Global Cleantech 100 Company Profile – SOLshare

The Global Cleantech 100 is an annual list of the most innovative companies poised to make a significant commercial impact in the next five-to-ten years. On the list, you’ll find the most promising ideas in cleantech – the ones best positioned to help us build a more resource-efficient, decarbonized and digitized future. SOLshare made the list in both 2019 and 2020 and we talked to Sebastian Groh, SOLshare’s Managing Director, about solving problems now and in the future.

1) What inspired the creation of  SOLshare?

“There’s $1 billion of excess energy value lying dormant in the mud roads of rural Bangladesh. The country has set the world record in the dissemination of solar home systems with an installation base of 6 million systems. This is an incredible accomplishment for the government of Bangladesh, IDCOL and many partner organizations, such as Grameen Shakti. At SOLshare, we looked a little more closely at this success and found that about 30% of the energy produced by all those solar PV systems goes completely unused because the batteries are full and yet the sun is still shining. The idea, in part, results from our founder’s PhD research work in 2014. Since neither bigger nor additional batteries were a good option, we suggested  interconnecting them to form a grid. ”

2) What is the most significant issue you see for the 2020’s?

“While there is increasing convergence in opinions that were previously polarized, climate change has always been a topic people have had difficulty grappling with. But I am not sure whether we all have the same sense of urgency. We don’t need promises anymore, we need action now.  Climate change has become a cultural issue where people even take offense in just being challenged to renounce their age-old beliefs. I hope that instead of promises we will see action. COVID-19 could open the floodgates for the #BuildBackBetter banner, but there is also a threat that the momentum that was mounting to address climate change gets lost. COVID-19 will drag on and it is critical now that the momentum returns  even stronger and demands more action.

As for the energy sector, I expect that the megatrends which are often referred to as the five D’s -Decentralization, Decarbonization, Digitization, Democratization and Disruption- will hit hard for the first time in more and more countries. They will fuel the future of energy in the 2020s, which is where we are trying to play our part as a pioneer. Moreover, COVID-19 has reversed certain trends in many countries, such as migration. Look at Bangladesh. A lot of overseas workers are coming back, but don’t stay in Dhaka. Instead they return to their villages. We see similarities with  urbanization, where we see increasing demand (and household size) for our grids due to people resettling in their ancestral villages where their social support lies. It is critical to offer those people a platform in their rural villages where they can thrive.”

3) What innovation does SOLshare bring to the market?

“In some ways,  we are already fully living  the five D’s in our “off-grid” villages in Bangladesh. SOLshare’s technology is comprised of our energy trading platform (the SOLgrid) and a peer-to-peer (P2P) solar micro-grid that interconnects households and microbusinesses with and without solar home systems. This allows users the freedom to become producers, prosumers or consumers. The SOLbox is an integrated, direct current bi-directional power meter that is the point of interconnection within the P2P network. The world’s first solar peer-to-peer grid was installed by us here in Bangladesh in a remote village which, though it is hard to believe,  is actually a homegrown innovation. If you think about it, a solar home system already embraces the first two D’s (Decentralization and Decarbonization). Once you start interconnecting them, building a grid bottom up, where prosumers can exchange electricity seamlessly through a mobile money network, you get to the remaining three (Digitization, Democratization & Disruption). And you skip the national grid, which has never reached many of our customers in the first place and shouldn’t. It is  bit of a paradox that the future of energy is coming from Bangladesh.”

4) What initially drew you into the energy sharing space? What was the market like when you started?

“There were over 4 million solar home systems already installed when I first started off around 2014. On one hand, as  I mentioned earlier,  there was an exorbitant amount of energy going to waste every day, and on the other, everybody needed more power but was constrained by their respective system designs. It became clear to me that access to electricity is critical for a remote village, but it is the flexibility and profitability of energy usage that provides the key ingredient for innovation and change leading to sustainable development in a wider sense.”

5) Where is the company focusing  its efforts today?

“Our main goal is to create an energy exchange platform that, in the long run, will be able to sustain itself through the improvements to livelihood and services it provides. SOLshare is working to create resilient energy infrastructures that can cope with extreme climate conditions commonly affecting the South Asian region. The platform is aligned with the community, so as the community grows, so does SOLshare’s revenue.

Our focus is not to just provide energy access. We want the people within our grids to have all the benefits available to those in urban areas. That is why we have expanded our technology to include billable Wi-Fi and electric vehicle charging pit stops. As the energy demand amongst our users goes up, so does our creativity in the services we provide. Ultimately we hope that our users will be able to have the life they want, using the energy they need with the appliances and services they wish to have.”

