‘Our solution designed to optimize ecosystem for constant power supply’
Chief Executive Officer of ZOLA Electric, Bill Lenihan in this interview with FEMI ADEKOYA talks about the renewable solution that the company is bringing to Nigerians to ensure reliable power supply to every home.
What is ZOLA Electric bringing into the country’s renewable market and what makes the firm different from the others?
I think the problem in Nigeria is that there is not enough production and distribution of power for the population in Nigeria. I think Nigeria is a perfect example of a country where there is massive energy deficit. This is a fact that cannot be disputed. Everybody living in Nigeria has this issue; every business has this issue. So, the question is what happens when people are having problem with energy or what happen where that exists? It means people have to come up with their own energy.
For those living in Nigeria, what that means is that each one has to figure it out by itself. Overall, it shows there is a mess which ought to be addressed. Beside this mess, the energy crisis also forces you to change appliances constantly or sometimes force you to do an upgrade. Beyond that, you also have these alternative sources causing health hazard and noise pollution. In a nutshell, I would say that you have a system that is unreliable, expensive and hard on your life. So, for us, that is the problem we have come to solve.
So, the question then is, how do we solve these problems? That is why we are offering products such as Infinity and Flex to address this problem. Our mission is to deliver 24 hour power to anyone, anywhere. Our product offerings allow us to do that and these products are tied towards meeting that needs. If your energy needs are more limited, which means you just want to power bulbs in your house, or power your television and other small appliances, we have a system that is built for such purpose. This system has been designed to provide solar storage that looks like computer such that the computer allows you to optimize production and discharge system. With such solution which has something similar to a computer attached to it, you can actually pay over the phone or through refinancing. Let me also add that the product is more marginal. Whenever you need more energy, the product allows you to get more energy without affecting the existing system which is different from what you have in the market today. If you want to generate more power, the solution can help you. It is smart and comes at low cost. If your energy needs are more powerful, say you run a business or factory, even though you have small power needs but rely on the grid, there is a product designed for that purpose and it is called Infinity which better serves that need. Only recently, we announced that we would be bringing the product into the market.
What makes the Infinity solution different?
Now, think of Infinity like a smart grid in the home. It is a product that is also connected to all other energy sources; it is connected to the grid, connected to e-solar. The first thing it does is that it optimizes the ecosystem to deliver 24 hours power at reliable low cost. How does it work? It does it in a subtle way. What it does is that it optimizes your accessories such that you get 24 hour power in an affordable way. Also, it is modular. As soon as you need more energy, you get it and it is done in a very seamless fashion that is cost effective. Here, existing system stay intact; you are not changing it. It is a system that allows you to manage power usage using your phone app. It allows you to manage your energy provision in a very simple way on your phone. You can make it smarter so that it optimizes better. You can pay for it using your phone and we would offer that service under a 5-year service agreement. Within the five years, if there are any issues, we would fix it for you. From Flex to Infinity in emerging markets like Nigeria, we are offering a primary power source, unlike what you have presently where everything you do to get power involves backs-up which is unreliable and expensive. Our products are more reliable, cheaper and easy to use. For us, we believe that is the best way to solve the problem of energy access in Nigeria.
One of the issues with deploying solar has to do with storage. Your solution looks more like what Tesla is offering with Power wall in United States of America. Are we looking at something similar? Will your storage come with the product or do you look at some point in time where you sell it as an additional service to those who have solar system installed before now?
Let me clarify that this is not solar but a smart power solution. Solar is a component. The solution only has a smart battery for Solar. It is not Tesla Power wall because Tesla Power wall is a back-up solution or system. It backs up your home. Our product is different because it is a solution provided to manage your home. It manages all your energy sources and optimizes them such that you are able to get 24-hour power from any source in a reliable and affordable way. Tesla Power wall is built for United States of America and other western markets such as Europe and Australia but these products are built for Nigeria. Our smart battery will work with other solar panels. But I think the challenge with most batteries used with other panels is that it does not last long. I need to state that most of these batteries are not built for solar energy in the home but built for automobile and other uses. That is where the difference comes in. We have five-year service agreement, and our panel is going to last at least 12 years.
Our battery is durable for 7 to 9 years. We have an obligation to replace those components within that service agreement. We are offering a solution that has not been witnessed in this market before.
What informed your preference for Lagos as the pilot market for your product?
Lagos, like Nigeria, is the epicentre of the energy access crisis across the globe. There is not one person, or business in Nigeria that is not confronted with this crisis. Unfortunately, Lagos is one large city that has suffered much energy crisis, considering its huge location of businesses and massive population. With what is on ground, the problem is only going to get worse. We talked about Nigeria for a number of years in every of our board meetings. In the last two or three years, we have been asking what do we do about Nigeria. We were never ready to provide products that we can tailor towards Nigeria until we came up with Infinity. Also, we never had a business model that is built towards Nigeria. But in the last two years, we have placed our focus on what the problem is in Nigeria as far as energy access crisis is concerned. Our focus on Lagos was not only because it is huge and urban but we realized that it is a city that harbours every type of person, business. So, if you are really going to solve the energy problem holistically, Lagos is a place to start with.
What would likely be the price of deploying your solution to people who desire it?
We have not fixed and announced the price yet because we are still working at it. But I can tell you we expect that the product will be paid through the savings that the consumer can achieve. This product is about accessibility and affordability.
Lithium batteries are very pricey. Are you looking at scaling up to meet local demand? Also, are you looking at local production in the country moving forward?
At the moment, we don’t have the capacity to service the whole country. That is why we are starting with Lagos.
With regards to whether we would be opening up local production, we do that in other markets. So, Nigeria is not going to be an exception. We believe it would not only benefit us, it would also be of benefit to consumers and to the community that we serve. So, it would be a huge encouragement for us if we received support from government in Nigeria to do local assembly or production of these solutions. But a lot also depends on the ecosystem. But in a nutshell, we are 100% ready to set up assembly plant in Nigeria
Considering the level of income disparities in Nigeria in relation to the price, do you think the product is pocket friendly and affordable?
I think the answer is yes. I do believe the product is pocket friendly and affordable. For us, we develop a product line that meets energy use need with an affordable price point, although it may not be easy to find an entry point in term of pricing in this energy ladder. It is not a one size fit all kind of pricing for the solutions. Everything is basically dependent on what you need. We have developed it in such a way that consumers can use their savings to purchase the solution. It is not something that is far beyond reach for electricity consumers. So, as we speak, we already have some local partners such as banks that have shown interest in making the payment a lot easier for those who want to buy the solution.
What is the volume of investment we are looking at with the introduction of these solutions into Nigeria or how much is ZOLA Electric spending to facilitate this solution in Nigeria?
Having established strong presence in Africa, what I can say is that we are investing hugely in this market because we have pretty strong investors involved in this. We have Helios capital, which is arguably the largest private equity firm in Africa. Our second largest shareholder is Tesla. We also have GDO, the largest electricity generator in the world- a French utility. We have Total-one of the major energy companies in the world. In a nutshell, we have strong investors with deep pockets but they are also smarter.
They are interested in things that will deliver right returns, grow and be successful. My belief is that if we can execute and prove that we have the best solution, they would be more interested in putting additional capital. Conservatively, I can say that we are looking at investing billions of dollars in Nigeria. We have a solution that works and we believe we would improve the energy markets in Nigeria.
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