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| | = Overview = | | = Overview = |
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| | '''Figure: PAYGO for customers step-by-step''' | | '''Figure: PAYGO for customers step-by-step''' |
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| − | [[File:Winiecke 2017 How Paygo solar works.PNG|center|700pxpx|How Paygo solar works]]Source: Winiecki et al. 2017.<ref name="Winiecki, Jacob, Michelle Hassan, and David del Ser. ‘Briefing Note PAYGo Solar: Lighting the Way for Flexible Financing and Services’. FIBR, mastercard foundation, BFA, 2017. https://www.gogla.org/sites/default/files/resource_docs/finalfibrbriefingnotepaygosolarjuly2017.pdf.">Winiecki, Jacob, Michelle Hassan, and David del Ser. ‘Briefing Note PAYGo Solar: Lighting the Way for Flexible Financing and Services’. FIBR, mastercard foundation, BFA, 2017. https://www.gogla.org/sites/default/files/resource_docs/finalfibrbriefingnotepaygosolarjuly2017.pdf.</ref> | + | [[File:Winiecke 2017 How Paygo solar works.PNG|center|700px|How Paygo solar works|alt=How Paygo solar works]]Source: Winiecki et al. 2017.<ref name="Winiecki, Jacob, Michelle Hassan, and David del Ser. ‘Briefing Note PAYGo Solar: Lighting the Way for Flexible Financing and Services’. FIBR, mastercard foundation, BFA, 2017. https://www.gogla.org/sites/default/files/resource_docs/finalfibrbriefingnotepaygosolarjuly2017.pdf.">Winiecki, Jacob, Michelle Hassan, and David del Ser. ‘Briefing Note PAYGo Solar: Lighting the Way for Flexible Financing and Services’. FIBR, mastercard foundation, BFA, 2017. https://www.gogla.org/sites/default/files/resource_docs/finalfibrbriefingnotepaygosolarjuly2017.pdf.</ref> |
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| | Examples: | | Examples: |
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| | *Ugandan Mobile Pay-Go Solar Provider Fenix International doubled the number of customers in the year 2016 to 100,000. Fenix deploys solar leases of over USD 20 million. Fenix’s ReadyPay Power high-efficiency solar products and services worth 1.2-MWs serve over 600,000 Ugandan households.<ref name="Andrew Burger, ‘Uganda Mobile Pay-Go Solar Provider Doubles Customer Base to 100,000 in 12 Months’, Microgrid Media, 25 January 2017, http://microgridmedia.com/uganda-mobile-pay-go-solar-provider-doubles-customer-base-100000-12-months/.">Andrew Burger, ‘Uganda Mobile Pay-Go Solar Provider Doubles Customer Base to 100,000 in 12 Months’, Microgrid Media, 25 January 2017, http://microgridmedia.com/uganda-mobile-pay-go-solar-provider-doubles-customer-base-100000-12-months/.</ref><ref name="Allegra Fisher, ‘Pay-to-Own Solar Energy System Doubles Off-Grid Customer Base in Just 12 Months’, Fenix International, 22 January 2017, http://www.fenixintl.com/2017/01/22/pay-to-own-solar-energy-system-doubles-off-grid-customer-base-in-just-12-months/.">Allegra Fisher, ‘Pay-to-Own Solar Energy System Doubles Off-Grid Customer Base in Just 12 Months’, Fenix International, 22 January 2017, http://www.fenixintl.com/2017/01/22/pay-to-own-solar-energy-system-doubles-off-grid-customer-base-in-just-12-months/.</ref> | | *Ugandan Mobile Pay-Go Solar Provider Fenix International doubled the number of customers in the year 2016 to 100,000. Fenix deploys solar leases of over USD 20 million. Fenix’s ReadyPay Power high-efficiency solar products and services worth 1.2-MWs serve over 600,000 Ugandan households.<ref name="Andrew Burger, ‘Uganda Mobile Pay-Go Solar Provider Doubles Customer Base to 100,000 in 12 Months’, Microgrid Media, 25 January 2017, http://microgridmedia.com/uganda-mobile-pay-go-solar-provider-doubles-customer-base-100000-12-months/.">Andrew Burger, ‘Uganda Mobile Pay-Go Solar Provider Doubles Customer Base to 100,000 in 12 Months’, Microgrid Media, 25 January 2017, http://microgridmedia.com/uganda-mobile-pay-go-solar-provider-doubles-customer-base-100000-12-months/.