Let’s start with a quote by Douglas Adams (2005), author of the Hitchhiker’s Guide to the Galaxy:
“I’ve come up with a set of rules that describe our reactions to technologies:
1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
3. Anything invented after you’re thirty-five is against the natural order of things.”
These days, I’m very excited about the potential of mobile phones, electronic payments, and solar energy to change the world and completely redefine our lives. As you have probably guessed from the above quote, I’m not yet thirty-five.
I’ve also seen the positive impact of these technologies in developing countries. For example, in the U.S. I would pay at least $100/month on calls, texts, and data for my mobile phone. I’d get about 2GB of data per month, which means my first question when I arrive at any café or friend’s house is “what’s the WiFi password?” In India, however, I pay about $2/month for calls, texts, and data. I can use up to 1GB of data each day (30GB for the month). The difference in cost is enormous! Here in India, I don’t even have WiFi at home. What’s the point of running cables to my apartment when data is so cheap and fast (it’s 4G!).
This phenomenon has been dubbed “leapfrogging” (Fudenberg et al., 1983), which conjures up delightful mental images. Leapfrogging means that a society skips one technology and goes directly to a more advanced one. For instance, in most African homes you won’t find a landline phone, but you will find that most people, regardless of income level, have a mobile phone (Pew 2018). In China, credit cards for consumer payments at many retailers never took hold. Instead, small payments at convenience stores, restaurants, taxis and even street vendors are made using mobile applications like WeChat wallet and AliPay (Kleiner Perkins 2018). India has several versions of mobile payments, the most popular of which is Paytm. Credit and debit cards are also widely used, but mobile payments seem to be taking hold. However, developed countries are less likely to leapfrog. The US and many European countries are also moving towards mobile payments, but at a slower rate than developing countries (Steele, 2018).
The concept of leapfrogging is encouraging. Developing countries can catch up with developed countries, saving on the cost and inefficiencies of landlines, WiFi boxes, VHS rental shops, or paper cheques. One area of leapfrogging that I’m particularly interested in is solar power, but I’m not sure if the same principles of technology adoption can be applied to this industry.
Usually when we discuss solar power we are referring to photovoltaic cells, the black panels that we attach to the roofs of houses or use in solar farms. This type of solar panel is composed of a layer of N-type silicon and P-type silicon with a conductor linking them, but the silicon is quite expensive, and efficiency can vary greatly (Dhar, 2017).
The most efficient solar panels produced by humans are not actually on earth, they’re currently orbiting our planet attached to the International Space Station (Dana, 2017). Despite efficient solar panels like these being extraordinarily expensive, apparently the cost is less than running cables all the way up to the space station. Back on earth, with the availability of cheaper options, solar energy is often not cost-effective which discourages investment in the technology.
We then have two options: (a) make solar panels more efficient in order to offset that cost; or (b) lower the cost of solar panels; or (c) find areas that are remote enough to make solar power cost efficient enough to implement.
New technologies have attempted (a) and (b) by adding mirrors to focus light, adjusted to absorb the sun’s rays at the most advantageous angles. These technologies improve efficiency but solar remains comparatively more expensive than conventional power sources (Emery et al., 2010). The storage of power once generated also increases the cost, because batteries are expensive and contain precious metals that are expensive in dollar amounts, with negative impacts on the environment.
Option (c) seems promising, especially in rural areas where there is more incidences of poverty and the severity of poverty is greater than in urban areas. Running conventional power cables from a central source is expensive and up to 30% of the electricity generated is lost during transport (Emery et al., 2010). Solar power, however, can be distributive, meaning each household can install panels and run cables only the short distance to the inside of the house. In remote areas with low population densities, solar energy will be relatively cheaper and more efficient when compared with centralized power sources.
But will developing countries ever leapfrog to solar? Will solar be able to compete with conventional non-renewable energy? For the moment, we can’t say for sure. Perhaps it’s only because I’m under 35, but I’m optimistic about solar and I believe the best opportunity for the adoption of solar technology is in developing countries where conventional approaches to electrification can be bypassed in favor of more sustainable energy solutions.
I am particularly interested in this topic because I’m working with Frontier Markets, a social enterprise working to bring new technologies, including solar, to villages in Rajasthan. The company is tapping into the potential of leapfrogging over conventional approaches to energy access and reaching rural households and ensure they have access to clean, safe and affordable products. However, convincing people to adopt new technology is difficult and understanding markets for these technologies are challenging to predict. For the next eight months, I will be learning from Frontier Markets’ experienced team about how to overcome these challenges to increase energy access in rural areas.
References:
- Adams, D. (2005). The Salmon of Doubt. London: Random House Publishing Group.
- Dana, R. (2018). Solar in Space: Powering the International Space Station. [online] Solar Tribune. Available at: https://solartribune.com/solar-space-powering-international-space-station/ [Accessed 18 Oct. 2018].
- Dhar, M. (2018). How Do Solar Panels Work?. [online] Live Science. Available at: https://www.livescience.com/41995-how-do-solar-panels-work.html [Accessed 14 Oct. 2018].
- Emery, K. et al. (2010) Solar cell efficiency tables. [online] https://onlinelibrary.wiley.com/doi/epdf/10.1002/pip.1088 [Accessed 21 Oct. 2018]. Vol. 19:84–92, Wiley Online Library.
- Fudenberg, D., Gilbert, R., Stiglitz, J. and Tirole, J. (1983). Preemption, leapfrogging and competition in patent races. European Economic Review, [online] 22(1), pp.3-31. Available at: https://EconPapers.repec.org/RePEc:eee:eecrev:v:22:y:1983:i:1:p:3-31 [Accessed 3 Dec. 2018].
- Kleiner Perkins. (2018). Internet Trends Report 2018. [online] Available at: https://www.kleinerperkins.com/perspectives/internet-trends-report-2018/ [Accessed 3 Dec. 2018].
- Pew Research Center’s Global Attitudes Project. (2018). Very Few Africans Have Landlines. [online] Available at: http://www.pewglobal.org/2015/04/15/cell-phones-in-africa-communication-lifeline/africa-phones-1/ [Accessed 3 Dec. 2018].
- Steele, J. (2018) Payment method statistics. [online] Available at: https://edubirdie.com/blog/payment-method-statistics [Accessed 21 Oct. 2018].
