We envision a world in which everyone has access to abundant, clean, modern energy. That's a world of opportunity.

GLOBE-Net, December 27, 2011 - Simpa Networks is a venture-backed technology company with a bold mission: to make modern energy simple, affordable, and accessible for everyone.  

Simpa has introduced a product and business model that will make sustainable energy choices "radically affordable" to the 1.6 billionBase of the Pyramid(BoP) consumers who currently lack access to electricity.

Simpa sells distributed energy solutions on a "Progressive Purchase" basis to underserved consumers in emerging markets, such as in India where the company is focusing initially on transforming the market for solar energy systems.  

The company's marketing strategy is based on the simple premise that in India, as in most developing country markets, the low income consumer can actually afford a small solar home system if only they could pay for such a system over time, in small, irregular, and user-defined increments.

That is, if the pricing model matched the pricing model they are already using for kerosene, candles, batteries, and phone charging.

Simpa customers make a small initial down payment for a free high-­quality solar PV free residential power system and then pre-­pay for the energy service, topping up their system in small user-­defined increments using a mobile phone. Each payment for energy also adds towards the final purchase price. 

Once fully paid, the system unlocks permanently and produces energy, free and clear.  The innovative pricing model is called Progressive Purchase™.  Simpa is live with the plan in Karnataka, India.

"At the core, we're making valuable things affordable by separating the thing from the service it provides. That thing is a solar energy system," says Paul Needham, the entrepreneur that runs Simpa Networks. Quoted in a Fast Company article, he said "We are charging for services that people value, at the moment they value it the most."

Needham's company had the great insight was that financial innovation needs to match the technology. Customers in the developing world pay for nothing except for electricity--in small chunks--just as you would top up a mobile phone with airtime.

The technology is relatively simple: a networked device on the residential solar system allows users to key in a code that unlocks its power for period of time equivalent to the purchased credit. Otherwise, it denies service.

It's a radical idea when it comes to energy, but it's already the standard business model for airtime in around the world.

It works because the poor, who can't afford a home solar system for $150 to $450, are able to buy small, irregular, and user-defined increments of energy.

Eventually, they pay for the entire system creating a permanent source of power that replaces expensive and lethally polluting kerosene. A typical payback period for a family is just 3 to 5 years.  

With 1.6 billion without electricity in the world, mostly in developing countries, the impact and the benefits are huge, says Needham.  "When you have access to energy, you can do more things and that often means you can earn more income, which then means you have the ability to spend," he says.

Simpa is looking to raise equity funding of $4 million, which the company is looking to close by March 2012. This will take the company to the break-even point of selling 5,000 solar systems a year. Simpa also needs to borrow money to pay for the solar systems.