PayGo Energy is a metering solution and distribution system that enables customers to access clean and efficient fuel at a low price.
PayGo Energy provides smart metering technology that eliminates upfront fuel costs, enables customers to access modern fuels on a pay-as-you-go basis and allows them to monitor their fuel usage through a smart metering system.
Over the next six months, PayGo Energy will receive $100,000 USD in grant capital and receive the mentoring of its Catalyst Fund sponsor, Accion Venture Lab as part of the first cohort. The company will also work with BFA to identify specific advisory engagements towards strategic milestones and a growth trajectory.
THE Problem and Solution
Globally, 2.9 billion people do not have access to a reliable supply of modern cooking fuel. Low-income urban households regularly pay a large proportion of their household income (~$0.50/day) to purchase small quantities of fuel for cooking, heating, and lighting. The major barriers to adopting LPG as the primary cooking source for low-income households include the high upfront cost of purchasing a gas cookstove, making a deposit on a gas cylinder, and the large amount of money required to refill an empty gas cylinder. PayGo Energy solves the root causes for reliance on dirty fuels by removing key cost and supply barriers to modern energy.
- PayGo Energy provides an alternative solution to dirty fuels like charcoal and kerosene by removing high upfront cost of purchasing gas stoves and gas supplies.
- The PayGo smart meter technology (SMT) couples to any LPG cylinder, enabling micro-asset financing and pay-as-you-go functionality that align with BoP customers’ variable income streams.
- The PayGo system provides energy security by embedding data analytics to detect low customer gas levels. The smart meter replaces an invasive manual pay-as-you-go solution.
- The business model is based on added margin on gas sales. In Kenya alone, the total addressable market of the 6M early adopter users of urban biomass and kerosene, represents $315M USD (Dalberg, LPG Kenya Market Assessment, 2013).
The Value Proposition
- Lower upfront costs of purchasing gas cook stoves and ability to make regular micro-payments.
- A flexible payment structure using mobile money in which customers can purchase credit via their mobile wallet and PayGo dispenses gas accordingly.
- PayGo SMT that detects when customer is running low on gas and arranges delivery based on customer’s schedule.
THE LEARNING AGENDA
PayGo is strongly aligned with the Catalyst Fund learning agenda and core mission. Their challenges as we know them could help answer the following questions and provide learning for the industry around:
- 10x Better Value Proposition: How to provide LPG energy to BoP customers in a more affordable way? How to improve the customer experience with the product and boost engagement with a PayGo model
- Limiting Factors: How can PayGo engender sufficient trust in their brand and the payment system? How can their value propositions work around expensive data or inconvenient electricity?
Awards / Recognition
- PayGo Energy won Village Capital Hardware Africa 2015 competition, leading the next generation of hardware solutions in Africa.
- PayGo also won the D-Prize grant competition.