Powerstove

Three billion people around the world still use traditional and polluting cookstoves using fuels like firewood, charcoal and cow dung to cook and heat their homes, leading to serious indoor air pollution (IAP). The estimated health, environmental and economic cost of the continued use of this practice is staggering and estimated at over $123 billion every year according to World Bank. In Bangladesh, exposure to IAP results in nearly 107,000 deaths every year, mostly women and children, who also bear much of the burden of collecting firewood or other traditional fuels.

Powerstove designs, manufactures and distributes a low-cost, clean cookstove that burns biomass like gas and self-generates 50watts of electricity to charge phones and light LED bulbs. The Company also produces biomass pellets which costs 80% cheaper than firewood, charcoal and kerosene and cook foods twice longer (without smokes) than any available biomass fuel, hence saving each user $300 annually.

More than 41 percent of households in Bangladesh still rely on firewood as the main cooking fuel. In most household, collecting firewood, dung, leaves and wood residues falls squarely on women and girls’ shoulders. By virtue of their roles, the burden of indoor air pollution (IAP) is disproportionately heavier on women, girls and children.

While the constitution and the courts of Bangladesh recognize that the right to life encompasses the right to clean air, the implementation and enforcement of this right remain a challenge. Yet without the opportunities and resources to exercise these rights and influence decisions and policies alike, women and marginalized communities continue to remain vulnerable to indoor air pollution. The traditional clay stove, the chulla, in a badly ventilated kitchen causes respiratory organ discomfort and persistent coughs. Currently it cost 400–500 takas [US$4.75–US$6] to buy and install a new cookstove. Yet, many take a loan because they could not afford it. Yet, for what can seem as a straightforward solution to tackle IAP, there continue to be hurdles in realizing its impact. While the market is now flooded with flimsy and cheap options, investing in good quality, improved cookstoves can still be a costly proposition. 

According to Bangladesh Bureau of Statistics 2012, 80% people live in rural areas and 20% in urban areas resulting almost the same household percentage. Biomass accounts for 68% of primary energy consumption, and around 90% of household energy needs which indicates that only about 10% of Bangladeshis have access to modern fuels. Significant amount of energy is required for the household activities but the amount of energy consumption can be reduced by using Powerstove advanced cooking system. Significant amount of research & development has been done of Powerstove which is environment friendly and cause no health hazard. If we can replace the traditional stoves with Powerstove a lot amount of energy can be saved. This will minimize the black carbon emission to the environment and also minimize the health hazard from indoor air pollution. Powerstove will work closely with local village level influencers and early adopters to create awareness on Powerstove- this leads to increase in adoption. Women will form a part of the supply chain-generating an income- that helped them move out of poverty while implementing a multi-level awareness creation campaign through village meetings, rural folk songs, rural product display, exhibition etc. This helps in local adoption across villages.

Powerstove designs, manufacture and distributes a smokeless biomass cookstove that cook foods 5x faster than traditional stoves using 70% less biomass to self-generate 50watts of electricity to charge phones or power LED bulbs through the built-in USB and DC port. Powerstove pioneered a patent-pending built-in IoT System in the cookstove that supports Pay-As-You-Cook Financing option for BoP families through a 2G/3G network and also allows real-time monitoring of CO2 prevented, black carbon saved and electricity generated. Powerstove users can also receive carbon funds directly into their mobile money accounts anywhere in the world based on stove usage and GHG mitigation.

Powerstove is based on TLUD, fan-assisted technology that self-generates electricity using seedbeck effect which powers the IoT System that controls all the electrical systems of Powerstove including charging of the Lithium-ion battery using Pulse Width Modulation principle. Also, the IoT controls the cooling fan that supplies the right amount of Oxygen into the combustion chamber for clean combustion of biomass pellets through self-regulated switching system. This Airflow System ensures complete combustion and 70% savings on biomass pellets.

