Product, Service & Design Innovation
Toronto Startup Aiming to Empower Nepal by Providing Electricity, Solar Water Purification

SunFarmer, a non-profit Toronto startup that offers long-term financing for solar energy systems in underserved regions, is playing a vital role in helping the earthquake-wracked country rebuild.

The company, which has spent the past two years setting up projects around Nepal, has powered 10 health clinics and schools that service nearly 30,000 people in the region; by 2020, its goal is to boost that number to 4,000 projects across India and Southeast Asia. But its work bringing electricity to the nation — which remains underserved due to its combination of unstable bureaucratic and seismic conditions — proved challenging, long before the most recent string of devastating earthquakes began in April.

“Unfortunately, Nepal has a history of being a difficult place to do business and a difficult government to deal with, [so] it’s been difficult for many of the relief agencies to work with them and get relief aid into the country,” co-founder Jason Gray told The Daily Mail.

Once the earthquake hit, the country’s electricity situation – dire even before the quake – became completely destabilized. Now, medical teams on the ground urgently need power and clean water to treat the injured and prevent the outbreak of disease. Gray and his team have pulled together donations for 1,300 solar lanterns, 90 portable charging stations and two water purification systems, some of which are still en route due to logistical challenges.

Gray says Nepal’s challenging infrastructure is what attracted him and his New York-based partner, Andy Moon, to set their sights on establishing SunFarmer’s pilot projects in the region.

“We’ve been very fortunate to raise more than $3 million largely focused on Nepal. We see a large scaling opportunity in the impact investor space, which is a relatively new space in North America,” Gray says.

Many companies attempting to bring solar energy to these regions focus on small-scale, affordable residential products, such as solar lanterns. Gray, who helped set up Canada’s first broad-scale solar power project just outside Napanee, Ontario in 2009, saw the potential impact of renewable energy in developing countries on a broad scale.

By eliminating dependency on diesel and kerosene, remote communities can save money, reduce pollution and improve public health. And a three-kilowatt solar panel, which would probably be sufficient for a single-family residence in developed areas, could power an entire hospital in Nepal.

Access to a reliable power source has far-reaching effects many of us take for granted in developed countries. For instance, donated medical supplies that require power — such as oxygen pumps — won’t be of much use if the grid isn’t stable.

But a stable power source such as solar will have long-term, systemic effects that extend far beyond disaster recovery. When local governments see clinics improving their functional operations, they’re more likely to invest in public health initiatives. Stable power can help farmers in remote rural areas break the cycle of poverty — in Indonesia, where Gray says SunFarmer is pursuing agricultural partnerships, many farmers can only access power to irrigate their fields in one-hour blocks. This causes them to over-irrigate, which ultimately limits their yield - and change the game for education by improving access to lighting and computers, as companies such as Arrow and Panasonic have done in Africa and Indonesia, respectively.

At $10,000-20,000 each, SunFarmer’s systems don’t necessarily sound affordable, particularly for struggling economies. Clients pay a 20 percent deposit, then receive a five-to-seven-year financing plan to pay off the rest of the system — currently the longest rate in the market, which averages 1-2 years.

But there’s a reason behind the startup’s bold model: Gray says with a prolonged financing period, the monthly cost of solar becomes competitive to the cost of diesel generators.

“The cheaper we can make financing for these products that need markets, that’s where we’re going to have fundamentally changed the landscape for other clients that need solar,” Gray says.

Plus, the company recognizes that real, sustainable development takes much more than aid or other well-intentioned, but ultimately short-sighted, remedies that often originate outside the area of need. It’s the “give a man a fish” scenario: Sustainable development begins when a community starts to believe in its own ability to scale and grow. Taking responsibility for a large economic project, such as a large solar panel, is vital to that psychological shift.

“The only way it can be sustainable is if accountability and sense of ownership exists,” Gray says. “We feel the accountability of repayment is important and we want to create the relationship that if the system stops working, they have the right to stop payment or we issue a grant until the problem is resolved.”

To that effect, SunFarmer contracts local engineers to make sure their clients keep best practices and enable local ecosystems.

If its financing model continues to work, SunFarmer aims to push its own scalability, with the potential of supplying $100,000 mega-kilowatt systems to boost the grid in urban areas. The company is definitely on the right track — according to a 2014 report from World Bank Group and the Carbon Trust, over the next decade investments in clean technologies in emerging markets are estimated to exceed $6 trillion, of which $1.6 trillion represent business opportunities for small and medium enterprises (SMEs).