The challenge of making clean cookstoves available
Posted: Wed Feb 12, 2025 7:11 am
Further complicating this debate, transitioning populations to clean fuels is enormously challenging for the following reasons:
Affordability: Clean fuels tend to cost more than polluting alternatives, which often have zero monetary cost in areas where firewood can be gathered for free. On top of this, switching fuel also requires people to incur the up-front cost of purchasing new equipment. And LPG — the most commonly used clean fuel in developing world settings — almost always needs to be purchased in bulk, which can be incompatible with the day-to-day expenditures of poor people.
Availability: Making clean cookstoves available requires alternative fuels to be supplied to communities. This raises multiple supply challenges, which can be particularly difficult to overcome in remote areas.
Sustained adoption: Clean stoves are often used as ancillary devices that supplement traditional fuels. Research has shown that anything short of exclusive use negates most of the health and environmental gains of clean cooking. Changing this behaviour is a complex process that involves altering cultural practices and acquiring new skills.
These barriers must be overcome in order to make cooking with clean fuels viable at scale. Some countries (e.g., Indonesia, India and Peru) have addressed them through policies that subsidise LPG equipment and fuel. However, such programmes are expensive and unlikely to be financially viable in many markets, including much of sub-Saharan Africa.
The emergence of pay-as-you-go clean cooking business models
Some promising solutions are emerging in response to these challenges. Inspired by the solar sector, the past few years have seen a number of PAYG cooking providers enter the market. These companies supply a range of clean fuels, such as KOKO Networks with ethanol, Circle Gas, Bboxx and PayGo Energy with LPG, BioMassters with biomass pellets, and ATEC with a range of electrical devices. Their underlying business models are broadly similar and rely on new innovations (e.g., PAYG smart meters for LPG) that allow customers to buy fuel in small quantities, thereby matching the purchasing patterns of polluting alternatives. Payments are made via mobile money to maximise convenience, and the upfront cost of the stove is often either included in the fuel price charged to consumers, or subsidised by carbon credits that the business sells to external funders.
Companies that use the PAYG model typically provide warranties to ensure the long-term functionality of their equipment, and they often deliver fuel replenishments directly to households. PAYG thus helps low-income australia whatsapp number data households to transition to clean cooking by:
Reducing the minimum transaction size for purchasing fuel;
Increasing the up-front affordability of clean cooking; and
Solving availability issues by placing the onus on the provider to ensure fuel availability and equipment functionality.
PAYG models are intrinsically customer-centric, as their revenue is derived from ongoing fuel sales paid for by the user rather than one-off purchases that leave the provider with no understanding about how (or whether) the product was used. These fuel sales create large, granular data sets containing detailed insights about technology use. This allows providers to track customer adoption, with two important consequences: 1) they are able to identify customers with low levels of adoption and are financially incentivised to drive higher levels of clean fuel use among these customers; and 2) they can more accurately verify and monetise the impacts their stoves are making (e.g., through carbon credits or results-based financing schemes).
However, these added benefits come at a cost. Providers may need to add high margins to cover the additional technology and services that are needed to enable the PAYG functionality. This is certainly the case with PAYG LPG, which can be 1.7 times more expensive than standard full-cylinder LPG on a per kg basis. Also, PAYG business models are inherently difficult to make work; they require high levels of scale to compensate for their low profit margins, and often involve financing expensive equipment, which necessitates large sources of capital.
Affordability: Clean fuels tend to cost more than polluting alternatives, which often have zero monetary cost in areas where firewood can be gathered for free. On top of this, switching fuel also requires people to incur the up-front cost of purchasing new equipment. And LPG — the most commonly used clean fuel in developing world settings — almost always needs to be purchased in bulk, which can be incompatible with the day-to-day expenditures of poor people.
Availability: Making clean cookstoves available requires alternative fuels to be supplied to communities. This raises multiple supply challenges, which can be particularly difficult to overcome in remote areas.
Sustained adoption: Clean stoves are often used as ancillary devices that supplement traditional fuels. Research has shown that anything short of exclusive use negates most of the health and environmental gains of clean cooking. Changing this behaviour is a complex process that involves altering cultural practices and acquiring new skills.
These barriers must be overcome in order to make cooking with clean fuels viable at scale. Some countries (e.g., Indonesia, India and Peru) have addressed them through policies that subsidise LPG equipment and fuel. However, such programmes are expensive and unlikely to be financially viable in many markets, including much of sub-Saharan Africa.
The emergence of pay-as-you-go clean cooking business models
Some promising solutions are emerging in response to these challenges. Inspired by the solar sector, the past few years have seen a number of PAYG cooking providers enter the market. These companies supply a range of clean fuels, such as KOKO Networks with ethanol, Circle Gas, Bboxx and PayGo Energy with LPG, BioMassters with biomass pellets, and ATEC with a range of electrical devices. Their underlying business models are broadly similar and rely on new innovations (e.g., PAYG smart meters for LPG) that allow customers to buy fuel in small quantities, thereby matching the purchasing patterns of polluting alternatives. Payments are made via mobile money to maximise convenience, and the upfront cost of the stove is often either included in the fuel price charged to consumers, or subsidised by carbon credits that the business sells to external funders.
Companies that use the PAYG model typically provide warranties to ensure the long-term functionality of their equipment, and they often deliver fuel replenishments directly to households. PAYG thus helps low-income australia whatsapp number data households to transition to clean cooking by:
Reducing the minimum transaction size for purchasing fuel;
Increasing the up-front affordability of clean cooking; and
Solving availability issues by placing the onus on the provider to ensure fuel availability and equipment functionality.
PAYG models are intrinsically customer-centric, as their revenue is derived from ongoing fuel sales paid for by the user rather than one-off purchases that leave the provider with no understanding about how (or whether) the product was used. These fuel sales create large, granular data sets containing detailed insights about technology use. This allows providers to track customer adoption, with two important consequences: 1) they are able to identify customers with low levels of adoption and are financially incentivised to drive higher levels of clean fuel use among these customers; and 2) they can more accurately verify and monetise the impacts their stoves are making (e.g., through carbon credits or results-based financing schemes).
However, these added benefits come at a cost. Providers may need to add high margins to cover the additional technology and services that are needed to enable the PAYG functionality. This is certainly the case with PAYG LPG, which can be 1.7 times more expensive than standard full-cylinder LPG on a per kg basis. Also, PAYG business models are inherently difficult to make work; they require high levels of scale to compensate for their low profit margins, and often involve financing expensive equipment, which necessitates large sources of capital.