Also, the IoT System is responsible for metering the usage of the stove by receiving encrypted control messages from the base server over the cellular network and at the same time sends data to the base station server using HTTP/FTP protocol over the GSM/GPRS network for analytic purposes. This provides real-time data, helping users receive usage-based deposits (up to $100/year) to their mobile money accounts based on carbon emissions they prevented by cooking with Powersove.

Finally, the Powerstove proprietary Biomass Zylerobic technology is a thermal process used to produce high-grade solid biofuels from various streams of woody biomass or agro residues. The end product is a stable, water-resistant, homogeneous, high quality solid biomass pellets with far greater energy density and calorific value than the original feedstock, providing significant benefits in logistics, handling and storage, as well as opening up a wide range of potential uses.

Our biomass pellets called Goodlife Pellets sells as the cheapest cooking fuel in Nigeria and can also sell 80% cheaper than other cooking fuels (charcoal, firewood, kerosene, cooking gas) in Bangladesh. At $0.2 per kilo, a house of 4 can comfortably use our Goodlife Pellets to cook for 2 days, hence saving low and resource-poor families opportunities to save $300 annually, which can help them to improve their household nutrition, afford basic healthcare and children's education.  

Powerstove self-generates electricity, allowing people without access to grid electricity to charge their phones for free, reducing their energy costs and increasing their access to ICTs. Providing basic electricity to those who live off-grid not only has benefits at the household level, but also at the level of national development policy.

Also, Powerstove is the world's first clean cookstove with built-in self-powered IoT cloud base remote system for improve monitoring that allows rural women to receive cash payments for their measured use of Powerstove and carbon mitigation. We also reduced the cost by 70%, making it more affordable. Let me explain how briefly, StoveTrace is an IoT device that is attached to a clean cookstove to monitor cooking behavior, but it costs around $120 per unit and when it is fitted to a $90 clean cookstove that brings the total cost to $210, which is way beyond the reach of BoP users. But Powerstove combined these technologies, improved and lowered the acquisition cost to $70 (↓67%).

Furthermore, Powerstove created Data-Enabled Climate Financing (DCF) after we discovered that many clean cookstove distributors keep the rewards of carbon mitigation to themselves, for instance as a way to subsidize the cost of improved cookstoves. But we strongly believe that getting the financial rewards of carbon mitigation directly to the women who cook has both strategic and moral benefits. This approach closes the loop between the woman changing her cooking behavior and the market-motivated climate credits generated by CO2e reductions from clean cooking.

Our Five Step Theory of Change

Stage 1: Catalyse

In 2017 Powerstove started analysing the issue of inefficient cooking in developing countries. Burning biomass fuels such as firewood, waste and charcoal has major ramifications on health, and income for the poorest families and the environment. 

Stage 2: Pilot

Between 2017 and 2018, Powerstove conducted nine pilot projects across seven communities to understand varying cooking technologies, business models, and customer needs. None met customer desires for affordability, high performance and durability. Nevertheless, the market knowledge gained proved invaluable and informed the creation of Powerstove in 2018 and the evolution of a new business model.

Stages 3 and 4: Create Pioneer and Scale

In 2018 we formed Powerstove Energy, to build a clean cookstove business that targeted financial viability and scale from the outset. Powerstove’s engineers pioneered a new cooking technology to produce affordable cookstoves that are efficient, durable and desirable, and are adapted to suit the cooking preferences and fuel choices of local customers – delivering cost savings and health benefits.

Stage 5: Tackle Market Barriers

Despite great products, Powerstove struggled to gain traction in the marketplace– and growth was far slower than projected. Around 2019, we uncovered major structural barriers that affected the scale-up like rural distribution, consumer financing, low product awareness and a significant lack of working capital. Powerstove partnered with different national/local NGOs to tackle these barriers to growth at an industry level. Today, Powerstove have grown from an initial pilot in rural Nigeria to an international business. 

We have sold more than 20,000 Powerstoves across Nigeria to 18,700 women, 1,200 to men and 100 to restaurants. In the next 12 months, we hope to expand the number of our users to 120,000 based on our current factory and global expansion. By the year 2024, we hope to reach 1 million users.

