Investee: Solar Intercontinental (SOLARIC) Ltd.
World Bank estimates that approximately 60% of rural households are yet to get access to electricity in Bangladesh. Most of these families either depend on low standard candle or kerosene lit lantern or diesel run generators. All of these options are expensive and have adverse impact to health of user and environment. The clean and efficient solution to this scenario is the availability low cost and efficient solar systems. SOLARIC develops and manufactures solar home systems and power backup systems in Bangladesh. The Company’s proprietary and patented micro-inverter technology optimizes the energy efficiency and improves the useful life of the solar home systems and power backup systems, by facilitating the use of smaller batteries, solar panels and energy-saving appliances. With innovative design that provides practical, on-the-ground solutions for the poor, SOLARIC’s 3G-SHS Technology (patented) is the key differentiator between itself and other Solar Home System (SHS) provider companies. SOLARIC sells Solar Optimizers, the only commercially available converter in the world for SHS that converts low voltage (12V) into standard high voltage (120V and 220V) and integrates all the functionality required in a SHS. The core of the Solar Optimizer is an intelligent microchip (integrated circuit or IC), designed by SOLARIC at its own R&D lab, that brings the efficiency. This device is connected to the Solar panel and the battery and with the power generated, it can run off-the-shelf standard appliances such as fans, color TVs, charging mobile phones etc. and removes the bottlenecks of traditional low voltage SHS such as limited distance, special appliance, limited load, backup time etc.
Founded in 2009, SOLARIC is headquartered in Dhaka, Bangladesh where it houses its research and development center. The manufacturing facility has a present production capacity of 5,000 units per month. SOLARIC started its commercial operation in July 2011 shortly after SEAF’s initial investment, and consolidated a second SEAF investment in 2012, totaling US $1 million. When SEAF made its first investment in the Company, SOLARIC had a small paid up capital, however, has already developed the optimizer technology. SEAF’s investment hypotheses included large, addressable, and rapidly growing green energy market in Bangladesh, commercially viable cutting-edge technology - patented, proprietary technology that offers improved efficiency etc.
Through the end of December 2014, SOLARIC sold ~57,652 units of solar home systems and made BDT 520 mm (USD 6.71mm) in sales revenue with a double digit growth per month. SOLARIC has been a key supplier to Grameen Shakti, SHS implementer and a microfinance institution with ~50% SHS market share, which is expected to further grow sales while improving the living conditions for Bangladeshi citizens throughout the country. In August, 2014 SOLARIC inaugurated its new factory in Bhatara, Badda, Dhaka. The new factory, which spans 10,000 square feet, will serve the extended demand of its channel partners. SOLARIC currently works with Grameen Shakti, PDBF, RDF, BRAC Solar etc.
SOLARIC creates significant development impact through the generation of clean affordable solar power for rural communities in Bangladesh. Its proprietary technology reduces the cost and increases the efficiency of these environmentally friendly, carbon-reducing power systems. Power generated by SOLARIC enable children to continue education, banks to operate in underserved areas, and government offices to run information centers that provide services to rural communities.
SOLARIC’s latest innovation is its Nano-grid, a game-changer in terms of affordability and functionality. The Nano-grid is a larger solar power system that can serve ~50 households through prepaid metering systems for communities.
The prepaid metering allows SOLARIC to control the individual users to ensure group payment functionality; the meter at the last mile automatically stops power transmission to households encouraging them to pay earlier and refill their meter. This mechanism reduces risks for SOLARIC by allowing them to collect payment up front and thus also addresses working capital constraints of SOLARIC. The system also allows users to track their own usage, reducing reliability upon servicemen and dealers.
Kapasia Upazilla of Gazipur, the Nano-grid has replaced noisy and polluting power generators in the main marketplace (bazaar) serving around 20+ shops, and the potential to scale this up - reducing cost at the last mile and lowering harm to the environment - is an opportunity that SOLARIC is aggressively pursuing. SOLARIC has installed another Nano-grid in a neighboring Union of Kapasia Upazilla in Gazipur to serve around 50 families including a small poultry farm.
Local residents with small businesses, such as a small poultry farm, a small shop, or a trading outlet, have embraced SOLARIC’s technology similar to the way that they once embraced microfinance. Demand has been strong (SOLARIC expects to install ~ 500 Nano-grids by 2016) upon the viability of the concept having been established. Currently, there are 5 Nano-grids in operation.
Through investment in SOLARIC, SEAF sees a significant impact to the energy starving rural Bangladesh, as well as other parts of the world with similar profiles, with ongoing innovation and expansion of a sustainable renewable energy harnessing model. SEAF Bangladesh Ventures Limited exit SOLARIC in 2015.