September 29, 2015

A Huge Leap Forward is possible for the bottom 2 billion people within 5 to 10 years

This article is part of the 2015 ‘Think Further’ series, sponsored by Fred Alger Management, Inc. For more ‘Think Further’ content and videos, visit

A Huge Leap Forward is possible for the bottom 2 billion people within 5 to 10 years.

Two thirds of the rural population in developing countries are without electricity. This leaves limited options for lighting.

Many turn to kerosene or paraffin oil. It was estimated that 88 billion liters of kerosene are burned purely for light. One liter of kerosene is estimated to produce 3kg CO2 when burnt. On average, rural households in five Sub-Saharan countries covered in the study pay 35% more for kerosene than their urban counterparts. The price differential was most stark in Ghana, where kerosene in rural areas retailed at 170% the price in urban centers. In Kenya, kerosene in the villages costs 46% more than in pump stations in urban areas.

Research has shown that basic oil lamps typically produce just 1% of the light of a 100W light bulb.

A $13 solar lamp in rural areas would pay for itself in about 5 months compared to the previously estimated 8 months, enabling families to enjoy cleaner, safer, higher quality domestic lighting sooner. Actually estimates 3 years ago was higher at 11 months because the solar lamp would have cost $20. Two 20 lumen solar lamps are now $10 each and in packs of 48 would be $8.

The total number of people across Africa now benefiting from solar light is estimated at around 50 million. There are over half a billion people in Africa still reliant on dangerous and very poor light sources like kerosene. Releasing black carbon into the environment, kerosene lamps pollute the air inside homes, resulting in health problems such as lung and eye diseases. Not only producing dim light which is inadequate for work or study, wounds and fatalities often result from the open flames of kerosene lamps.

The benefits of one solar light include:
● Improving the lives of around 6 people
● Saving a family £130 (~$200)
● Enabling an extra 1200 hours of study
● Averting half a tonne of CO2

Furthermore, this research concludes the following, based on the lifetime of a solar light:
● 10 million people currently have access to a solar light
● 9 million of whom live below the World Bank $1.25 p/d poverty line
● Families will save £200 million (~$309.19M)
● 2 billion extra study hours will be created
● 900,000 tonnes of CO2 averted
● 6 million people experiencing better health from reduced indoor air pollution
● 1 million kerosene lamps packed away

Technological improvements in

* lowering the cost of LED lights
* lowering the cost of solar power
* increasing the brightness of LED lights
* increasing the power from solar power
* increasing the production of portable solar and LED lights

By 2017-2020, the $5-20 per person could provide lighting and electrical charging and basic electrical needs for every person in the world.

$30 billion to provide $20 of LED lighting and solar power to the 1.5 billion who would not have basic electrification through other means.

Fairly full featured smartphones cost under $50 in China now. By 2017, a $20 smartphone will be more capable that that $100 phone now.

$72 billion would be the cost of two years of kerosene spending to fill the basic electrification, lighting and communication gap.

Google, Facebook and other companies are deploying internet drones and satellites. Google is deploying internet balloons.

Smoke free cooking and lighting would eventually prevent 3.3 million deaths per year from indoor air pollution. It would also improve health. Having electricity to help enable clean water and reduce food spoilage would improve health and save 10-15 million lives.

Basic electrification and cooling means keeping vaccines and medicines cold. This would also save millions of lives.

Another step beyond be 100 watt panels. These are sold on Ebay for about $120 but could be had in volume from China for about $50. 100 watt panels provide about 120 kilowatt hours per year of power. A basic developed country has 2000 kilowatt hour of power per person.

Africa and poorer parts of Asia could also follow the development path that China had with Electric bikes for enabling greater mobility.

Low costs drones could enable package and other deliveries before more expensive infrastructure.

This deployment of modular power and lighting and batteries could be done within 5 years with focused effort and assistance. There are already World Bank programs targeting 2030 but the technology is here and getting cheaper but is already cheap enough.

The people might still have lower income but they could get more for less cost and enable them to get to the starting point of
basic electrification
communication (internet, data and voice)
safe lighting
safe cooking
safer water
better medicine

Videos in the Alger Series

This would be hugely disruptive for them and would enable elimination of extreme poverty.

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