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Keeping the Light On investigates why customers who struggle to pay for 3 – 20 Wp Tier 1 Paygo Solar-home systems (SHS) without arrears fall behind on instalments in Kenya and Uganda.
The project, led by GOGLA with support from EnDev and RVO SDG 7 Results, started with an analysis of company portfolio data, which showed that non-payment of solar home systems (SHS) is a significant challenge, with 40% of customers in Kenya and Uganda struggling to pay for their PAYGo SHS. The likelihood that a customer will struggle to pay for their SHS increases over time. While only 20% of new customers (who have had a system for three months or less) struggle with payments, this figure doubles when they have had the system for between four to six months and continues to rise.
The project surveyed 2,602 customers from d.Light, Sun King and Engie, defined as those who paid less than 66% of the amounts due in the last 90 days, and conducted 12 qualitative deep-dive interviews in Q4 2024. Interviews with the management of several PAYGo solar companies complemented this primary research and were crucial in the recommendations design.
Financial constraints are the primary cause of missed payments. Only 33% of Kenyan and 29% of Ugandan customers who struggle to pay report having stable monthly income. In both countries, 40% of customers have other debts, further constraining their repayment.
Unforeseen climate shocks amplify payment difficulties among customers. Over 50% of customers in both countries reported that droughts, crop diseases, floods, and extreme heat affected their income.
The presence of alternatives and a lack of consistent need for the SHS lead some customers to skip payments. In Kenya, 27% of customers who skip payments have grid access, compared to 15% in Uganda. Customers connected to the electric grid tend to use their SHS as a backup solution. Additionally, around 10% of customers in both countries pay for multiple SHS simultaneously.
Technical issues with the SHS were common among respondents and could impact customer satisfaction, potentially leading to lower repayments. 49% of customers in Uganda and 28% in Kenya reported experiencing technical issues with their system at least once. While these issues did not prevent customers from using the systems, dissatisfaction with persistent unresolved technical issues can lead to non-payment.
Although customers appear to be satisfied with the customer onboarding/education, there is a gap in knowledge of contract terms. More than 50% of Ugandan and a third of Kenyan customers interviewed do not accurately know their remaining balance or the duration they still have to pay.
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Self-assess elements that contribute to good customer service
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To dive deeper into the PAYGo Performance, Reporting and Measurement (PERFORM) framework, adopt the KPIs and join the PAYGo PERFORM monitor
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Understand the opportunities and risks that could arise for customers, OGS companies, and others from linking companies to a formal Credit Reference System from a pilot study by EnDev in Uganda
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A Study of Repayment and Impact in the PAYGo Solar Market.
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