On November 7, a team of Wharton MBA students funded by the Kleinman Center took first place at Duke University's Energy in Emerging Markets Case Competition. The Wharton team outlasted a field of 34 teams in a competition that focused on renewable energy development in rural Kenya. Participants responded to two questions posed by MKOPA (a residential solar company operating in East Africa): “How should MKOPA adapt its business operations in Kenya with its off-grid solutions? What should the business model look like?”
Student teams came up with diverse proposals ranging from new product recommendations to unique business operating models. Beyond trying to make a profit, MKOPA serves an important role in rural Africa where there is poor access to the grid: Its solar home systems are the leading way to electrify rural areas in Kenya where more than 30% of Kenyans still lack electricity access. MKOPA has already sold nearly 500,000 solar home systems—predominantly in Kenya—so the solar home system market there is becoming increasingly saturated.
The Wharton team recommended a multi-pronged solution. First, they suggested that MKOPA expand its core business through new product lines and business model optimization. As rural Kenyans continue to become more electrified, MKOPA can maximize the opportunity to upsell additional products. Second, they recommended leveraging the company's brand recognition across rural Africa and find ways to provide products to consumers without being limited by lending capabilities. (Note: MKOPA’s current business model involves providing solar home systems to customers on credit. Rural Kenyans pay roughly 50 cents per day, the comparable price of lighting their homes with kerosene, until the system is paid off.)
Beyond expanding the core business, the Wharton team recommended that MKOPA start deploying solar-powered "smart villages," a community-based solution to not only provide electricity to rural Kenyans but also to improve their living standards. Each smart village would essentially be a large box (e.g. storage container) with solar panels on top and a battery underneath—providing a small amount of electricity to sterilize water for the local community and provide a host of other amenities.
The judges were particularly interested in the novelty of the team’s smart village concept and comprehensive plan, which included an estimate of energy consumption and an in-depth regional analysis to identify areas in Kenya to target first.
“I loved being able to take a deep-dive into one of the most pressing issues for rural Kenyans today—energy access," said team member Karl Chan, who had previously spent time in rural Kenya helping launch a school. "To this day, many [Kenyans] rely on kerosene lamps and diesel generators, which are neither cost-effective nor environmentally friendly.”
“I hope our collective work will contribute to increased energy security for rural Kenyans,” said Wharton team member Michael Alexander.
Interested in attending a conference or participating in a case competition? Learn more about Kleinman Center student grants.