Volta: A Start-Up Company Powering West Africa
As the solar and clean energy industry grows, it’s no surprise that the target market for renewable energy technologies is now expanding to include developing communities and countries.
In fact, a host of new start-ups and innovative business models are emerging to fill this niche. One such start-up is Volta, a company currently working in Ghana that pre-finances solar systems in the 1-50 kWp range.
Promising and ambitious, Volta itself is driven by its founders’ powerful vision. CEO Mahama Nyankamawu, an engineer by training, wants to fix the African power deficit in order to fix the economy. “My real passion is not necessarily energy, my real passion is improving the quality of life for people in Africa,” he said.
Rather than focusing on residential projects like many start-ups, Volta focuses on productive sectors to improve overall quality of life for the communities in which they work.Currently, Volta does projects in three main areas: educational facilities (schools), healthcare providers, and agricultural systems. A native Ghanian, Mahama has a deep understanding of what’s needed in West Africa. “I’ve lived there. I know the pains that the people face,” he said. Mahama goes on to describe sleepless nights due to a noisy diesel generator – the costly, loud, and polluting power source used by many Ghanians. Volta’s value proposition is that it provides affordable and reliable energy to small businesses and community services, which have been long neglected from the company’s perspective.
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At the moment, Volta has 2 mWp of projects in the works, an estimated 6 mWp of projects planned for 2017, and a goal to be at 8 mWp of project capacity by 2018. From a financial perspective, this represents about $13 million in future revenues. Thinking big, Volta hopes to be the biggest renewable energy company in West Africa in the next 5 years. Currently carrying out projects only in Ghana, they already have interest from other West African countries, including Nigeria. In order to grow, Volta is rapidly expanding its business development team and is focused on local job creation. In fact, Mahama is working to create a local training program for electrical engineers.
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As far as current projects go, Volta has two university projects, one a 50 kWp project and the other 300 kWp. They’re also installing 1.1 mWp of solar for an information technology company, their biggest project to date. On the agricultural side, Volta does solar-powered irrigation projects in two forms: as a fixed ground mount system or as a mobile irrigation trailer, which means that the farmers can share it – and pay collectively!
One of the biggest problems is ensuring that customers can actually pay. In order to overcome this challenge, Volta has a rigorous customer selection process – developed in part by trial-and-error and largely through Mahama’s own experiences and knowledge of Ghanian culture. First, Volta has a checklist of items that potential customers must meet: How much money are they currently paying for energy? How much money have they paid for energy in the last few years? Do they own the land the project is going to be on?
According to Mahama, one of the most important factors is how much they’ve been spending on diesel in the last 24 months. If people are spending a large amount of money on that fuel source, Volta can structure a project that mirrors the customers’ diesel payments – and then, when the system is paid off, the fuel source (the sun) is completely free. Next in the selection process, a partner bank checks on the potential customers credit and past transactions.
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Once selected, Volta negotiates with the customer and installs the solar array. According to Mahama, a 10 kWp system usually costs between $30,000 to $40,000. The high up-front costs are financed largely by Volta while the customers pay an initial 25% down deposit and then makes payments for the next three years.