#Goodstart
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Blockchain and Sunshine: Solshare
Sunshine + Blockchain Technology = De-urbanization and Financial inclusion
That's the equation that Solshare is working to in Bangladesh, a country where $3 million worth of electricity is wasted every day from people generating it in their own homes, but not being able to share it.
By linking together homes and creating micro-grids of electricity, Solshare aims to be able to turn anyone into a Solar Entrepreneur: generating an income, creating financial inclusion and giving people more reasons to stay in their villages and towns, without being one of the 10,000 people that arrives into Dhaka every day.
Sebastian from Solshare explains how
Okay.
Speaker 2:Welcome to the Goodstart podcast. I'm Bonnie Nelson with another amazing story of how blockchain is being used to change people's lives. Sunshine Plus Technology and Blockchain Equals Dia, urbanization and financial inclusion. That's the equation that soldier working to in Bangladesh, a country where$3 million worth of electricity is wasted every day from people generating it in their own homes, but not being able to share it. Outside of those very homes. There are people who have to pay massively over the odds to do simple things like charging their mobile phones, but for whom electricity's still a cost and not an income source. By linking to the gate of these homes and creating communities or micro grids of electricity, Soltra aims to be able to share that electricity and to turn anyone who wants to intake a sole entrepreneur, generating an income, creating financial inclusion and giving people more reasons to stay in their villages and towns without being one of the 10,000 people that arrives into Dhaka or every day. It's a pleasure to have Sebastian here from Seoul share to be able to explain how and to be able to talk through the journey with him. Sebastian, that's a pleasure to have you on, on the good startup podcast and thank you very, very much for making the time today. Thanks a lot for having me. Maybe we can just start off with how you found the world and ultimately what is the, the problem that sold shares here to here to fix people pay for the same kind of services, uh, better off people enjoy a much higher price and often with the less, less good value of service, I think that uh, the rouge and basically Dna we have, uh, we'll, we'll probably hopefully always stay the same, which was too trying to figure out a way how to elevate people from energy poverty well from an energy poverty penalty as to put it, um, basically meaning that we saw that there are millions of systems, so systems produce a lot of access power and the value of Sas hour is enormous. To put some numbers here as about 600,000 kilowatt hours, which are excess power or a dump loads every day on average. And the value of those is about$5 per kilowatt hours. Multiply those two, you would have$3 million which are lying in the street and nobody picks him up. Capitalism, we staggering numbers of people suffering from energy, putting these things together. I think it's the fundamental premise of of sole share. People already through cables over, it's one of them has access to go and the other one not yes, through a solar system, Bsu or decent generator. Then what you do is you throw a table, you nope. How long someone has it's light in the evening on and the next day you say, Hey, from eight to 10 lights are on, give me 10 cents or 10 is local currencies. Yeah. And that's of course a very rudimentary way of sharing our, but it's effective. It works. You can of course design. There's a little bit more in a, in a seamless fashion. And that's what[inaudible] is all about. So how to tap into these$3 million and make it available to those who need it. It's a solution we came up with is a trading platform where people can change electricity seamlessly, peer to peer, and it turned out to be that a, this kind of an approach, it's kind of energy arbitration. It's change is likely to be the future energy utility model and that not only in Bangladesh but possibly globally, so we're talking about for the$3 million with the excess electricity generation on the one hand coming from solar, often diesel, but on the other hand, am I right that it's around 17 million households who are off the grid at the moment and who have to pay, as you said, a premium for access to electricity more than the people who are on the grid. The latest data is 40% are off according to the government as of last month. That 93% have access to electricity. I think that's rather an estimation on the very much higher end. Where we are operating majorly now is in areas which are river island's, where it is extremely unlikely that the national quit is reaching them. So the 40% off grid is likely to rise significantly above that if you don't have access to electricity, but you have a phone, which is quite often the case in many countries and also in Bangladesh, what do you do? So you bring it to a neighbor and that neighbor will charge you depending where you are. He in the country between 45 now if you calculate how much a simple phone, we're not tell us talking smart phone yet how much electricity charge. And you do this over the Napkin calculation with the five top, you come about$10 a kilowatt hours, which is obviously an insane amount of money or a phone charger. So you've got the people who are off grid and having to pay astronomical rates to be able to even charge their phones. And at the same time you've got$3 million worth of electricity as you said, being kind of thrown into the streets every day cause you said so this is worst in the river island areas and the rural areas. And presumably this is one of the reasons why there is so much urbanization going on as a kind of secondary consequence of life that essentially people are pushed and forced to move into electrified areas to be able to actually run a more normal or kind of cost effective life. But there's also a trend which the you darker as the capital of Bangladesh has an influx of people of 10,000 every day. The city is already person. I mean you have seen levels of pollution like first, second or third worst in the world. You have an average speed in a car off five, six kilometers per hour. The the city cannot take more people. So part of our goal often is also is to make life in the village areas from an electricity and Internet access perspective or even better then light the cities in order to, you know, prevent this mass news went into the city's because the city can't hold that much longer.
