Cambodia is a country with a population of over 15 million. As per GSMA estimates, 99% of its population is covered by GSM networks. On the other hand, just over a third of the population has access to grid electricity. GSMA estimates that the energy addressable market (people covered by GSM networks but not served by the grid) in 2013 was 9.6 million. The statistics strongly suggest a large opportunity for solar home systems (SHSs).

Last year, the GSMA awarded a grant to Kamworks to test an innovative rental or sales model for SHSs. I visited Kamworks earlier this year to learn more about the environment they operate in and better understand the market opportunity for SHSs, especially pay-as-you-go (PAYG) SHSs which rely on good mobile coverage and mobile money penetration.

A site visit – how Kamworks work

Kamworks installs a demo system in a house where that family can use the system for a few days and neighbours can share the experience. A Kamworks sales agent does a presentation at the home of the host family and then follows up with people who register their interest. A credit check is done by the financing party (could be an MFI or Kamworks itself). Observing the sales presentation and visiting several homes gave me some insights specific to the Cambodian market.

The home where the demo system was installed

Consumer insights

Energy in Cambodia versus East Africa
In most East African markets, small SHSs are extremely popular as a superior alternative to dirty fuels for lighting. These systems often the first to bring electricity to homes. The situation in Cambodia is radically different. Many homes use 50Ah automotive batteries, charged by someone running a diesel generator, to power their homes. This solution is unwieldy (the batteries are very heavy) and means the home is without power when a battery is being charged. However, given that potential customers of SHSs have already experienced electricity in the same form that a solar system would provide, there is less aspirational value for solar than in East Africa. Instead, the market for energy is largely commoditized.

Appliances
In many homes, people have bought inverters to drive commonly available AC appliances. It is not uncommon for people to own multiple batteries so they can drive several appliances. Virtually all homes I visited already had multiple lights and fans. One home had a 1.2kVA inverter and a 42-inch Samsung LCD TV.
Below is a photo of a typical appliance that supports DVD playback and playback from pen drive over USB. This device costs $20-30 and a fully charged car battery will power it for about four hours.

A locally available entertainment device

Mobile Money
Mobile money is primarily used for remittances in Cambodia. People are unfamiliar with payments for services through mobile money. In fact, even agents need to be trained to accept payments for bills. The mobile money footprint, although advancing steadily to rural Cambodia, is still far from ubiquitous like it is in East Africa.

What is the opportunity?

For a household used to powering its home with a 50Ah battery to drive several loads, a small pay-as-you-go (PAYG) SHS below 10W capacity is simply not enough for this segment. The minimum SHS size would have to be in the 50W range. For a system this size, availability of financing can really bring down the barrier to ownership. And we have seen mobile-enabled PAYG systems are not only technically feasible, but also financially viable in other markets.

The next question is more important – what problem does this system solve?

• Convenience? Not having to lug around heavy batteries is a nice to have. But some enterprising charging services even offer to pick up and deliver.
• No “outage”? For a home with a single battery, there is an “outage” when the battery is being charged. However, this is typically during the day time when the system is least used.
• Safety? Open connections to battery leads can present a risk. An SHS could be made much safer by enclosing the battery.
• More energy? Automotive batteries degrade quickly when they are over-charged. Most charging service providers stop charging a battery only when it is hot which means it is damaged each time it is charged. SHS batteries with charge controllers would degrade more slowly.

It remains to be seen whether any of the above is compelling enough for people to invest money in a large SHS. Meanwhile, it is abundantly clear that appliances are very popular even in rural Cambodia which would be considered “energy starved” if we went only by statistics. Perhaps a PAYG SHS with remote monitoring can be an anchor to understanding consumption and thus used to upsell appliances.