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Simpa Networks raises $1.1M to sell affordable solar power to consumers in India

Simpa Networks is a start-up technology company with a bold mission:  to expand clean, safe, and sustainable energy services to 20 million people by 2020.  Simpa is developing a product and business model that will make sustainable energy choices “radically affordable” to the 1.6 billion Base of the Pyramid (BoP) consumers who currently lack access to electricity.

Simpa Networks designs and markets high quality solar home systems that are sold on a pay-as-you-go basis to households and small businesses at the base of the economic pyramid.

According to this report, Simpa Networks gets $1.1M to sell affordable solar power. The San Francisco-based company has raised funding in its first round to bring solar energy to consumers in India and other countries, according to a filing with the SEC. Founded by a team with experience in energy and microfinance, Simpa launched a pilot in India last August. Users purchase energy for the easy-to-install solar power systems until the cost of the system has been covered, at which point solar power is free.

Typically the return on investment for a solar lamp varies between 6 months to 12 months depending on the usage, cost of solar lamp and cost of kerosene/candle and this has led to solar lamps being used not only in remote rural India, but also in urban markets, street side vendors and semi-urban businesses instead of the traditional petromax lights.

As Panchabuta has often opined, the off grid solar opportunities are much bigger than the utility scale solar power projects that seem to usually get all the attention. The Jawaharlal Nehru National Solar Mission of the Government of India envisages deploying 20 million rural lighting systems by the year 2022.

It will be worthy to note that companies like D.Light design have scaled rapidly in this area and as Panchabuta had noted, have impacted their second million lives in less than 8 months.

What will be interesting to see is the additional cost the extra hardware and software that facilitate the non core technology cost additionally to the actual solar power system. The Solar lighting market is taking off rather rapidly as Panchabuta has observed and competition is also increasing. If Simpa get its strategy and overall pricing right, this could be a great game changer in this space and could scale much more rapidly in the Indian market, though it is already a late entrant. There have also been talks of a lot of Solar lighting companies in India entering into distribution and financing partnerships with micro finance institutions. Typical price points that might work from what Panchabuta has studied in the market could be anywhere between Rs.500-800/month which is usually the typical cost of kerosene a month.

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