When Smart Design Finds a Profound Need
Steve Katsaros didn’t start out with the intent to help children in rural Africa with their homework, but his solar light company, Nokero, is certainly having that impact today. Back in 2010, his idea for a low-cost, reliable light was conceived from a more practical design challenge. Katsaros was walking around a construction site and noticed strings of lights hanging overhead. He thought, “Hey, why can’t those be solar?” As a consummate inventor with a mechanical engineering degree from Purdue, Katsaros quickly sketched out a design for a portable, battery-powered LED light in which the batteries were recharged by a solar cell. Within a few days he had the details worked out and sent the design off to the US Patent and Trademark Office, which issued a patent that would later win the USPTO’s Patents for Humanity Award.
Within a short period of time, Katsaros started selling early versions of the light, mainly to outdoor enthusiasts. Then he got a big break. CNN became aware of the innovative design and ran a story about Katsaros’ portable solar light. Aid organizations saw the interview and immediately connected the product to the right market – the billions of people in the developing world who currently burn kerosene for lighting purposes. Aid workers contacted Katsaros and outlined the opportunity, and it all came together. His solar light now had a mission, and his new company Nokero, short for “No Kerosene,” was born.
THE NEED AND THE OPPORTUNITY
According to a recent A.T. Kearney report, nearly 1.4 billion people have no access to grid electricity – almost 20 percent of the world’s population. And these numbers are expected to grow in the future. For example, in Sub-Saharan Africa alone, 600 million people live off-grid, a number that is expected to become 700 million by 2030.
Without electricity, people resort to using kerosene to illuminate their homes at night. Not only is the quality of the light poor, the health effects of kerosene are tragic. Every year approximately 4.3 million people die from indoor air pollution such as kerosene fumes, according to a recent study by the World Health Organization. Another million people die from kerosene-related fires, with countless others suffering serious burns.
Katsaros quickly realized that waiting for grid infrastructure to come to remote villages was not an option, and that even renewables-based microgrids were still far off and economically out of reach. His new design challenge was to take his solar light and tailor it to meet the needs of these 1.4 billion potential customers, most of whom made the equivalent of only $1 or $2 a day.
Within a few product generations, Katsaros’ team produced Nokero’s now-flagship product, the N202. About the size of a baseball, the N202 solar light weighs only 90 grams (about 3 ounces). It charges throughout the day and provides seven hours of light at night. Retailing for $13, it is affordable, and it enables customers to eliminate the need for kerosene. Importantly, Nokero sells the product at wholesale prices, which allows the company to make a sustainable profit and provides the capital to grow and develop new products.
Soon, Nokero’s solar lights were illuminating households in the villages of rural Africa, India, and South America. Children were able to study well into the night, while parents were able to invest their newfound savings from no longer needing to purchase kerosene into an overall higher standard of living.
As Nokero started to see success, another challenge of daily life in the developing world became evident – charging one’s cellphone. In Africa, more than 700 million people use cellphones as their primary way to communicate and conduct business.
But without grid electricity, charging those phones becomes a weekly chore. For instance, it’s common for someone to spend an entire day walking from their remote village to a neighboring town to visit the cellphone-charging store. They’ll pay anywhere from 25 cents to 75 cents to charge their phone, (equivalent to about $50 for the average American), then walk the long journey home.
Nokero addressed this by turning its portable solar light into a cellphone charger by boosting the charge capability and integrating USB ports into the assembly, all for a retail price of about $30. That increased functionality not only saves time and money for the end user, but it allows them to make money by becoming the local charging source in their own village.
THE DISTRIBUTION CHALLENGE
With the advantages of a large market and an aggressively priced product having many desirable features, one would think Nokero would be an easy sell. Not so, according to Nathan South, Nokero’s General Manager. When targeting the developing world, there are no obvious distribution channels to use to get the product to the end customer. “There are a couple different models we’re exploring,” says South. “One is direct-sales to an aid organization or corporate social responsibility group. They generally have feet on the ground, in country, and can handle that last-mile distribution to the end user.” This was the case with the recent Nepal earthquake, during which Nokero sold thousands of lights to an aid organization all at once, which then quickly distributed them throughout the region to those without power.
“Another model we employ is to look for distributors and retailers in a country that are already selling products – any kind of products,” adds South. “It doesn’t have to be solar but any consumer-based good. We sell at a wholesale price to them, and they take care of importing, warehousing, and ultimately sales.” It’s common to have a wholesaler that will then distribute to a number of independently owned retailers. But that’s also part of the challenge. In such a multi-tiered supply chain, everyone wants their margin. “So what you’ve envisioned as a $10 product may end up selling for $20. And that becomes too expensive for the final customer. So distribution is my challenge number 1, 2, and 3.”
MAKING AN IMPACT
Since its formation in 2010, Nokero has sold just over 1.3 million lights in over 120 countries. That translates into a positive impact on nearly 6 million people. Economically, the case for solar lighting is compelling. For example, it is estimated that the developing world spends upwards of $30 billion annually for kerosene, just for lighting purposes. The cost of providing the same amount of light with solar energy, which provides much higher quality illumination, is less than $3 billion. That frees up $27 billion to be spent on education, home improvements, and a range of other cultural and social activities that result in a better quality of life.
According to Nokero – and supported by several studies – children using Nokero’s solar lights increase their study time by nearly 50 percent, meaning a better-educated population. Nokero’s customers are also realizing their entrepreneurial potential, creating new ventures such as local cellphone-charging businesses, or allowing existing businesses to work more productively by staying open during the evening hours, all of which enhances economic vitality within the village.
And perhaps most importantly, a single $13 Nokero solar light provides enough illumination to serve nearly a whole household, entirely eliminating the need for kerosene lamps and candles and the tragic health consequences associated with them.
When asked what keeps the Nokero team going day in and day out, South says it best: “We just think there is something to running a business that benefits society. For me, it helps me get going every day. Yes, I’m selling technology, but now it’s truly life-changing.” Six million people would likely agree.
Michael J. Readey, Ph.D., currently resides in Boulder and is a senior executive with a local environmental engineering firm specializing in biogas purification and renewable biomethane development. He has been involved in environmentally sustainable technologies and businesses for most of his career, working for both small startups and large multinational companies.
4.3 MILLION The number of people who die every year from indoor air pollution such as kerosene fumes
1.4 BILLION The number of people worldwide who do not have access to grid electricity
1 MILLION The number of people who die every year from kerosene-related fires