Renewable Energy Trust

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“This will do to kerosene what mobile phones did to letters.”

Entrepreneur and producer of d.Light solar lanterns

Turning on the lights is as easy as flipping a switch, unless you are one of the 1.8 billion people who still live without access to electricity today. For them it is a daily struggle to have some sort of light after sunset, let alone all the other conveniences of modern life that an easy access to electricity provides. For many in the developing world, up to a quarter of a family’s monthly income goes up in smoke in the form of kerosene lanterns that provide the light needed for a family to function after dark.

A recent Time magazine article suggests that lack of electricity is one of the “largest barriers to overcoming poverty”. Children are unable to study at night without adequate light. While the rest of the world is but a Google click away from a world of knowledge, accessing the internet for billions of people remains just a dream.  

The Challenge

trust_prepaid_solar_thumbMany developing countries simply lack the resources to provide an electrical grid that reaches all of its residents. While residential solar power systems could provide power for basic needs such as lighting, the initial cost is simply too high for many families, many of whom are living on a few dollars per day or less. Buying even a relatively inexpensive solar power system is simply not affordable for them, especially when trying to pay for the education for their children to enable them to get out of the poverty cycle.

The good news for investors is that there are now companies starting up specialized on developing sustainable solutions, which are in need of capital to fund their growth. Using clever “Pay-as-you go” schemes, families can pay over time for personal solar power systems – much like today’s mobile phone plans – at prices comparable to or even less than their current kerosene and candle expenditures. This innovative approach can help bring light to the lives of those lacking access to electricity.

The UNO Renewable Energy Trust seeks capital growth through investments in companies offering personal solar power systems with a “pay-as-you-go” or prepaid reimbursement plan.  

Kerosene Lanterns: The Silent Killer

For those without access to an electricity grid, kerosene lanterns provide the much-needed light for working and studying after dark. This source of light has many negative consequences: A household member may have to walk for hours and wait in long lines just to get enough fuel for a few nights’ worth of light, time that could have been spent earning money for the family. In some cases a family will spend up to 25% of its monthly income just on kerosene. Unfortunately, lanterns are not just hard on a family’s finances. Kerosene lantern emissions include carbon dioxide, nitrogen dioxide, sulfur dioxide, and carbon black particles. These fumes can cause headaches, dizziness and coughing, making it difficult for children to concentrate on their studies. Kerosene vapors can contribute to a range of health issues from irritation of mucous membranes to blood clots and kidney damage. In addition, the fine particles of carbon black emanating from the flame enter the lungs causing chronic pulmonary disease besides contributing to lung cancer risk.

The World Bank estimates that 780 million women and children are inhaling the equivalent of smoke from 2 packs of cigarettes per day just from breathing the fumes from some kerosene lanterns. There is also a risk of fire from lanterns that are knocked over accidentally and every year homes are burned to the ground. Simply trying to light one’s home contributes to millions of deaths each year because of this antiquated system.

There is also a surprisingly large environmental impact of the widespread use of kerosene lanterns. It has been estimated that the emissions from burning the roughly 77 million liters of kerosene annually for light releases around 190 million tons of carbon dioxide into the atmosphere, roughly the equivalent output of 30 million cars on the road.

The carbon black that is released from the tip of the flame is efficient at absorbing light, contributing to global warming. In a recent press release, Nobel Peace Prize winner and director of the Global Health and Environment Program at the University of California, Berkley, Dr. Kirk R. Smith, says “there are no magic bullets that will solve all of our greenhouse gas problems, but replacing kerosene lanterns is low-hanging fruit.”

The opportunity is surprisingly large. Over USD 38 billion is spent globally on kerosene alone for lighting.  

Other Energy Needs

In addition to providing light, solar power systems can bring other helpful benefits to families. Due to lack of laptop computers and internet infrastructure, mobile phones are serving as the key method of access to the outside world for people in developing countries. According to a recent report from the World Bank, mobile phone use in developing countries has surpassed that of the developed world. Personal solar power systems have the potential to provide the power needed for laptops and cellular phones. In addition, these systems could provide enough power for radios to provide families with access to news reports or to bring some entertainment to their modest lives.  

There Is Light at The End of The Tunnel

Clearly, something as simple as low power solar panels could have a dramatic impact on the lives of 2 billion people. However, for most still using kerosene lanterns today such systems are cost-prohibitive. With incomes often in the range of single digit dollars per day, families simply cannot afford to equip their home with even a small solar power system to provide light.  

The Future of Home Lighting in The Developing World

Luckily for investors, startup companies have developed sustainable solutions. Borrowing financial models used in the mobile phone industry, innovative companies like Quetsol (www.quetsol.com) have teamed up with technology providers to offer sustainable solar solutions to people living in developing countries. Instead of having to make a large financial commitment up front, families can now follow a “pay-as-you-go” model to bring solar power to their homes. This not only provides the much needed light but also helps to connect people to the rest of the world through cellular phones and laptops.

The UNO Renewable Energy Trust provides investors excellent returns while helping to make a real difference in the lives of hundreds of millions of people around the world. Quetsol has proven its model with over 6500 customers and will use additional funding to expand to other countries in Central America like Honduras and Mexico. The business model is very simple: Customers pay for the unit over a five-year time period with product costs covered by around the eighth month. This innovative approach allows those with minimal financial resources to make use of a life-changing technology they otherwise could never afford, while returning healthy profits to the manufacturer.

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