SolarHome to invest $5m more in Myanmar
MYANMAR’S huge demand for solar power to serve millions of people in rural areas who cannot reach the national grid has pushed SolarHome, a regional solar provider for off-grid households, to expand further through US$5 million (Bt164 million) in investments next year.
Mila Bedrenets, chief sales and marketing officer at SolarHome Myanmar, said in an interview that the firm had invested $1.2 million in Myanmar since its office was opened in Yangon last year, and would sharply increase its capital over time.
In the last three months, the firm ramped up its installation rate from under 100 to over 1,000 systems per month. The company has planned to expand its network to reach its yearly target of serving at least 40,000 households by the end of 2018.
“Our traction in the past few months has been consistently exceeding our expectations.” said Bedrenets.
“The market’s capacity is enormous. Our controlled distribution model and robust risk management have allowed us to rapidly ramp up while simultaneously improving utilisation and default rates as well as maintaining healthy product level profitability,” she said.
Today, the firm’s installations have brought renewables-powered lighting to over 5,000 people. This includes enabling nearly 2,000 children to extend their study hours, 200 rural shop-owners to increase their earnings by keeping the store open after dark and 120 fishermen to pursue productive night fishing by using the detachable electric torch provided with its systems.
“We are growing fast and our distribution network is expanding. We grow not only in terms of distribution network but also in terms of efficiency. We aggressively double our sales target every month,” she said.
The firm now has six hubs and employ over 80 sales representatives and installers. It expects to open at least 15 representative offices across Myanmar and to create jobs for over 300 people.
The firm now has 20 employees including five expatriates at its office in Yangon. Next year, it will focus on training and retaining its team. Now it works on building the staff’s knowledge on credit risk management.
“Within one year we plan to cover the delta zone and dry zone and to increase the addressable market of our representative offices through smart geographical expansion. Today we cover the area where nearly one million off-grid households live. The demand for solar is huge and we radically increase affordability of solar technology through our rent-to-own business model.”
She said the next moves would be to ambitiously increase the number of households served, to expand the product range of solar appliances that are required by the growing market and to expand its business model to other significant off-grid markets in Southeast Asia.
The firm was seeded and developed by Forum Capital, Singapore’s leading fintech venture builder. It has moved from pilot to industrial production mode after it closed a pre-Series A round of equity funding led by Uberis Capital and debt funding from Kiva.
Bedrenets seems proud to be a pioneer in pay-as-you-go solar for off-grid households in Myanmar where only one-third of the population has access to the grid. She welcomes the competition as other solar providers enter the market. “The more companies are involved in educating the villagers about availability of subscription-based solar energy access, the better it is for all,” she said.
According to Bedrenets, distributed generation based on solar energy is much cheaper and easier to roll out than the grid, and carries much lower sign-up fees, thus enabling access by the lower income users. She said using solar products could bring positive impacts on household development, as it would save money compared to using alternatives.