6) Can you talk us though some of your example projects?

“With the financial support of Energising Development (EnDev), an energy access partnership currently financed by six donor countries (The Netherlands, Germany, Norway, United Kingdom, Switzerland and Sweden), SOLshare has started developing solar charging pitstops for the local Teslas. When I say local Teslas what  I mean are the roughly  1.5 to 2 million electric rickshaws in Bangladesh, the majority of which operate in rural areas. The interesting part of this project is that once such a rickshaw comes for its lunch break to one of our SOLgrids, it can stop and get a boost-charge from the adjacent solar home systems. This money then enters the village economy and the rickshaw rider can now travel further or longer, so his service area and time available to work expands to areas where before few, or even none, could go given that there is no national grid. We also work together with a dynamic start-up based out of Barcelona called BIA that helps us to figure out how far we could reverse this as well, meaning not only is our focus on grid-to-vehicle charging but also vice versa, because at the end of the day these 1.5 million+ rickshaws  represent are 1.5 million+ moving storage units and can interconnect our SOLgrids without using any cables. This in combination with our recent experiments on dynamic pricing will become really interesting.”

Can you tell us how DC energy sharing compares to AC energy sharing?

“That largely depends if you are referring to on-grid versus off-grid. The on-grid world is still dominated by AC and you may use those existing lines for your trading, whereas the off-grid world is dominated by DC where you do not suffer from legacy infrastructure. We are comparing two very different worlds, at least at first glance.

In the existing AC existing grid line case:

• You need to get a retail license.
•  You have to pay transmission fee depending on what flows through the meter installed by the grid.
• You can’t easily control what flows in or out through the AC grid.
• As a retailer you can legally only bill based on data from certified meters, so if you want to be constrained to a virtual exchange, you need to obtain those.
• Only certified hardware can feed electricity into the grid and they must have mechanisms to stop feeding in during a blackout, for example.
• Feeding in (or trading) from batteries in this scenario probably does not make economic sense

On  top of  all this, what problems are we really solving today? In our case, we do not need to obtain any legal license nor do we fall under any regulation in the markets where we operate (remote areas of Bangladesh  and  India). Plus, we solve an imminent problem:  energy poverty. Finally, we are very well placed, given our huge scaling opportunity, to figure out how to arbitrate electricity in a P2P network.”

8) Tell us about your business model and goals. How do you plan to grow over the next few years?

“SOLshare offers its P2P smart microgrid platform in a B2B business model to solar home system distributors. One of our key customers, Grameen Shakti,  is probably the world’s largest distributed renewable energy utility and hardly anybody knows it. Grameen Shakti has disseminated 2 million solar home system installations throughout the country. The SOLgrid platform interconnects those through the SOLbox and manages these dynamically growing grids through a simple service/sales model. The distributors act as the local grid operators for each of the installed microgrids and provide grid-related products and maintenance services for the end-user.

SOLshare counts on three different revenue streams:

1. Hardware (sales, revenue and margin on the SOLbox and communications technology – IoT device)
2. Software-As-A-Service for our customers,
3. The trading fee of every kWh of energy traded among the end-users.

Our biggest customer, Grameen Shakti, has close to 2 million solar home systems in the field, with our 20+ grids with them. But we are just scratching the surface. We estimate that we need approximately 750+ grids installed with 40k connections to breakeven (2% of our core partners fleet). Recently, we raised a little more than $1 million through a SAFE,  and we will increase this with USD 1.65 million putting SOLshare on track to positively impact 2.5 million people by 2024.”

9) Have you seen other organizations with a similar business model?

“We have been out there, alone, for quite some time. I take it as a good sign that more and more companies are taking up similar models. In our sector, the first company to mention whom we greatly respect, is Okra Solar. The company also has an energy sharing model but with a twist in their business model. Ownership is not distributed. Several other companies have started venturing into this field but it’s yet to be seen who can make the unit economics work. If we are to compare microgrid models in the so-called off-grid sector, we are probably still the only ones who really trade on a P2P network, whereas the on-grid world counts numerous examples, such as LO3, Powerledger, and the like.”

The 2020 Global Cleantech 100 report Answers Your Biggest Questions:

• WHICH COMPANIES ARE DEVELOPING THE TECHNOLOGIES THAT WILL HELP US REDUCE OUR DEPENDENCE ON CARBON?

• WHAT ARE THE FACTORS DRIVING DEAL GROWTH ACROSS EACH OF THE CLEANTECH SECTORS?

• HOW ARE GEOPOLITICAL FACTORS AFFECTING POLICIES AND THE GROWTH IN INVESTMENT?

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