Speaker 3:So essentially by, by providing an energy source to the people in the, and in the off grid areas, you're giving them first of all, electricity you second of all, you're reducing that costs. Third of all, you're giving them an income and for your, you're giving them a reason not to
Speaker 2:go to Daca. Yeah, we wouldn't, we would like to go even further. So the startup sector here in, in, in, in Bangladesh is getting stronger and stronger and one way or the proposition which I would like to make is, okay, look, if you're in a village, I give you electricity access. I did few Internet access and I give you access to doctors in the u s let's say. So then you can have a live chat or phone call over Skype. It was a doctor in the US who treat you in real time, which you can only get if you are there. You can't, you can't get this kind of extra doctor of the moment. You have this kind of access. A whole new world opens up.
Speaker 1:Okay,
Speaker 3:rules are talking about giving people an income here, not only actually putting money in their pockets, but presumably also starting to bring them into the financial world in terms of giving them access to other financial services in terms of credit and and actually setting them up to be able to run small businesses and so on and so forth. Just simply off the fact that they start with an individual income.
Speaker 2:That's right. I mean 3 million or$6 million or whatever that number may be is of course on your starting point of, and then she would just being wasted right now, which can be tapped into should this social platform, but it's more than that because the moment you have a training platform and it makes sense to acquire storage, solar storage or solar generation capacity, not only for your own consumption, but for selling. You haven't entrepreneurship, etc. We call it smart solar entrepreneurs. That means that the platform grows, more money is brought into the village because solar is not only being traded among the villages. We even have schemes now where electric vehicles, like Rick Shafts, that 1.5 million of them in partnership and drive through our religious get a charge while they are in the village who has the t or whatever, which means also make money from outside. So it is really a a model of where the local community, it's theme is being developed.
Speaker 3:So step one is just basically just give somebody, as you're saying, light bulb. Step two is then make them a, as you said, an entrepreneur in terms of not only being able to take care of their own individual requirements, but to be able to actually turn it into proper income, source of business income source. So let's talk through that. Ultimately, how this works then, I mean we're talking about putting electricity into people's hands in river islands and so on and so forth. What does that look like in practical terms?
Speaker 2:So the 5 million systems, 500 solar home system, which has been disseminated in Bangladesh, have all a battery and a panel and usually a charge controller and a couple of appliances. So the sandbox is nothing else in your meter and it's by direction. So I can run up and down. What is special about a saltbox is it doesn't show you kilowatt hours. It shows you the local currency, which is so you may start the day with a hundred Tucker over the day. You switch things on or you switch them off by power or yourself power. You're across humor though you're not a consumer, not a producers, some hyper followup. And at the end of the day you may end up with 80 fuck out. You may end up with 10 to 20 times. That depends on how energy efficient I is, your behavior or your appliances, how much power you produce. And um, are you a net producer or consumer? Do not know with whom you're trading in, which is very important for the piece in the village because it may be a small Hindu Community or Muslim community. You, I mean simply not like my neighbor and we don't want to have any issues of that. There is also from a revenue perspective for Solo share, there's a bit and ask spread. So if I sell a kilowatt hour for 50 Tucker, so you, my meter, if I'm at a hundred taka, if we go down to 50 taka and probably if I sell it, sorry, it goes up 50 taka and you uh, we'll have paid probably uh, 60 Tucker and uh, so your balance goes down. 60 Taka and 10 tiger automatically goes do, I'll have one. What is important to you is all this is synced to the peoples mobile money wallet, which means they have this money away Annabelle in real time. So if I go to the market, it's 3:00 PM in the afternoon, it's very likely that I'm selling because the sun is peak sun hours. My batteries is likely to be full. And that means I can buy my rice in a local market. That's my mobile money wallet with the money which my paddle just own.
Speaker 3:So essentially it exists within the, the mobile money ecosystem. If you like, you know, you're, you're an input in terms of electricity, but they're, the mobile money is the key facilitator that takes this from a, from a kind of isolated idea into a real world income source. That's right. And that's, that's the point when you're connected to the mobile money, uh, on the mobile wallet, that's where all the access to other, presumably other financial services and financial educational, so it kicks in.
Speaker 2:Well, you obviously you build up a track record, you build up a track record of having paid off the solar home systems in the first place. Hmm. Who builds, uh, financial footprint in terms your trading behavior. And this data can help you to become bowl eligible for any, uh, other kinds of financial transactions.
Speaker 3:So you, right. So you basically, by having a payment history of the transaction record based on the sole share relationship that provides essentially the basis for a credit history, which can then go on to provide the basis for all other services from banking and another
Speaker 1:financial services.