</ref><ref name="Allegra Fisher, ‘Pay-to-Own Solar Energy System Doubles Off-Grid Customer Base in Just 12 Months’, Fenix International, 22 January 2017, http://www.fenixintl.com/2017/01/22/pay-to-own-solar-energy-system-doubles-off-grid-customer-base-in-just-12-months/.">Allegra Fisher, ‘Pay-to-Own Solar Energy System Doubles Off-Grid Customer Base in Just 12 Months’, Fenix International, 22 January 2017, http://www.fenixintl.com/2017/01/22/pay-to-own-solar-energy-system-doubles-off-grid-customer-base-in-just-12-months/.</ref> |
| | *Power Mundo in Peru is successfully implementing PAYG projects with support from ADB and others. The main aim of the project is to develop a distribution network for efficient, low cost off-grid picoPV and SHS energy products that residents in rural Peru can afford while at the same time creating local employment opportunities that can raise residents’ incomes.<ref name="Andrew Burger, ‘Off-Grid Solar Start-Ups Pierce the ¨Heart of Darkness¨’, Microgrid Media, 8 December 2016, http://microgridmedia.com/off-grid-solar-start-ups-pierce-%c2%a8heart-darkness%c2%a8/.">Andrew Burger, ‘Off-Grid Solar Start-Ups Pierce the ¨Heart of Darkness¨’, Microgrid Media, 8 December 2016, http://microgridmedia.com/off-grid-solar-start-ups-pierce-%c2%a8heart-darkness%c2%a8/.</ref> | | *Power Mundo in Peru is successfully implementing PAYG projects with support from ADB and others. The main aim of the project is to develop a distribution network for efficient, low cost off-grid picoPV and SHS energy products that residents in rural Peru can afford while at the same time creating local employment opportunities that can raise residents’ incomes.<ref name="Andrew Burger, ‘Off-Grid Solar Start-Ups Pierce the ¨Heart of Darkness¨’, Microgrid Media, 8 December 2016, http://microgridmedia.com/off-grid-solar-start-ups-pierce-%c2%a8heart-darkness%c2%a8/.">Andrew Burger, ‘Off-Grid Solar Start-Ups Pierce the ¨Heart of Darkness¨’, Microgrid Media, 8 December 2016, http://microgridmedia.com/off-grid-solar-start-ups-pierce-%c2%a8heart-darkness%c2%a8/.</ref> |
| | + | *In Kenya, [https://hapakenya.com/2020/01/14/safaricom-partners-with-m-gas-to-offer-prepaid-cooking-gas/ PAYG is also offered for cooking gas by M-Gas] - people do not have to buy the cooking gas cylinder or burners which often costs more than KES 6,000 and refilling a cylinder costs above KES 2,000 per cylinder. With this approach, the company provides a cylinder with a smart metering and people only use the cooking gas that they need. |
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| | = Conclusion = | | = Conclusion = |
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| | This article offers a definition for PAYGO approaches and shortly explains how it works with examples from the major companies. | | This article offers a definition for PAYGO approaches and shortly explains how it works with examples from the major companies. |
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| − | | + | <br/> |
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| | = Further Information<br/> = | | = Further Information<br/> = |
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| | *[[Advantages and Disadvantages of PAYGO Approaches|Advantages and Disadvantages of PAYGO Approaches]] | | *[[Advantages and Disadvantages of PAYGO Approaches|Advantages and Disadvantages of PAYGO Approaches]] |
| | *[[PAYGO Approaches: Overhyped or Justified|PAYGO Approaches: Overhyped or Justified]]<br/> | | *[[PAYGO Approaches: Overhyped or Justified|PAYGO Approaches: Overhyped or Justified]]<br/> |
