“Generating income locally”

pv magazine: 2013 was not an easy year for the industry. How was it for you?

Tobias Zwirner: The year started rather slowly but from April onwards business picked up. Our turnover, approximately €14 million (US$19.3 million), is on a par with 2012 and we were able to stabilize the number of employees at a total of about 40. Our components business grew slightly in 2013, whereas larger projects tended to slump.

Currently, many links are opening up between the off-grid market and the grid-connected market, such as grid-connected back-up systems, mini-grids and hybrid systems, especially in the higher performance range. Are you involved in these areas?

Our basic motive is independence, as a company and for the system solutions that we offer. We therefore focus on off-grid applications in pure stand-alone operation for those regionswhere there is no electricity grid. We do not offer grid-connected systems, back-up systems or solutions for mini grids or power conversion units. There are already plenty of other companies that cover this field, so we focus on our own strengths as an expert in the entire off-grid area, away from all power grids.

What about Phaesun’s own power supply? Are you still connected to the grid in Memmingen?

At the moment we are, yes, but not for much longer. We want to make ourselves completely independent of the grid this year. This is a field-test and pilot project for us that we also want to show our customers. We are currently planning for self-provision with a performance of 3,000-4,000 amp hours at 48 volts battery power, as well as a roof-mounted PV system with 20 to 30 kilowatts.

Sounds exciting. You mentioned earlier that your components business grew slightly in 2013. Can you further expand upon this?

The individual components sale is our core business, which we are continuously developing. In addition to this important business, we now want to offer even more tailor-made system solutions for off-grid, stand-alone applications with which our customers can generate income. So it isn’t just about, for example, a family in Africa being provided with light from a solar-powered pico lamp in the evenings and not having to buy fuel for kerosene-powered lamps; but also that, especially in rural areas, they can generate additional income locally. The decisive step is the creation of the Business Opportunities with Solar System (BOSS).

Can you give us any examples?

There are so many. Just think of the various services provided by solar kiosks. For example, one customer of Horn Renewables, our sales partner in Somaliland, bought a 160 liter solar-powered cooler and a solar-powered battery charging station so he could offer chilled drinks and charge mobile phones. He invested $2,500 but was able to increase sales by 40%. Now he can sell 45 drinks per day at $0.60 cents each instead of the previous $0.45 cents because they are chilled. This makes an additional income of about $203 a month. Furthermore, he charges 15 mobile phones a day, earning an additional monthly income of $67. This means that the investment will pay for itself in less than a year. Meanwhile, the kiosk owner has invested more than $400 to upgrade his solar home system so that he can operate a ceiling fan.

Are there any examples for mobile applications?

Yes, have a look here … (Zwirner points around the corner): look at our BOSS sunny power unit. A self-contained bike trailer or cart with integrated 130 W or 175 W module, a 12 volt 138 amp-hour (Ah) battery or two 12 volt batteries with 85 amp-hours (Ah), charge controller and, optionally, an inverter. Thermoelectric circuit breakers and passive ventilation are integrated to protect the system from overheating. In addition, there is still plenty of interior cargo area. Small business owners can operate 12 volt DC or 230 volt AC-powered water pumps with the power unit and offer pumping services in off-grid rural areas, or operate color printers for photographers with mobile ‘photo studios’ and charge cameras. Carpenters can accommodate, for example, a small circular saw, a grinder and a drill and jigsaw, which they can operate on the move with solar power, enabling them to offer on-site services.

How many times have you sold the solar trailer? And how expensive is it?

We are currently in the launch phase – our partner, Bavaria Energy Systems, has produced about 40 units. The retail price with an inverter is about €3,000.

As good as the idea is and as interesting as the product may seem, isn’t the investment nevertheless too much for many poorer families in, for example, rural areas of Africa? Or do you provide funding?

We are currently in negotiations with micro-lenders in, for example, Burkina Faso, as well as with GIZ in order to be able to give the end user a jump-start with low-interest loans. We also provide a business plan as an extra service. For NGOs it may be more interesting to support such business opportunities projects rather than purely aid projects, because this way the money is paid back. It’s all about helping people help themselves, not giving gifts.

Let’s get back to the costs. Is it not true to say that the premium components that you offer are a little too “high-class” for the low-income target groups?

We aspire to quality – that’s how we stand out from our competitors. We strive to combine premium solar systems with premium and efficient consumers who require less maintenance and use less energy. And here there are huge advances: just think of LED technology. Because LED lamps are so much more energy-efficient and have also become less expensive, they also considerably reduce the necessary size of the system design, thus significantly reducing system costs. And with more efficient cooling equipment you can reduce the system size of the PV installation and, thus, the costs.
More and more, our strength over low-cost suppliers is system configuration, especially that of energy-efficient components, for example in the marketing of solar-powered grain mills for small businesses.

Do you mostly offer only direct current (DC)?

In general, yes – but we also offer AC variants on request.

But isn’t it precisely DC appliances such as refrigerators which, because of their smaller quantity, are often much more expensive than AC?

From my perspective, the prices of the DC components do not play such a crucial role in the system costs because they save on the inverter and avoid power losses. The decisive factor is the proper system configuration, thereby avoiding an expensive over-dimensioning of the systems.
However, there are still a number of product groups, such as flour mills, which are not yet available for DC operation. We are currently conducting negotiations with several mill manufacturers with a view to retrofitting the motors to enable DC operation. For us it is all about combining engineering with high quality. Therefore we have, in the past year, also set up a product and quality management unit here at Phaesun to optimize, for example, DC-based components. We are endeavoring to provide more training on correct maintenance to our customers.

But isn’t the expansion of networks with increasing development and urbanization proceeding rapidly worldwide, so that grid-connected AC applications are increasingly becoming the standard?

I don’t believe that we will see the grid in all rural areas, because who is going to finance it? Laying a cable over thousands of kilometers in Africa also costs much more than it does in Germany, for instance. I firmly expect, therefore, that off-grid DC-isolated solutions will continue to possess a huge potential in Africa. Solar power has always been economically viable in remote areas. It is now extremely vital that sustainable development, also and especially in these remote areas, is desired politically.