Photo: GSMA Mobile for Development (M4D) Utilities
Distributed solar industry eyes India as next “pay-as-you-go” giant
December 21, 2017
Many hurdles remain, including low consumer awareness, lack of mobile money and a fragmented telecom industry, but Anna Wells, senior communications adviser at GOGLA, reports that momentum is growing heading into 2018
Pay-as-you-go (“PAYG” or “paygo”) is a way for energy consumers to purchase products or services in small increments. PAYG solar home solutions have exploded in rural Africa in recent years, with a diverse set of business models, including: rental, ‘lease-to-own’ (when customers pay small amounts until they own a system fully), upfront sales with financing partners and direct cash sales.
With 300 million people in India still without electricity, industry leaders met recently in Mumbai at an event co-organized by GOGLA, IFC Lighting Asia / India and GSMA, to explore opportunities. Participants included PAYG and distribution companies, mobile wallet companies, and digital finance solutions (or DFS) providers.
Current landscape for PAYG in India
India is a cash-based economy and, unlike the African market, mobile money is not yet widely used. There is huge potential for a PAYG market in India and this approach has several key benefits: it increases the affordability for the customer, it provides companies with a direct link to their customers, and allows up-selling and cross-selling of various products to the same customer to help them climb the energy staircase. PAYG also provides some degree of insurance to the customer against faulty products.