Tackling energy poverty the Nokero way

February 2016

By Catherine Jewell, Communications Division, WIPO

One in five people (some 1.3 billion people) still live without access to electricity. Many rely on kerosene, an expensive poor-quality and polluting lighting source, to illuminate their homes at night. For the past six years, Steve Katsaros and his team at Nokero – which stands for “no kerosene” – have been tackling energy poverty. By developing and distributing low-cost, eco-friendly solar-powered lights, US-based Nokero is transforming the livelihood opportunities of resource-poor householders in developing countries. So far Nokero has distributed over 1.4 million lights across 120 countries. In October 2015, the company launched its latest innovation, the N233, which has been billed as “the most efficient light bulb in the world”.

Nokero was a 2013 winner of the Patents for Humanity competition run by the United States Patent and Trademark Office (USPTO), which recognizes patent owners and licensees for their efforts in addressing development challenges.

Nokero’s founder, Steve Katsaros, explains how he came to set-up the company and the role intellectual property (IP) rights play in enabling it to provide a more sustainable alternative to kerosene lamps.

What prompted you to set up Nokero?

I was practicing patent law in the United States as a US Patent Agent at Cochran Freund & Young LLC and happened to come up with the original version of the solar light bulb. At first, it was just a product idea with no particular ambition to solve energy poverty, but within four days I realized this was the solution for the 1.3 billion humans living without electricity. From that point, the entire product and business was aligned with bringing light to the furthest reaches of the globe.

Equipped with Nokero lamps, children in a village near Victoria Falls in Zimbabwe, have a good source of lighting and can study for up to four hours after dark (photo: Nokero Intl. Ltd.).

Can you outline some of the negative impacts of kerosene lighting?

Where to start! To begin with, the poorest people in the world are spending around 20 percent of their income (totaling some USD30 billion per year) on kerosene for lighting – a practice that limits their ability to invest in education, agriculture and improving their dwellings. Those who burn kerosene because they do not have access to electricity are vulnerable to injury and death by fire. The risk of fire-related deaths increases by a factor of eight when using kerosene. Kids also accidentally drink kerosene, which is commonly transported and stored in discarded soft drinks bottles. The carbon emissions associated with burning kerosene have also been directly linked to climate change.

Why did you opt for the social entrepreneurship model?

When I started Nokero, I explored both the non-profit and for-profit models. After some thought, I decided the for-profit path was more aligned to my entrepreneurial beliefs. While I wasn’t familiar with terms such as “social entrepreneur”, “impact inventor” and “triple bottom line”, I knew that profit attracts scale, and bringing a safe and affordable source of light into people’s lives meant we needed to scale things up as fast as possible. So my primary goal was to create a company. Its brand was our mission – “no kerosene”. Just six days after we launched, our story was picked up by CNN’s reporter Ali Velshi and that sent us into orbit.

How is the company funded?

Nokero is funded privately by a group of investors. Our biggest markets are in Southeast Asia and Africa, but we are seeing strong growth in Central and South America. So far we have sold some 1.4 million solar lamps in 120 countries.

What impact are Nokero lamps having on resource-poor households in developing countries?

Our lamps are expanding the livelihood options of people in resource-poor households. So far, by replacing kerosene lamps, we have been able to greatly improve the safety and financial situation of around seven million people. Our sector generally believes that five people benefit from every solar lamp that is distributed.

Let me give you a few examples from among those millions of people.

Etienne Ellisime, who lives in Les Anglais, Haiti, is a rent-to-own customer. She was able to save 5 Haitian Gourdes (HTG) (equivalent to USD0.12) per night using a Nokero light instead of kerosene to illuminate her small house. In one year she saved over USD40. She likes the lamp because in addition to saving her money, it is brighter, cleaner and safer than kerosene.
Mpisi Melusi Ndlovu, who comes from a village near Victoria Falls in Zimbabwe, has provided lamps to children in his community. They no longer have to share a single candle between them but can now study for four hours after dark.
And Agatha NyaNyapoloto in Swaziland has been using her Nokero lamp for years to do her daily chores at night and to socialize with neighbors who don’t have electricity.

How do you get your bulbs out to those that need them?

We have two specific pathways for distributing our light bulbs: AID-channels and PAID-channels. With AID-channels, the lights are purchased on behalf of the people who need them but cannot afford them, for example, through philanthropic outfits or non-governmental organizations. Our PAID-channels cover traditional reseller networks where everyone in the supply chain receives a margin. Our lowest cost product retails at USD5.99 and the most popular lamp retails for USD14.99. The wholesale price is roughly half the retail price.

What role does intellectual property (IP) play in the company?

Patents are a big part of our business strategy. As a US Patent Agent, I have paid close attention to protecting our IP. For example, we put a great deal of effort into developing the functionality and design of our products. Design and utility make a product, and a successful product requires both. So at Nokero we use both design and utility patents to protect our products. When you start out with product design, you do not know what will be patentable, so it is best to pursue protection for both, although each type of right does have its own unique benefits. It really depends on your business strategy and your long-term goals.

When it comes to patenting, because we operate in so many different markets, we use WIPO’s Patent Cooperation Treaty (PCT). Every start-up has limited funds and the PCT is a great mechanism for delaying patent filing costs, allowing time to test the market and overcome any unforeseen technical problems. Without the PCT, protecting an invention in international markets would be a high-risk strategy with huge upfront costs.

In 2013, we even won the Patents for Humanity award from the United States Patent and Trademark Office (USPTO). We hold around 20 patents and have successfully sued a number of infringing companies. Our patent and trademark rights enable us to protect our inventions and our brand as well as the interests of our investors and the efforts of our distributors.

Launched in October 2015, Nokero’s patented N233 lamp (above) can produce 700 lumen-hours per watt. The industry standard is 300 lumen-hours per watt. Intellectual property plays a critical role in Nokero’s business strategy enabling it to protect its inventions and its brand as well as the interests of investors and distributors.

How long did it take to develop your first solar-powered light bulb and how has the technology advanced since you first developed it?

From conception in January 23, 2010 to public launch it took just five months. That is about as fast as we could go, given the need for production tooling, branding, website development, and so on. Product development takes longer now because our products are more complex. The first product we launched was about 200 lumen-hours per watt (of solar panel). In October 2015 we launched our latest product, which reaches 700 lumen-hours per watt. The industry-standard is 300 lumen-hours per watt, so we are leading by a huge margin. Our newest product, the N233, is twice as good as anything we have tested but only costs 10 percent more to make. We believe that the small improvements we have made to the N233 make it the most durable solar light yet.

There are a number of entities tackling energy poverty – what makes Nokero stand out?

Nokero is unique in the expanding off-grid solar sector. We have the technical capability, but we also have the IP to protect our position. This makes us unique in an industry that is full of copycat products that are eroding trust in solar solutions. Over the long term, Nokero will have a unique design and performance that is defended by a global IP portfolio.

What is your long-term goal?

To improve tens if not hundreds of millions of lives.