A Boyd said 'let there be light'
By Chris Rodley
Like most Australians, Boyd Whalan had spent his life with electric light usually available at the flick of a switch. Then in 2010, he travelled to Ghana for a volunteering holiday and saw first-hand how the safe, reliable light he took for granted was still an unattainable luxury for many. His experiences during that six-week trip not only changed him, they might one day change the lives of some of the world’s poorest people.
The 23-year-old had flown to Ghana to work for the non-profit organisation Energy in Common, which was co-founded by his brother and fellow University of Sydney graduate Hugh Whalan. As a microfinance lender, the NGO provides small loans to entrepreneurs in developing countries so they can buy renewable energy technology such as solar-powered LED lanterns.
During his stay, Boyd criss-crossed the country and encountered dozens of people who were gaining access to clean, dependable lighting for the first time. In a small town in Ghana’s eastern region, he met a nurse who had struggled for three years to run her medical clinic by the light of smoky lamps made from kerosene cans before acquiring a solar-powered lantern.
"It was very obvious how it improves people’s lives."
In the capital city, Accra, he met a shopkeeper who would have to close her convenience store during the city’s frequent blackouts until she took delivery of an LED light. And in a mud-hut village in the country’s Volta region, he saw how solar-powered lanterns were helping to transform a whole community by making it easier to see, work and socialise after dark.
“It was very obvious how it improves people’s lives,” says Boyd. “The light would be in a communal area and there would be five or six families gathered around it. Fifty metres away there would be a campfire and the quality of light from it was not even comparable.”
But as he travelled through Ghana’s rural areas, often on the back of a loan officer’s motorbike, it became obvious to Boyd that solar-powered lighting remained out of reach for those who needed it most: the millions of subsistence farmers living off the electricity grid.
The vast majority could not afford the upfront cost of solar technology or commit to monthly repayments, since their incomes were unpredictable and dependent on the harvest of their cash crops. Issuing a loan to these customers was also prohibitively expensive for the microfinance organisation, which had to send loan officers across vast distances to collect tiny repayments. As a result, they remained trapped in a cycle of energy poverty, paying as much $3 per week for kerosene out of a weekly budget of $7.
When he returned to Australia, Boyd discussed the problem with his friend and fellow student Dan Wilson, 25. Together, they came up with a simple yet ingenious solution: a pay-as-you-go solar lighting system for “bottom of the pyramid” consumers. Under Boyd and Dan’s system, people would not need to pay upfront or make regular repayments. Instead, they would receive a solar lighting system and be able to top it up to access more light when they can could afford it, using their mobile phone. After they had paid off the full cost of the unit, it would be free to use from then on.
Once they had developed their idea, the pair faced the considerable challenge of bringing it to market. Neither comes from a business background: Boyd had majored in Chinese and political economy while Dan is a PhD candidate in aeronautical engineering. So they joined forces with three other students and entered the Sydney Genesis competition, an entrepreneurship challenge run by the University which provides mentoring and support for new ideas.
Boyd is upbeat about the potential for success. As he explains, the Hessex solar lighting system has one stand-out feature that should make it particularly attractive to customers: its repayment cost will be slightly less than the cost of traditional kerosene lighting. “This is the next generation of microfinance,” he explains. “In traditional microfinance you give people a loan and they are battling to repay it, but in this model, they are not spending any more money on it.” Then, once the unit is paid off after 12 to 18 months, users are free from the cycle of buying costly lighting fuel.
A social business
After winning in the Best Social Startup category, the team went on to write up a detailed business plan and entered it in the 2012 CEMS Global Social Business Plan Competition. In May last year, they won the prestigious contest beating entrants from over 15 countries.
With their cash prize of 2, 500 euros, Boyd and Dan were able to launch their start-up, Hessex, and create a working prototype: a numeric keypad that unlocks when a code is entered, connected to an off-the-shelf LED array, photovoltaic panel and rechargeable battery. Since then, they have been working with a Chinese manufacturer to finesse the design with a view to making an initial order of 100 solar systems. They aim to test them out in a four-month pilot scheme in Ghana, which is set to commence in May.
"The system will improve users’ health by reducing the burning of fuel indoors. It will also help to curb greenhouse gas emissions from fuel-based lighting."
That is just one of many possible benefits. The system will improve users’ health by reducing the burning of fuel indoors; around two million people around the world die annually as a result of the indoor air pollution, which causes conditions such as chronic obstructive pulmonary disease and lung cancer. The renewable energy technology will also help to curb greenhouse gas emissions from fuel-based lighting, which releases around 190 megatonnes of carbon dioxide into the atmosphere each year.
And It is also likely to improve lives in ways that are hard to measure. The LED array is brighter and more consistent than fuel-based alternatives, does not fog up over time like kerosene lamps, and does not require users to collect wood or stoke fires into the night. “This is an aspirational product,” says Boyd. “If the chief of the village gets it, everyone can see how good it is and wants it, too. It is free marketing for us.”
Despite its potential to change lives, Boyd and Dan emphasise that Hessex is not a charity but a commercial operation. “We’re a social business and we need to balance profit and the humanitarian side,” he says. “We came to the decision that being for-profit allows us to reach scale faster, and is more sustainable.” Hessex will make money by charging customers a price that covers the cost of the unit and includes a small margin for the company. In the future, it may also be able to earn carbon credits for the kerosene use that is being offset.
Should their pilot program be successful, the duo want to roll out the solar lighting system in West Africa and perhaps also license it for use by international partners in other locations such as India. The huge potential size of their market is what excites them most of all, says Dan: “If this works, the number of lives that could be changed in the world is pretty incredible.”