Speaker 3:I'm Bonnie Nelson. I hope you're enjoying this. Good stuff, podcast, if you'd like to get in touch or involved in any way. Look us up on the value exchange.co/good star or friend us on Facebook or linkedin. Thanks.
Speaker 1:And back to the[inaudible] podcast.
Speaker 3:Social is very interesting in the end as much as the fact that you talk about using a local currency as the underlying currency, you could equally have chosen to use a cryptocurrency. There are obviously very good reasons why you chose not to run on, on any elements of the blockchain, not just crypto. Can we just talk through that for a second?
Speaker 2:Well, let's start with why not trip though. And there's a very simple answer to that because I really love my freedom and the seven years imprisonment for crypto in Bangladesh. It's not a very appealing, so significant obstacle. Yeah. So crypto is how out of the equation for the time being, even though we are mimicking crypto first pilot project, which has to do with blockchain, I mean, everything we're doing on the salt boxes, you could call it a distributed lecture, but I usually don't say that because then people get all carried away with, oh yeah, blockchain for good. And that's the best blockchain application out there now. And then everything gets, uh, you know, one thing, the other, we do not use any of the consensus mechanisms of the blockchain for the simple reason that our ESOL boxes today do not have to computational power to do that. So even if I use the lightest notes, which is out there in the market right now, we cannot do the computation on the individual notes, even on the lightest note. Again, the energy consumption goes extremely against all our efforts when it comes to energy efficiency. And who pays for that? I mean, we can't make people pay for that, so we would need to do that. But we don't have our own generation assets in those villages with similar as a sharing economy model. We don't want to have any assets. You also don't have a trust issue. We have very good business partners who have a tracker for the last 10 20 years to work with. We don't have this trust issue either. So there wasn't really a case or a problem we had to solve.
Speaker 3:Oh fuck. Which I think is fascinating that you've had a very informed look at blockchain technology and its various aspects as you said in terms of trust, in terms of the crypto elements and so on and so forth and still reach the conclusion that all the hype,
Speaker 2:it just doesn't fit a lot of attention. And of course we do use a function but something we were part of an accelerator called free electrons, which is a program consisting of 10 utilities, giant energy utilities from, from all continents came together and said okay, we believe that what has happened to the telco industry will also happen to the energy utilities and when this happens we have to be prepared. So let's go on a hunt for startups and see what the energy future will look like. So they were making the case to us and saying, look, the value of what our, some of us may know what's the cost of a kilowatt hour, but it energy is something which is politically very sensitive. But then again, it's something which we just take us for granted and ideally the monthly bill is as low as possible. Um, so that said, when we sell energy efficiency measures to let's say the automotive industry or the suppliers of the, the automobile industry, it takes about 18 months to close such as sale because it's so boring. So if we could emotional lies that process, I think we could probably say maybe six to nine months of our sales cycle, which saves us an enormous amount of money. And then yet another company came and said, we are selling PV but we don't have any USP real cause you know, prices come down and panel is a panel. It's not sexy. So if I can say that 1% of all which is being produced, and you can see this life in your phone, in an app or in your dashboard, is that goes automatically into a smart grid in a remote area in Bangladesh. And I can actually see with 1% of my generated power, I can power an entire village in Bangladesh. That's pretty amazing. So we thought about this a little bit and came up with the idea of what we call the solidarity token. So the solidarity token is basically a token where you define a rule, it energy savings of the percentage of energy generation. Let's say 1% which is automatically being transferred onto a box of your choice. Be The company of you're the end user in German. And that can be that he or she goes to a dashboard and chooses a special purpose. It should be a woman or I should, uh, Rick Hsa or it should be a computer shop where it should be a pharmacy or whatever should be for light only, whatever that that money is then being transferred with the promise that it is 100% transparent. If we were allowed to use crypto here, 100% efficient, which we are not, so it's not 100% efficient but it's definitely the most efficient way to make a donation. Then any other forms in the famous development aids, we have actually an external body coming to Bangladesh and visit a couple of our hours and they perform what they call an Roy assessments or a social return on investment assessment. And the result you, no, you use this assessment against uh, a set of SDGs. In our case it was STG one, five and seven, so poverty, gender and itchy and they came up with for every dollar invested wait about four[inaudible] 85 value, uh, in, in a solid way. So that was a very, very encouraging arching result for us. We are about to launch set solidarity token. And I think that's something where the blockchain makes sense. It's this is all in a smart contract. It is all[inaudible] program and it's all set in stone or rather in coach. So ultimately, so your core infrastructure to to generate electricity for good reasons, blockchain just doesn't fit with that. But ultimately from a giving perspective, you're able to use tokens and smart contracts as a way of providing extremely transparent donations. And as you said, more cost effective