| − | *[[Role_of_Supporting_Environment_in_Fostering_Pay-as-you-go_Approaches_(PAYGO)|Role of Supporting Environment in Fostering Pay-as-you-go Approaches (PAYGO)]] | + | *[[Role of Supporting Environment in Fostering Pay-as-you-go Approaches (PAYGO)|Role of Supporting Environment in Fostering Pay-as-you-go Approaches (PAYGO)]] |
| | *[[Fee-For-Service or Pay-As-You-Go Concepts for Photovoltaic Systems|Fee-For-Service or PAYGO for PV systemsincluding]] information about the major PAYGO companies<br/> | | *[[Fee-For-Service or Pay-As-You-Go Concepts for Photovoltaic Systems|Fee-For-Service or PAYGO for PV systemsincluding]] information about the major PAYGO companies<br/> |
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| | *Winiecki, Jacob, and Kabir Kumar. ‘Access to Energy via Digital Finance: Overview of Models and Prospects for Innovation’. Consultative Group to Assist the Poor (CGAP), Washington, DC, USA, 2014. [http://www.fgda.org/dati/ContentManager/files/Documenti_microfinanza/Access-to-Energy-via-Digital-Finance.pdf Link]. | | *Winiecki, Jacob, and Kabir Kumar. ‘Access to Energy via Digital Finance: Overview of Models and Prospects for Innovation’. Consultative Group to Assist the Poor (CGAP), Washington, DC, USA, 2014. [http://www.fgda.org/dati/ContentManager/files/Documenti_microfinanza/Access-to-Energy-via-Digital-Finance.pdf Link]. |
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| | = References = | | = References = |
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| | <references /> | | <references /> |
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| − | [[Category:Financing_Solar]]
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| − | [[Category:Solar]]
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| − | [[Category:Financing_and_Funding]]
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| | [[Category:Off-grid]] | | [[Category:Off-grid]] |
| | + | [[Category:Financing_and_Funding]] |
| | + | [[Category:Solar]] |
| | + | [[Category:Financing_Solar]] |
Pay-as-you-go (PAYGO): Companies sell solar services or the solar products through a pre-paid model (in small instalments) to persons that can afford these services and become potential or actual customers. This article explains briefly how PAYGO works for customers and for the companies that offer this service.
Pay-as-you-go (PAYGO) is a digital financing technology that allows end-users to digitally pay for solar energy in weekly instalments. PAYGO is a pioneering, game-changing digital credit system that removes the initial financial barrier to solar energy access by allowing consumers to make a series of modest payments to purchase a week’s worth of solar energy rather than paying upfront for the entire solar lighting system.[1]
PAYGO is emerging as a solution that addresses both end-customer affordability and provides sufficient margins to fuel operational models that can scale.[2]
The first PAYGO companies are vertically integrated companies (one-stop-shops). They do all steps: [4]
While most of them have competencies in 3-4 areas, financing became a challenge for them. Expanding and scaling is hampered by two factors: As there are no financial intermediaries, currency risks are an obstacle to growth; and as customers pay within years, working capital is limited. [4]
As a recent development, more mirco financing insitutions enter the market. See Market Overview: Disaggregating the PAYGO value chain.
They use enforcement mechanisms like remote GSM connections and keypad verification.[3] Because most of them use mobile payments, PAYGO is cheaper than traditional microfinance options.
In the energy access sector, PAYGO approaches are mostly used to sell picoPV and SHS solar products, but also mini-grids can be operated implementing a PAYGO tariff. [5]
Source: Winiecki et al. 2017.
This article offers a definition for PAYGO approaches and shortly explains how it works with examples from the major companies.
