The Australian start-up Solar-Gem is setting out to address the enormous need in the developing world for affordable, reliable off-grid energy solutions. For Khimji Vaghjiani, CEO, it is almost unthinkable that there are surgeons in Africa who operate by candlelight when the hospital daytime generators switch off. Concentrating on rural and remote areas, Solar-Gem delivers solar solutions to schools, homes, churches, community centres, factories and hospitals. The technology can be installed without technicians, and has multiple applications. Most importantly, a close-to-market manufacturing strategy makes solar technology affordable for governments, energy providers and aid organisations working in the developing world. After only 12 months in operation, Solar-Gem is turning heads in Australia and beyond, winning trade awards and running extensive trials on the Indian subcontinent. Vaghjiani is an Indian-born, Australian-raised entrepreneur, whose previous work in the Innovation Department at Westpac prepared him well for a venture into innovative technology. "I wouldn’t give it back for working in a bank," Vaghjiani says. "I’ve always had a dream of taking a small Aussie company to the world, and that’s what I’m doing, I’m living my dream." The dream began "as all good business ideas do", in a coffee shop with a piece of paper. Vaghjiani and a friend realised that for the 1.6 billion people in the world that live without access to electricity after dark, there was an aching need for energy. The earning potential of a wide open, desperate market wasn’t lost on the entrepreneur, either. As Vaghjiani explains, once the sun goes down, communities without electricity burn wood or kerosene for light. But both options are costly, release noxious fumes and damage the environment. The World Bank estimates that the developing world burns almost $50 billion worth of kerosene for lighting alone. "If rural communities have light, they can work a couple of hours later or they can study in the evenings. There’s a social benefit, there’s an education benefit, and these things lead to prosperity over the long term," Vaghjiani says. While most new businesses struggle to develop an export market, Solar-Gem has units in more than 10 countries around the world. It has been enormously successful for its short time in business, selling units across Africa, the Pacific and the Middle East. Vaghjiani attributes this to a strong pull from market. "It’s just about commercialisation. It’s about taking technology to the market. We’ve matched my own contacts in a lot of these regions to the enormous need for the product," he says. "We’ve aggressively sold something that has enormous potential."
Finding a new niche
While the need for energy solutions in the developing world is not new, Solar-Gem has found a niche for their durable, affordable solar panels. The systems require no expertise to install, have a range of uses, and can be deployed very quickly, and each panel has a charging and billing system on board. Vaghjiani explains: "You can actually deploy it and charge people a few dollars at a time for usage. That’s something a whole lot our competitors don’t have." Transportable and impact resistant, some of Solar-Gem’s customers have found innovative uses for the products that Vaghjiani himself had not considered. The panels can be used to power water pumps; they could also power mobile charging stations in regions where mobiles are taking off, despite users having nowhere to charge them. Solar-Gem is in early talks with some international relief organisations about using the panels during disaster management. "Light is a really important aspect of the kind of relief effort you see after the Haiti earthquake or the Chinese earthquake," Vaghjiani says. "You can take our units, put them up and provide lighting for relief workers and communities during the night." Solar-Gem has attracted interest from eco-resorts in the Pacific and from overseas armies for use in remote military locations.
Locally, Solar-Gem units are being trialled at Calmsley Hill City Farm in Sydney. For exports to advanced economies in Europe and the Americas and sales in the local market, Solar-Gem will continue to manufacture out of their Sydney factory. Vaghjiani insists the intellectual property, research and development will stay in Australia. "But in the poorer regions we have to manufacture and assemble close to market. That way we also create jobs in those communities, which is a big incentive for governments." The company is now developing a global manufacturing strategy to ramp up production over the next six months. "At the moment, I can churn out 10,000 units a year in our Sydney factory," Vaghjiani says. "That helps with the US and Australian markets, but the cost of that won’t help me in the Indian or African market, so we need to assemble there." Working out how to manufacture close to market is the work of the next few months, according to Vaghjiani. "We’re now on the verge. The next two or three months will be really critical to grow the business, I’m seeing some very exciting times ahead for us." Solar-Gem is also in negotiations with the World Bank and has tendered for some AusAID projects in Fiji and Tanzania. If trials in India go well, Vaghjiani expects a large contract from the Indian government. The Australian business has been fortunate to attract a lot of support from Austrade and the New South Wales government. Vaghjiani is pragmatic about the reasons why: "Because we’re about the environment, we’re about social upliftment, and there’s an innovative business in there as well." Solar-Gem won the Australian Innovator of the Year Award earlier this year, and the accolade has helped the business attain a profile in overseas markets. The support of the New South Wales government has helped add credibility to the Solar-Gem name, Vaghjiani says, and their financial assistance was critical in the early stages. The business also picked up a Design Award in recognition of design excellence in the Architecture and Interior Products category at the 2010 Australian International Design Awards last month.
Dealing with culture
Vaghjiani believes his experience and contacts across so many cultures has been vital in gaining entry to overseas markets. "Cultural sensitivity is the most critical thing," he says, noting that each market has different cultural nuances, and being able to negotiate these with sensitivity can make or break a deal. Canada, the UK, and the USA take advantage of their multicultural communities in a way that Australia doesn’t. "We have to take advantage of our migrant population, and give opportunity in return to the melting pot we have in this country." The experience of Solar-Gem should ably demonstrate the economic benefits of exploiting cultural affiliations, Vaghjiani says. He hopes Solar-Gem can showcase the power of Australian innovation, and encourage young entrepreneurs to aim high. The Australian entrepreneur is focused and driven on the future. "We want to be an innovative solar company. We have a lot of skills in that area, we have amazing market penetration and capability in the regions we want to focus into," says Vaghjiani. He thinks renewable energy is having its day, and solar energy has its day coming. "It’s for real, it’s not hype. It is making a lot of difference to a lot of people in the world. We want to be a global solar player based out of Sydney, Australia, so we can say that a small Aussie company that started out in a coffee shop on a piece of paper can actually take on the world." In the Democratic Republic of Congo, surgeons that once performed open heart surgery by candlelight are now operating under solar lights. Vaghjiani is proud that Solar-Gem’s products are working towards the social upliftment of people all over the world. And with 1.6 billion lives to change, the market is wide open.