donations and probably other ways. Yeah, that is something which hour a solid box is 10 computation. It's an answer to a smart contract logic. That is, that is possible because essentially you're talking about a top really here, I mean, I'm thinking about a mobile phone kind of language, but you remotely topping up somebody's electricity balanced you, they're the sole box balance. That's exactly right. Yeah. And it could be a school or whatever. You know, we have also heard now recently from a couple of, uh, of donor or a device and say, look, we would like to sell pots in schools. Are we only allowed 50% off the money also comes from the local government. Are we found whenever the sets the money in place you don't have local government doesn't end up paying and then though money is somewhere stranded, the project is not happening. Never have modern. Correct. You have seen entertainers execution and you have only executes neighbor. The similar changes again, zero degree of corruption. And so let's talk is also about kind of where souls share is today in terms of, you know, how this is, this is very real. I mean this is, this is happening across many communities in Bangladesh. Can you give us a few stats and figures in terms of where you are and where you're aiming to get to? One of our partners is for instance, Grameen Shakti, which has been founded by the Nobel laureate, a professor Mcginnis. And they have single handedly could 1.8 million solar home systems into the fee in though ask 20 years. So we're working with them and we receive on Supergirl support from um, UN desa to build a hundred grids together with them. This year, only a hundred grids for us means about 30, 40. How is on average? So that's, I'm sorry, 40,000 connections to your building. Uh, this year we sent, we have set up the first 10 weeks with them so we are more or less on schedule for that. And part of this exercise this year obviously is also to see a hundred grids and this become a thousand prints. What's Grameen or Kansas become 10,000 with Grameen or is it, is it ending at a hundred and I know we have to have to choose another path. That is, that is one of the key since for us, uh, one of the key issues for us is also of course to dive deep into our data. So there's 30% of excess, the 600,000 kilowatt hours over the whole time in our grid. How much ops is 30% can be making way liberty if we have a fixed price. If we change to a dynamic pricing model, which obviously makes a lot more sense. Then at 3:00 PM you have a different price and it's 3:00 AM given that it's also a power, how much more efficient becomes the allocation, so how much more of the 30% can we tap into? How much money are people making when they sell hour, how much they invest in additional bachelor's handling capacity. These are all KPIs we are closely monitoring. We have very ambitious plans, but they also have really depend on our performance right now and then we are closely monitoring the data that the, that we receive from all those boxes.
Speaker 3:And you're ambitious plan I think is best summarized as a million people by 2030 is that correct? That's right. And how ambitious would you consider that now that you're several years into the journey?
Speaker 2:If you look at the gross pass off our partner of Grameen Shakti, it took them about six, seven years to get maybe 5% of the 1.8 5 million. And then they had this growth stage was just kind of this, what we usually call it a hockey stick. I would want us to see by the end of the year too, she nearly indicate that we are uh, on the hockey stick part. It's just not hitting the ball but which you are holding. Makes sense that under strongly uh, increasing pass. So I think it's possible.
Speaker 3:What are the reasons why you think you may struggle? I mean what are the surprises that you've seen so far that might undermine your ability to roll out a, and kind of the speed that you originally thought
Speaker 2:the elections in those have just taken place in December as usual in the run up to the elections. Cameron is going all in, in terms of promises on electrification. It's, it's, it's to be seen how this develops. So that has definitely been one. And then this trading peer to peer, it sounds so simple, but the technology stack and the box is really, you said it's the heart of the system. Yeah. But I also would say at the peak of the iceberg, and there's a lot lying under the surface, which is extremely complex, we could have installed a lot more. We consciously refrained from doing though simply because we said, okay, let's get some more feedback from the field. Oh, this person should not be there and oh, why
Speaker 3:is this Fox behaving weirdly? There's something wrong in the firmware. Let's fix that first before we take the next bigger batch after next for news version. But so essentially by end of 20 1,930 or grids providing income, providing the basis of financial inclusion, rural regeneration, and potentially even access to, you know, additional health care or remote healthcare, remote education, so on and so forth. So we're changing lives in a, in a very significant way simply by connecting households and access to electricity in a way that's just never been done before. That's right. So back to the original 3 million of wastage, as you said, if he can do the right data analysis and track it down, well, you're well on the way. It's being able to make us a significant impact on that. Really thank you very much for explaining. This is clearly as you have and it's, it's uh, yeah, I think everyone is, just can't wait to see how you get on with 130 grids and, uh, reducing that$3 million of wastage as fast as possible. Thank you so much. Thank you. I'm Bonnie Nelson and thanks for listening to this week's good start episode. Next week there'll be another amazing story about how blockchain is being used for good, and so make sure to join us. Then in the meantime, if you'd like to get involved, look us up on the value exchange.co/goodstart or on Linkedin or Facebook. Thanks and see you next week.