ASEP-PVM PROGRAM DESIGN What Bidders Need to Know Ian Driscall World Bank Consultant +63 905 487 2185 idriscall@morvahconsultants.com

Project Goals Supply and install 40,500 Solar Home Systems (SHSs) in far flung rural households (HHs) unlikely to be reached by the grid Solar as Service (SaaS) model with two service levels (with/without TV or multimedia player) SHSs are owned by the Electric Cooperatives (ECs) Operation and maintenance by the ECs – who will collect a full cost recovery monthly regulated benchmark tariff Sustainability is all! Build international supply chains for solar products into the Philippines Encourage complementary CSR activities (e.g. additional systems, income generation, remote school/clinic etc. electrification) Develop commercial Solar Business Units in the ECs that extend beyond SHSs into appliances, pico systems and larger systems

Achieving Sustainability Quality Certification (LG, Li-ion batteries) Scale implementation Prepaid service delivery Dedicated Business Unit with strict NEA performance oversight Careful HH Market Segmentation

Bidding and Installation Process Feb/Jul 2017 start Jul 2017 onwards Plus 3 months Jan 2017 Feb – May 2017 Define Bid Lots Which ECs? Which HHs? Bid & Award Service levels? Technical specs? Qualified systems? Prequalification Two bidding windows Signup HHs Demo systems IEC & marketing Sign up HH as member-consumer and collect deposit Head start?? EC sweat equity needed! Supply & Install Winning bidder installs Validate & Pay Suppliers Independent verification Payment of supplier

Define Bid Lots – Which ECs? Scale has to be significant to sustain EC management’s attention 51,400 SHS

Define Bid Lots – Which HHs? Remote sensing (VIA) for rapid HH identification – consider: Clustered vs. dispersed? Ancillary buildings Statistical sampling for affordability Profile HH monthly income and energy spend Set cutoffs for each service level

Define Bid Lots – Which HHs, cont.? End of distribution network (SEP) – departure point Sample area

Getting to the Sample Area

Typical Households

Preliminary HH Survey Results (sample size =73) Need to include dispersed HH who can afford – so prepaid essential Ancillary structures factor = 44% Assuming 8% rural HH spend on energy, can serve 45% of HH at higher service level (Php 250/mo), another 10% at lower level (Php 200/mo) Seasonality of income is an issue Kerosene expenditures are suppressed by widespread solar/rechargeable lantern use – average Php 150/mo for 2.5hrs/day 60% of HH have radios (Php 20/mo for dry cells) 50% have cellphones despite poor signal (mostly for texting) – spend Php 90/month on load and charging TV is a game changer if HH can afford 10%: 50%, 65% 12%: 63%, 80%

Sign Up Households Sign up process includes: Intensive marketing and IEC – ideally with demo systems, presentations/videos in local language and poster leave behinds Confirmation of adequate year-round HH income to support the service level requested Need to handle rejection of some customers Final decision remains the ECs EC Member-Consumer orientation, registration and collection of Php 5 membership fee Collection of Php 250 customer contribution for SHS Registration (inc. geotagging) within the billing/vending system Timing of sign up yet to be decided - major task for the ECs – two options: Start sign up as soon as remote sensing complete (head start) Sign up in parallel with installation

Supply and Install Supply and install process includes: Delivery of systems to distribution points within large clusters Panel installation ensuring waterproof seal on roof Installation and testing of SHS module Customer orientation in module use

Next Steps Target ECs to identify off-grid areas for remote sensing End Sep 2016 Complete remote sensing End Dec 2016 Define bid lots by EC by service level Jan 2017 Decide how many ECs will be in the first bidding round (e.g. 3 X 5,000 or 7 X 2,000 with remaining SHS within an EC included in second bidding round Develop logistics plan for sign up / supply and install Feb 2017 Decide on timing of sign up process and begin sign up if it is to be done in advance

Thanks for listening! Questions please!