Sep 13, 2016
Tags: Energy, Tech Entrepreneurship, Impact Investing,
SparkMeter Ups Impact Potential Through Mobile Money Integration
Factor[e] portfolio company, SparkMeter, offers a metering solution to energy providers in underserved markets. We welcomed the company into our portfolio in mid 2014, impressed with the robustness and quality of data the low-cost meter collects, without the need for costly communications hardware. Now, SparkMeter has exponentially increased its impact potential by integrating an application program interface (API) that allows its software to accept payments through local Mobile Money apps. Energy providers can, using the company’s meters, accept payment from whatever Mobile Money application is popular amongst their specific customers. More than 200 mobile money providers offer services in over 60 percent of developing countries, and these numbers are expected to grow, according to a 2014 GSMA industry report on mobile financial services. By integrating mobile money capability into its metering technology, SparkMeter is better positioned to affect change for the millions in rural, grid-challenged communities.
Monitoring electrical usage in less developed areas has been fraught with problems: poor cost recovery, theft, and the often daunting and expensive task of physically reading meters, just to name a few. In some regions, the costs are so prohibitive that utilities simply choose not to offer services. And while microgrids are gaining acceptance as a means for providing electricity to remote areas, difficulties persist. Many microgrid developers don’t even use meters to track and bill for household electricity consumption due to the added expense. Instead, these microgrid operators charge customers a fixed monthly fee, a practice that can prove wasteful for the customer and the operator.
Years of working with microgrids and witnessing these problems firsthand is what led SparkMeter founders to come up with their new “smart meters,” which are designed to allow remote control for these microgrids as well as other utility systems. The low-cost meters are able to read a customer’s usage in real-time and send that data to the cloud, where it can be accessed via the Internet by operators working for the electricity provider.
SparkMeter’s new API lets customers pay their providers for electricity directly from their mobile devices. This means no more waiting in line at the utility office to pay their bills. Its increased transparency also reduces the likelihood of overcharging and eliminates incidents of bribing by local meter readers. Utility and microgrid companies, in turn, can create flexible billing structures to better service their customers. For instance, customers now have the option of prepaying for their utilities. In those cases, the smart meters not only track the amount of energy the customer is using, but also track how much of a balance each customer has remaining. This allows the utility to set a power cutoff limit, thereby maintaining reliability and reducing theft risk through increased control. For the customer, it helps protect against overspending and enables them to budget more accurately.
We are excited about the progress being made at SparkMeter. Since our investment, the company has made significant advancements in technology, resulting in both reduced product costs and the ability to serve larger networks. The have also entered new markets in Africa and India. We are confident that the new API and the Mobile Money capability it enables will significantly increase the value SparkMeter has to offer to both rural energy providers and their end customers.