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Solar power can change one's life.

Poor people are not impecunious!

Why statistics about kerosene prices have no relevance for sale of solar energy.

The widespread and recognised method of establishing whether and to what extent people in rural areas are able to purchase solar products is the comparison with the existing costs for kerosene. This method satisfies Western project planners, controllers and investors, but it has one great disadvantage: It is unsuitable. At this point we can ignore whether the established figures are actually correct. Much more important is the fact that this method does not take into consideration the most decisive element for the development and evaluation of a market: The presence of a need and the motivation to buy which results from this need.

Comparison with mobile phone market

A comparison with another product might help to make this clearer. If we look at the statistics to find out how much money the people in rural areas spend on traditional methods of transmitting news (post or word of mouth), you would hardly say they have enough capital for purchasing and using a mobile phone. Conversely, this should mean that there is no market for mobile phones. 

The fact is, however, that today in even the remotest corners of Africa a mobile phone will be bought as soon as the signal is strong enough. On the other hand, the statistics "prove" that the people there cannot possibly afford to buy one!

The objection that this comparison is not valid because the alternatives (the post or word of mouth) are no alternatives to the mobile phone is not correct. The alternative to solar light - the kerosene lamp - is also no real alternative because instead of offering an effective light it produces just smoke and illnesses. From the point of view of need and the resulting motivation to purchase, solar technology has the same power of persuasion as the mobile phone in comparison to the post.

This means that statistics concerning expenditure on kerosene and batteries in rural areas may provide us with some interesting data, but they are irrelevant when determining whether there is a market for solar products or not. The answer to this question is to be found elsewhere. 

Why people buy a solar product? It changes the whole life!

In developed countries a need for many products has to be suggested by advertising. In the case of solar technology it is the complete opposite: There is no need for advertising because the need - and the purchasing power - are already there.

But where does the money, the purchasing power to buy solar products, come from? The possibilities are as varied as the people themselves: It may come from simply saving, from efforts to find additional sources of income or the numerous possibilities of redeploying one's own personal financial budget. 

A prerequisite is, however, that the required solar product is available for purchase. Here are two examples from practical experience.

Example 1

When farmers have brought in the harvest and sold it on the market, they have a large sum of money in their pockets. As there are no products which one could acquire locally, the money is frequently used in the following way: The money needed for daily life until the next harvest is put to one side. The men go into the next biggest town and squander the rest or buy what they consider to be useful and happens to be available. The possibility we created to purchase solar products with the harvest money fundamentally changed the consumer behaviour of these farmers. Instead of using the money for pleasure, it was invested in solar light, solar televisions , solar refrigerators and other solar-powered products. Smaller products were paid for in cash and larger objects acquired by taking advantage of financing facilities. According to the statistics, however, this should not have been possible...

Example 2

A tailor living in one rural village had a great wish. He wanted to be able to replace his dilapidated hut with a more stable one made of mud one day. The solar light enabled him not only to work longer, but, above all, more efficiently because in the evening it was less hot and he could concentrate better. On account of his higher income he lives today in a new sturdy mud hut. His next wish is to buy a small solar refrigerator to keep his food fresh in.

Beside all statistics: Poor people are not impecunious

It is important to recognise that the people in rural areas are not only in a position to pay for solar products, but are also willing to. The reason is a motivation which is typical for markets worldwide: The feeling that it is necessary to own a product because it would change one's life for the better.

The advantages of solar light compared with the kerosene lamp are as great as those of the mobile phone in comparison with word of mouth communication. Accordingly, as soon as solar light becomes available, the need for the product sparks the effort to own it.

The time has come for in "developed world" to readjust our images of the rural regions and the people who live there so that they correspond with reality.