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Rent to own solar systems hope to prevent blackouts in Nepal’s hospitals

 

Bayalpata Hospital, Nepal

Bayalpata Hospital Nepal. Nepal has over 6,000 health clinics and hospitals, and every single one of them has problems with energy. Photograph: Possible

 

Powered by Guardian.co.ukThis article titled “Rent to own solar systems hope to prevent blackouts in Nepal’s hospitals” was written by Oliver Balch, for theguardian.com on Monday 18th August 2014 06.00 UTC

Imagine giving birth at night and the lights in the hospital suddenly go out. Or, worse, picture yourself struggling for life on an oxygen machine, only for the hospital to face a power blackout. Such scenarios are part of every day life in Nepal’s rural areas, where daily power cuts can easily last nine hours or more, according to Andy Moon, co-founder of SunFarmer, a development-oriented solar energy provider.

“Nepal has over 6,000 health clinics and hospitals, and every single one of them has problems with energy”, says 29-year-old Stanford economics graduate Moon, who previously worked for McKinsey Consulting and US solar energy firm, SunEdison.

Together with former SunEdison colleague Jason Gray, Moon set up SunFarmer last year with the goal of enabling health facilities to “rent-to-own” affordable solar systems. The organisation’s funding model sees the up-front installation costs split 80% to 20% between SunFarmer and the local health facility.

The health clinic or hospital then pays SunFarmer back in monthly installments over an eight year-period. The solar provider has committed to plough all profits back into financing future solar energy systems. Interest on the repayments is “nominal” when the loan is in US dollars, and adjusted for inflation when in local currency.

The solar start-up installed its first renewably-powered electricity systems in six health clinics in western Nepal last month. Each system costs between $8,000 and $9,000 and has a generating capacity of roughly 1.6 kilowatts. As a result, the participating health facilities are able to reduce their reliance on diesel-powered generators, which are expensive to run and damaging to the environment.

“Our systems will provide power for more than just lights. We can provide power for laptops and cell phone charging, but also for medical equipment such as oxygen machines, suction machines, nebulisers and vaccine machines”, Moon states.

Bayalpata Hospital, Nepal

The neonatal care unit at the Bayalpata Hospital in Nepal. Photograph: Possible

SunFarmer hopes to install up to 20 new systems by early next year and over 250 around the world within the next five years. It is currently looking to raise a $5m fund – 25% of which is already banked. The solar provider’s early investors include Canadian social impact investment group MaRS and SunEdison’s charitable foundation. A two-month campaign on crowdfunding site Indiegogo saw it raise $25,000 earlier this year.

“We’re not just a financing provider”, Moon insists. “We oversee the complete design and installation of the system to make sure the system is installed with all the right components.”

The repayment approach gives SunFarmer an added incentive to ensure that the systems remain in good working order, he adds. The company has installed monitoring equipment that allows its engineers in Kathmandu to evaluate the power output of each system in real time. “If there’s any problem, we can send people out there to fix it”, says Moon.

The ‘rent-to-own’ model differs from traditional philanthropic approaches, which see solar equipment donated but then either poorly installed or badly maintained. The result is “a lot of broken solar systems” across the developing world, Moon notes. SunFarmer is also working to build the sustainability of Nepal’s nascent solar industry by establishing cooperation partnerships with domestic solar providers.

“We want to enable the local solar ecosystem, so we partner with three local solar companies. Instead of competing against them, we provide financing and the technical assistance … to enable them to install bigger systems that they weren’t able to do before”, says Moon.

 

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