanzania, adding that it also encouraged potential buyers to switch from using kerosene lamps to solar.
The investment allows SolarCity to enter the off-grid solar market where mobile money platforms are enabling pay-as-you-go services in Africa, Asia and the Middle East. In the past six months, Khosla Ventures, DFJ, Omidyar Network and Gray Ghost Ventures have invested US$13mn in off-grid solar lighting companies in Africa, stated reports.