6 Ways to Improve Access to Productive Appliance Use with Mini-Grids in Rural Communities

In one of our previous articles, we explored how renewable energy companies can ensure a lasting impact with mini-grids in rural communities. One of the important ways to do so is through diversified energy services. In this case, we are talking about encouraging productive use of energy in order to ensure the mini-grid remains a central part of the community as well as see a return on investment from the grid.

According to USAID, productive use of energy (PUE) refers to powered devices that can be used in commerce, industry, and agriculture. In the latter sector, PUE can be used as capital to grow, process, and store produce. In working to increase the supply and uptake of off-grid PUE, Power Africa prioritizes renewable and low-carbon technologies.

While encouraging PUE is a common method to increase and maintain energy demands in these communities and help customers improve their income, there are issues that affect these initiatives from being implemented. Challenges faced by end-users such as high costs, lack of financing, and poor after-sales service prevent many from accessing these appliances. Havenhill Synergy is addressing these challenges through its Appliance Finance which has been supporting PUE uptake in various mini-grid host communities. The initiative is part of the company’s efforts to boost demand by focusing on low-income customers in rural areas where our solar mini-grids are located. Many rural customers lack financial resources to buy appliances for their small businesses. Havenhill addresses this issue by offering appliances with flexible and extended payment plans.

Since its inception in 2018, the initiative which continues to grow its customer database, has recorded high success in terms of customer repayments for appliances leased out between 2023 and 2024. Based on our experience with the Appliance Finance initiative, here are six important tips for companies looking to implement a similar financing scheme:

1. Target Commercial Users

Focus on customers who use or intend to use appliances for commercial purposes. This ensures the appliances contribute to income generation and business growth, increasing the likelihood of successful repayments.

2. Assess Usage History

Review the applicant’s history of electricity consumption. Regular usage can indicate reliability and creditworthiness, helping to minimise default risks.

3. Evaluate Business Stability

Consider the length of time the business has been operating. Established businesses are generally more stable and reliable, but don’t overlook new businesses that meet other criteria and show potential for growth.

4. Ensure Localized Usage

Require that the appliances be used within your service area. This facilitates easier support, and monitoring, and ensures the community benefits from the initiative.

5. Set Clear Repayment Terms

Keep the repayment period manageable, ideally around six to twelve months. This helps customers plan their finances better and reduces the risk of prolonged debt.

6. Require Warranties

Ensure that all financed appliances come with a manufacturer’s warranty. This protects both the company and the customer from the financial impact of appliance failures or defects.

These tips can help companies create effective and sustainable PUE stimulation programs to spur economic development in rural communities while managing financial risks.