The aim of the challenge is to understand how might we make Pay As You Go (PAYG) more attractive as a business model for the supplier of solar appliances to adopt.
Problem: PAYG is a more accessible financial system, particularly for those at the bottom of the pyramid in developing nations to gain access to solar. However, PAYG or service model provides a double disincentive to the supplier to make his product compatible with everyone else’s (time delay and expense of certification, and facilitating a black market in his assets) – this therefore leads to a lack of quality and reliability, and poor economies of scale in manufacture, all to the detriment of the environment. How might we make PAYG more attractive as a business model for the supplier of solar appliances to adopt, allowing access to solar and benefitting the environment through enhanced stardardisation?
[bonus questions]: How can we incentivise the service provider to put his products through the expensive and time-consuming process of gaining type approval and quality assurance approval? What should these standards look like, something the industry agrees is badly needed but who will put the resources in to develop?
Vision: an equitable and accessible solar energy appliances market, with increased standardisation promoting uptake, higher utilisation, economies of scale and less waste.
Current state: A scorecard for the two business models for supplying domestic appliances for use with Solar Home Systems – outright purchase and PAYG has been created (attached):
Business model.pdf (479.4 KB)
The spreadsheet provided lists some of the arguments for and against Outright Purchase as compared to Pay-As-You-Go. In this example for Solar Home Systems going to Africa – when viewed from the point of view of the Consumer, the Supplier and the Environment. The initial analysis shows PAYG is a significantly better model for the environment than outright purchase. However, for an investor seeking to quickly turn a small amount of money into a large amount, Outright Purchase delivers a better return.
Challenge aim: Considering each of the issues listed on the spreadsheet in turn – particularly those with a red mark for the Supplier – how might we make PAYG more attractive as a business model for the Supplier to adopt?”
Output: a well documented set of comments on how to make the PAYG business model more attractive. If appropriate, an updated spreadsheet
Notes to be kept here: https://pad.oscedays.org/p/Cambridge_2016_Challenge_2
Feel free to attach an updated spreadsheet (ideally open source format!)