Bringing Scale to Energy Access – Okra Solar Makes the new 50 to Watch List

In the face of the climate crisis, we are seeing a new generation of innovators rising to the task and developing high-impact solutions to tackle the world’s most pressing challenges. These entrepreneurs are creating new technologies and business models that could change every aspect of how we live – from what we eat to how we consume, from how we build our homes to our relationship with Nature. After a decade of success with our Global Cleantech 100, we are launching 50 to Watch, an annual program built to surface and honor these early-stage companies that are fighting the good fight.

We are thrilled to announce that Okra Solar has made our inaugural 50 to Watch list. Okra allows utilities in developing countries to deploy distributed generation at scale. We talked to Afnan Hannan, its founder and CEO, to hear more.

An Interview with Afnan Hannan, Founder and CEO of Okra Solar

Cleantech Group: What global challenge made you want to start Okra Solar?

Afnan: We are living in a world of massive inequality on one side and unlimited opportunity on the other, with access to technology, which democratises opportunities around the world. However, there are still one billion people without electricity. So the first step to creating a more equal world is to allow people to access to electricity. This electricity has to be clean, and it needs to be delivered in a profitable way. At Okra, we create the technology  and business models to allow utilities in emerging markets to offer clean, reliable, affordable and off-grid electricity to those who can’t be connected to the grid.

And for us this is just the beginning, as electricity gives people access to a number of opportunities. But that will come later.

Cleantech Group: Did you start with a geographical target in mind?

Afnan: No, we started with the start-up perspective of not creating a solution before you fully understand the problem. I understood the bigger picture, and that I wanted to work toward energy access. But I could not sit in Australia and develop technology for people in Kenya or Tanzania.

So I sent emails to about 110 energy companies around the world, asking them if I could volunteer to help with my engineering expertise. I wanted to get exposure to how they were getting power to rural communities, their supply chain, operations, payment collection, main challenges etc. A couple of companies from Cambodia, one being NRG solutions, invited me to come along. So I moved to Cambodia three years ago to learn what all these pain points were. And that’s how we started product development.

 

Cleantech Group: Could you tell us what you observed then, and what solution it led you to design?

Afnan: Once we got in Cambodia, it exploded, I went from talking to one solar company to talking to all of them, the regulator and NGOs. I started to become aware of what the problems were.

Talking to the local utilities taught us a lot about remote off-grid areas. While all the data says that solar panels and batteries are much cheaper than grid extensions, they were able to show us that designing the distribution system, managing it and maintaining it are massive challenges. Collecting payments is also tricky, as in some cases the cost of collection is larger than the actual payment.

Coming from a background of IoT and energy systems, my co-founder and I thought that these are probably problems we can solve using software and automation. So we prototyped this IoT controller and demonstrated it to the utilities. It basically automates distribution in a mesh network, meaning you don’t need inverters. No inverters means no need for engineers to set up the microgrid.

Second, because there is a device on every house, you can monitor individual maintenance needs and notify the utilities instantly, as well as the household, and customers can self-maintain.

Finally, payment collection is all done through mobile money, so investors in the network have a digital stream of paybacks. Customers who don’t pay get temporarily cut off.

Long story short, we built this solution for utilities to set up autonomous microgrids with digital cash-flows to make the investments more bankable.

Cleantech Group: Can you explain why using mesh networks cuts the need for inverters?

Afnan: With a traditional microgrid, you have some power loss on the way from the asset to the loads. To mitigate this loss the inverter converts the power from 12V DC to 240V AC. But this inverter is not modular, it is sized for a certain capacity. For this system to work you need to calculate the load of each household and this requires engineers and survey data. The inverter itself also adds cost.

In a mesh network, every household has panels and a battery connected in a mesh network, so power doesn’t need to travel that far, you don’t need to boost it to 240V AC. Instead we use software to boost to 50V DC to push it across the line. By doing this modular DC network you can add capacity in small increments, which leads to more flexible grids where load growth can quickly reach 2000% within six months, getting from light to refrigeration.

This solution is sold to the utility, which owns the network. No matter what the utilities do, houses will increase load in an unpredictable way at the start. As this is a utility solution, the utility owns the network, they get notified if it gets overloaded. This is communicated in blackout hours per household. So for example, if the utility gets notified that a community will get 250 blackout hours in a week, they will go install more capacity.