In the next 12 months, Powerstove Energy plans with the support of Tiger Challenge to establish a factory in Bangladesh that will be used as a hub to reach 1 Billion population that relies on charcoal, firewood, dungs and wastes  for cooking and heating across India, Pakistan, Myanmar, Nepal and Indonesia. This Powerstove ambitious plan of reaching 1 million within 5 years is anchored on launching our Powerstove Kits in Bangladesh factory.

Powerstove Kits is ready-to-assemble model of the cookstove which will allow us to export our product to Southeast and Southern Asia countries through Bangladesh, then train our local partners on how to assemble the product with minimal resources. Most of our partners in this regard, shall be local women owned or led organizations and organizations managed by physically challenged persons. Powerstove Kits will help us overcome the challenges associated with high cost on freight, custom duties, local transportation and taxes while making our costs competitive in local markets.

Within 2 years we'll sale 482,000 Powerstoves across Southeast and Southern Asia benefiting 2,410,000 people (given average household in these Region are 5 people). After 2 years of post-launch in Bangladesh, the number of local jobs we will create include 42 Senior Level Management, 120 Junior level Staff, 550 Women Distributors, and 80 Female Technicians. These planned 482,000 Powerstoves will save households over $144,600,000 (which averagely $300 savings per Powerstove) giving the chance for many to pay school fees, start a business, pay health-related costs or simply save for a rainy day.

Experience revealed seven main variables that may affect accomplishment of Powerstove Energy goal for the next year and also for the next five years include: economic factors, socio-demographics; fuel availability; attitude toward technology; awareness of the risks of traditional cooking stoves and the benefits of Powerstove; location; and social and cultural influences. However, the effect of each of these variables on Powerstove adoption may differ according to context.

Economic Factors

Economic factors represent a major barrier influencing Powerstove adoption. Powerstove partners with Microfinance Banks and NGOs to provide access to credit, and Pay-As-You-Cook financing that increase product adoption.

Socio-Demographics

Socio-demographics influence Powerstove adoption. However, our education on both male and female headed household population seems to play a major role in increasing modern fuel consumption and at the same time reducing biomass use.

Fuel Availability

We created Village Level Entrepreneurs who serves as last mile distributors to distribute biomass pellets in rural communities and ensure fuel availability round-the-clock.

Attitude Toward Technology & Awareness of the Risks of Traditional Cooking Stoves and the Benefits of Powerstove emerged as a factor influencing the adoption. Powerstove conducts community awareness about the negative health and environmental impacts of traditional stoves to reduce such a negative effect.

Location: Urban Versus Rural

Households located in rural areas are less interested in adopting cleaner fuels because of the easier access to alternative biomass sources that are cheaper, whereas in urban and suburban areas the rate of product adoption is considerably higher. However, our cooking fuels are not only cheaper but Powerstove created incentives on using her cooking fuels to avoid fuel stacking.

Social and Cultural Influences

With regards to social influences, Powerstove use local influencers to encourage interpersonal communication (i.e., word-of-mouth) among women which has been a primary persuasive tool to adopt Powerstove. Also we encourage product users to tell their neighbors which not only support social influences, but also culture that affects cooking choices.

Around 80 percent of Bangladesh’s population relies on solid fuel for their household cooking and heating needs. Reliance on biomass for cooking and heating leads to environmental degradation from increased pressure on local natural resources and forces women and children to spend many hours each week collecting wood. As the forests depletes because of demands for fuelwood, the cost of cooking fuels keeps increasing. Over 138 million people in Bangladesh needs alternative cooking to traditional choolah that is affordable, available, accessible and adaptable to their everyday cooking needs.

However, the government has responded swiftly to support the steady advancement in transforming the cookstoves and fuels sector in the past five years, with the implementation of a 10% reduction of import duty on improved cookstoves, making cooking technologies more affordable to consumers. But the final users still complain that the price is still not affordable.

