What you need to know:
- They say that capital to set up a business should never hold anyone back because you do not necessarily need millions to set up a business - the little capital one needs can be easily put aside from savings and some sacrifice.
Standing on the shoulders of three 26-year-old men is Illumina Africa Ltd, a Kenya–based company that is focused on “key improvements in the energy value chain through innovations in technology, engineering, operational excellence and innovative finance solutions.”
With Rushab Haria as the CEO, Pulkit Shamshery as the Chief Technical Officer and Nikhil Shah as the Chief Operating Officer, Illumina Africa is set to revolutionalise the consumption of energy in Kenya and Africa through more innovative on and off-grid engineered solutions.
“We attended the same high school in Kenya, and when we left the country for university, we kept in touch. I was interested in the renewable energy space while Rushab was doing some stuff in the financial space. We brought our heads together to see if there was a market for solar energy in Kenya and we saw a huge opportunity - not only in terms of making money, but also the potential to make a huge impact in the lives of people by improving access to energy, water and food, through rural electrification and other off-grid projects that we are developing to reduce energy costs,”
Rushab studied Finance at the University of British Columbia, Pulkit his undergraduate and master of engineering in mechanical engineering at the Massachusetts Institute of Technology, while Nikhil studied international business at the University of Manchester.
Their solar energy applications target residential clients, commercial and industrial clients, agricultural, utilities, telecom and rural communities through mini grids with better productive uses.
The first step of their projects is to identify where green energy is required, for instance due to high production costs, going green, unreliable power, or electrifying rural communities.
The second step involves getting in touch with the potential client or community, after which they carry out an analysis which includes a detailed engineering report and feasibility study of the project. From that information and data, they do an analysis using their software, financial models and structural simulations which guide them towards the final design and BOQ for each project.
After this they move to the design and engineering of the project.
It has to be customised because it looks at the client’s requirements in terms of power, for example, do they need any sort of energy storage, and if they do, what energy storage system and what sort of batteries do they need?
One of the findings of Pulkit’s research during his Master’s programme, which was in solar and drip irrigation, was that Kenya is one of the countries with the highest cost of electricity in Africa, which meant that solar energy has a huge potential in reducing the cost of electricity and also a huge potential of diversifying the energy mix through decentralised electrification throughout Kenya and the Sub- Saharan Africa, at large, where they intend to expand to.
DON'T LET CAPITAL HOLD YOU BACK
They say that capital to set up a business should never hold anyone back because you do not necessarily need millions to set up a business - the little capital one needs can be easily put aside from savings and some sacrifice.
“I worked for a while in banking in Vancouver, (Canada) after I saved some money I took a risk and left banking,” says Rushab, who advises those keen on setting up a business to take up the best job they can find, even if one does not like it, save money and then leave to start their business.
Pulkit too saved his share of the capital the trio used to set up their business – the money came from a “stipend” he got while doing research at MIT, where he was studying.
Nikhil agrees with his business partners that capital need not stop you from starting a business.
“I saved from my previous work and previous investments. In the solar space, as with many other businesses, you do not really need a lot of capital to win your first project, when you execute the first project, invest in the right places and grow your team” says. How big is their team?
Illumina Africa has been in operation since early 2017, and during this period, they have done 50 residential installations and seven commercial installations. This translates to 300 kilowatts worth of confirmed projects with about 3-4 MW in their pipeline. They are also engaged in large scale storage projects for businesses that are either off-grid, experience many outages or have large revenue losses when power goes off, for instance processing plants.
“The projects are high value, so it takes a long time to finalise them - it can take up to eight months to do the ground work for the setup of the project. Depending on the size of the project it can take up to one year to wrap up the project - some projects we are working on now will probably go live in another one or two years’ time,” explains Nikhil.
“You have to sell to the client the technical feasibility, financial returns and so on. For example, to get the number of installations and potential installations that we have now, we approached approximately 100 companies and carried out a full energy analysis.”
They peg the success of their business so far on belief on their product, service and ability.
“We are also customer-focused, honest and transparent – a good reputation is priceless in business. We are also aggressive when it comes to sales,” Rushab further explains.
They note that many factors determine what the cost of a solar project, these include how much energy is consumed, the size of the house (in cases of residential installations) and what the energy is used for. The easiest way to estimate the cost is by looking at the payback cost and duration.
“For a residential which requires batteries, the payback is anywhere from six to eight years, If your costs are Sh20,000 per month for instance, the cost could translate to roughly Sh1.7M,” explains Pulkit.
But this is all dependent on how much energy is required, as well as the solar solution - hybrid or grid-tied. The payback period what is this? for a commercial grid-tied installation is anything between four and five years, a shorter period, because these installations do not require batteries.
SOURCING FOR CLIENTS
They get their clients through reaching out to extended networks and through word of mouth.
“Leverage your networks. Sometimes we go out there and cold call people. It was not easy, especially with our first project. Introductions happen as you go on. At the beginning, you have to chase these opportunities,” says Rushab.
They also note that collaborating with other people in your field helps you grow and understand the field better.
“Collaborations with other who are really good in their field is important. Sometimes you might think that someone is your competitor when there is actually a way that you can work together.”
They are talking from experience, since they have built strategic partnerships with companies such as H Young, WAAREE, Ezeetec Limited and Schneider Electric, and others in the energy and water field.
They have built their work ethic and corporate culture around successful companies such as Facebook, Google and Amazon.
“Customer focus, first principles reasoning and integrity are the epicentre of our core values. We spoke to people who understood the landscape better because setting up a business here can be quite a convoluted process - having mentors and aligning with regulatory bodies helped. There is always a way to find out what is expected of you,” Pulkit says.
Illumina Africa are open to students and other young people who have passion in any part of the business to learn from them through internships.
If interested in this field, what more encouragement do you need?