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The startup that's powering rural Africa with affordable, smart microgrids

Powerhive is working with the US government to provide electricity for 20 million homes in Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania.

 Image: Powerhive

More than a century after the lightbulb was invented, 1.3 billion people worldwide -- or 18% of the global population and 22% of those living in developing countries -- still lack access to electricity. About 97% of those people live in sub-Saharan Africa and developing Asia, according to the International Energy Agency's 2014 World Energy Outlook report.

It's a sad statistic, but it presents a huge opportunity for renewable energy -- especially in Africa and Asia. The price of solar panels has decreased, battery storage is well on its way to being affordable, technology is getting smarter, and we are all becoming more connected to one another and the devices that power our lives.

Microgrids, which are small scale, efficient energy grids, incorporate all of those innovations, and they can be a key solution to one of the world's biggest problems. Even in rural areas, people tend to cluster together in small villages or towns, and these communities provide an ideal market for microgrids powered by solar.

"The costs are coming down, and everyone pays for energy -- most people have kerosene for lighting for example... that can be replaced with electricity because it's a cheaper, cleaner, better quality alternative," said Daniel Boucher from Powerhive, a leading microgrid solutions provider.

Powerhive is a technology platform and distributed microgrid provider, co-founded by Christopher Hornor, who previously expanded Better Energy Systems into East Africa where he introduced Club Solio, which leveraged mobile money to create the first pay-as-you go renewable energy service for off-grid areas, and Rik Wuts.

As of this week, its subsidiary, Powerhive East Africa Ltd., is the first private company in Kenya's history to be able to generate, distribute, and sell electricity to the public. That's a big deal because historically, rural electrification programs are run through public investments in grid expansion or improvement.

In 2011, Powerhive started with four pilot projects in Kisii, Kenya, with a total of 80 kilowatts of capacity. The projects served 300 customers, or about 1500 people.

Powerhive has the technology for microgrids covered from end to end. First, they use Site Wizard for Analysis, Reconnaissance, and Mapping (SWARM) to identify the markets that could be suitable for microgrids. It looks at satellite imagery and data that has already been collected by other sources to see what locations would generate the most power. Then, a team from Powerhive visits the site to talk to people on the ground and gauge customer interest.

"There are so many factors you can't gauge without getting on the ground and talking to people, whether it's the local politicians or whatever [else]," Boucher said.

Once a site is selected, the community gets Asali, a smart meter, installed as the central hardware for the system. As many units as necessary can be placed on the microgrid, whether they're residential or commercial. Asali communicates wirelessly to Honeycomb, the company's cloud-based software platform, about equipment performance, energy consumption, pricing data, load balancing, and which locations in the microgrid to prioritize if there's an emergency. Honeycomb then manages accounts and monitors field support and performance in real-time.

"One of the problems with microgrids historically is that there would be a problem, the power would go out, and nobody would know about it for days," Boucher said. "There were all kinds of communication errors. [But] because our microgrids are connected to network and sensors, if there's any problem, it automatically notifies someone in the business."

The homes and businesses are outfitted with outlets and chargers. Customers pay an upfront connection fee, which is dependent on their location, what will make them commit, and what they are capable of paying. There are several service levels as to make it affordable for the poorest in the communities to at least get a couple of lights and a home charger, Boucher said. The higher service levels allow people to take advantage of mechanical power or appliances like refrigerators.

Powerhive works with project developers, energy providers, and government authorities, depending on the market, that license the software and use the Asali meters, so the company doesn't need a local office to operate all over the world, though they do offer consulting and advisory services to customers and partners.

"We are basically just a tech company and they're using [it]," Boucher said.

Other issues with microgrids have always been energy theft, or one customer using too much electricity and knocking the entire grid offline. Powerhive solves those problems with its network of sensors, which monitors how much energy is supposed to be generated versus how much is being delivered and paid for. For most other microgrid systems, someone individually visits all customers to check on payments, leading to inconsistent power and failed payments. With Honeycomb, Powerhive can limit consumption or remotely shut off the circuit if demand is exceeding supply.

The reason Powerhive is so successful is because it relies on mobile payments -- specifically, M-Pesa, which is Kenya's primary payment system. Customers pay with their phones and can also communicate with Powerhive using their phone if they have a complaint or problem by texting or calling the local field office.

Contrary to popular belief, the biggest limiting factor for Powerhive has not been customers being able to afford the service. It's raising capital in the US.

"Africa has always been seen as a scary place to invest," Boucher said.

Now that they've proven the model, it's becoming much easier to find money from investors, and Powerhive is looking to expand its markets and find other partners.

Boucher said that after the first pilot programs, village leaders from all over the region in Kenya contacted Powerhive, asking for microgrids in their communities. Dominic Ratemo Ondieki, who lives in Kenya, was a customer for one of the pilot projects, and expressed how it changed his life.

"Before signing up for Powerhive, I was a casual laborer. I earned enough to get along, but it was difficult," he said. "When Powerhive came to our village, I started a business operating a posho mill, which has increased my daily income to 450 KES. I now have enough money to pay my children's tuition. I hope Powerhive comes to other villages in Kenya so that more people can benefit."

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