Cleantech Group: Are the generation assets at household or utility level?

Afnan: Each household has panels and batteries, but the utility owns the asset. If a house doesn’t pay, that house get cuts off while the rest of the community can still benefit from their panel and battery.

The model will eventually allow households to own the panels and enable peer-to-peer trading. But many users prefer to have access to a simple energy plan, and the communities we spoke were quite reluctant to engage in peer-to-peer. So one step at a time.

Cleantech Group: How do you quantify the impact of your microgrid?

Afnan: We are replacing diesel fuel. Communities we work with in Cambodia were using car batteries, travelling on a boat – which runs on diesel – to charge them with diesel generators. In the Philippines, they import diesel on the island and run generators with poor efficiency for four hours a day for lighting and fans. We replace it with 24-hour access to lighting, fans, television, mobile-phone charging, all with clean electricity.

We have tracked data on how much energy households consumed and use the diesel CO2 coefficient. They are spending between $100 and $200 a month on diesel fuel, without taking into account travel time, effort and cost. With the Okra mesh network they pay the same or cheaper, the utility makes less than a five-year payback, they have more power for their money and less time spent on charging batteries or importing fuel.

Cleantech Group: What do users hope to do with their new access to power?

Afnan: People want to do everything! Use washing machines and wash clothes for their neighbors. They want to freeze ice to preserve fish in fishing communities. People are already growing cricket incubators, using the waste heat from the network.

People used to sleep in the daytime because it was so hot, now they can run fans and all sit together. Some people are repairing fishing nets. In some rural villages, they play music so loud it shakes your heart! I’m very excited about access to digital education, for instance, or providing finance for appliances.

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Cleantech Group: How many houses have been deployed?

Adnan: We have Just finished our proof of concept phase, with five villages in Cambodia, one in the Philippines and one in Indonesia. We have 126 households connected as of today and 160 by the end of the week. In Cambodia, they are all owned by one private company. In the Philippines, they are owned by one SPV backed by an infrastructure fund which plans to deploy to 8,000 households in the next year. Indonesia is a pilot with ten households.

Following the Cambodia pilot, the Cambodian electricity regulator will be assessing pilots to see if they meet the standards for electrification. If this is the case, private operators will be able to roll out our system more broadly with government subsidies

To put that in context there is currently 1.5 million people in Cambodia living without electricity. In the Philippines, it’s ten million people of which five million have been classified as “unviable”, where grid extension isn’t an option.  In Indonesia, we estimate ten million people are in unviable areas as well.

Cleantech Group: Why didn’t you go for a lease-to-own model?

Afnan:The technical answer is that we don’t perceive Okra being a solar home system. It can operate as such, but the connection between the houses is where the reliability comes from. It’s about getting charged for power, not owning a generation asset.

On the other hand, this means we are regulated as an energy provider, not just an asset vendor. You need the local utilities to be involved and to fully back you to reach millions of households, which is our goal.

Cleantech Group: Could you tell more about your business model?

Afnan: We want to power the distribution channel that’s most adept, that has low cost, speaks the local language and has local tentacles to get it done. This means working with the local license holder. We need to make sure they are incentivized to do the work.

We create a private investment vehicle with investors, debt, and some of the local utility’s money. The SPV pays for all the capex, financing of productive appliances. It pays the local utility to find the sites, install the hardware and operate the microgrid. Households pay for energy on an ongoing basis, which pays the investors back digitally through a smart contract. The software cuts access when the households don’t pay, and similarly it penalizes utilities if they don’t complete the maintenance.

So far, this business model is working well. Households are paying their bills and utilities are completing the maintenance. Going from 120 households to 8,000 in the next phase will be the real test, with less hands-on support from us.

Cleantech Group: Is there something along the way that almost made you quit?

Afnan: No! We’re always looking at what is or isn’t working, seeing if we should pivot. But no, I will never give up on trying to solve energy access in a scalable way.

There have been some hairy times, with no more runway, when we wanted to help our employees find other jobs, but no one wanted to leave the ship, and they even worked harder during these times. We unlocked some funding right after that.

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