Hence, Powerstove proprietary technology and lean manufacturing strategy produces clean cookstoves and fuels locally at the highest quality with the cheapest selling price, which will be procured locally and results in more jobs.

64 people in Powerstove Energy in total. Management 6, IT 3, Operations 4, Marketing and Sales 11, Production 9, Transportation 9, Part-time 22 (Distribution & Sales)

Our team is comprised of a diverse and complementary group of experts with 55 years of combined experience spanning across different verticals. Okey is a Physics Electronic graduate that conceptualized the idea and before founding the company has founded 3 other successful companies. Abdulbasit is a graduate with practical experiences on Hardware, Software and IoT. He built our IoT system from ground zero. Glory is renowned for her sales and marketing prowess; she can sell ice to an Eskimo and is the brain behind our growing revenue Month-on-Month. Peace handles all financial transactions and have being working with SMEs as a chartered accountant for the past 9 years. Julie uses her Human Resources experience to manage the workforce to avoid clashes and in-fighting that will obstruct flow of operations as well as recommend reward packages for deserving staff and welfare benefits.

Fortis Microfinance Banks: Providing consumer financing to target users through credits, and loan packages that have increased adoption.

Passionate Care Foundation: Identification, training and business support services to Village Level Entrepreneurs mostly women that serve as our last mile distributors.

Gorgeous Card Network: Provide IT-related support services in incentives (like Points and Rebates) to users and distributors.

National Union of Teachers: Providing over 5 million members opportunities to buy Powerstove through Pay-As-You-Cook financing package  

Powerstove business model is B2B2C. We sale and distribute Powerstove to Cooperative Societies, NGOs and CBOs for them to offer the products to their member under asset finance agreement with 3-6 months repayment plan. Using Cooperatives, NGOs and CBOs instead of banks/MFIs has a number of benefits: interest rates are usually lower than those charged by banks or MFIs; repayment terms are often longer; similar to developed markets, customers find reassurance in dealing with one entity; and, for clean cookstoves product like Powerstove, the comfort of having a warranty and after sales service package is an important consideration. This alignment of incentives is key to the success of upscaling our market penetration. The Cooperatives are incentivized to ensure adequate after sales service to motivate payments of the credit installments by their members, and the user is incentivized to maintain payments because the Cooperatives can repossess the asset.

In rural communities, we setup, select and train Village Level Entrepreneurs (VLEs). These people are local micro entrepreneurs that are trusted in their communities as last mile distributors mostly women. We provide weekly capacity building for VLEs like: organizing marketing, finance and business development training; facilitate cross-community learning; provide mentors. To limit risk and ensure continuous demand, we bundle our products (Clean cookstove and Biomass Pellets) and provide financial support to increase capacity of VLEs.

Powerstove Energy has cumulative profit margins of 55% across all products and this margin has proven sufficient to manage organic growth of the company. However, growing organically is sometime perceived as slow considering yawning market needs of the products. Hence, as part of her expansion plans, Powerstove Energy will open Series A Funding Round in 2020 to funding expansion across Sub Saharan and South Asian markets and harness the market opportunities of first mover advantages that enable us reaching 1 million homes before 2024 target.  

One of biggest barriers to product adoption is engaging and training Village Level Entrepreneurs (VLE) who serves as last miles distributors. VLE serves not only as last mile distributors but also as marketers, product promoters, community influencers, feedback responders, store keepers, sales agents etc. VLE is the nexus of product adoption. But identification, selection and training them demands lots of investments and most of these funds are not immediately recovered so using our profits to train and empower them deplete our meager resources and hamper spending more on other business needs. However, with Tiger Challenge funds and investments we can scale engagement of VLEs faster in terms of numbers and quality which will contribute to geometric rise in our revenue projection for 2020.   

Infrastructure Development Company Limited (IDCOL) Bangladesh, Ministry of Power Bangladesh and National Science Foundation