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Posted on 21 July 2014

Solar lights & VAT in Zambia

Selling solar lights through our social enterprise SunnyMoney is not the only thing we do. We also lobby governments, partner with aid agencies and campaign to reduce the barriers many come across within the off-grid lighting sector. 

 

Below is a letter written to the Minster of Finance in Zambia asking the government to extend the VAT exemption currently available for solar panels and batteries to include small, hand-held solar lights too.

The letter is written by Alexandra Burrough, acting Operations Director for SunnyMoney in Zambia. If you want to understand a little more about the work we're doing here at SolarAid then why not give the letter a quick read. 


Dear Honourable Alexander Ckikwanda, MP

RE: PETITION FOR VAT AND DUTY EXEMPTION FOR SOLAR LIGHTS

We are writing to petition the Government of Zambia to exempt solar lights and solar home systems, designed for use in areas without access to the electricity grid, from VAT and duty in the next budget. High quality solar lights, such as those approved by the World Bank and IFC initiative Lighting Africa, have a tremendous impact on the income, education and health of the poorest families in Zambia.

Across Zambia 78% of households do not have access to electricity. Without electricity, families must either spend hours in the dark or use dangerous, expensive alternatives for lighting such as kerosene, candles and battery lights. Without light, opportunities for earning, learning and socialising are severely limited. When darkness falls, millions depend on costly, polluting energy sources to light their homes, schools and businesses. Their dependency locks people into a cycle of poverty; draining their income, damaging their health and causing fatal burns and fires.

SunnyMoney Zambia is a social enterprise, owned by SolarAid, a UK-based NGO, which works to eradicate the kerosene lamp in Africa by building a market for portable solar lights. Our goal is to increase the availability of high quality solar lights in all parts of Zambia so that poor households do not have to rely on kerosene or candles for lighting. We do this through working closely with the Ministry of Education and delivering lights through a school campaign targeted at teachers and students in rural areas and through an agent programme that provides training and support to over 200 small-scale entrepreneurs across Zambia. To date in Zambia we have sold over 100,000 portable solar lanterns impacting half a million Zambians.

Our monitoring, evaluation and research provides evidence of the impact that these products have in Zambia.

• Because families are reducing their expenditure on other lighting products, this is saving them nearly $75 a year, on average. That’s nearly 10% of household income; a significant amount. The top most common uses of savings are groceries (food), school fees and investment in farming inputs or business; this shows how a solar light can start a virtuous cycle of development and progress.

• 80% of headteachers we’ve talked to say that there is a difference in students with solar lights; notably there is an improvement in motivation, performance and/or reading and writing skills at school as a result of this.

• Because SolarAid, through its social enterprise SunnyMoney, distributes solar lights through the school network, 65% of customers tell us that their children use the solar lights to study. This means that children are doing an extra one hour of homework each day, after dark.

• Much closer to home, reducing kerosene light use also means less indoor air pollution. A third of customers report improved health after buying a solar light, including a reduction in respiratory illnesses, coughing, eye irritation and chest problems.

• Families talk of improved security and safety due to this brighter, more reliable lighting. Families also have the opportunity to have improved social interaction and family time without fear of running out of kerosene or batteries for lighting.

• After a solar light purchase, an average family displaces the regular use of one kerosene lamp. This means that over the lifetime of a solar light, up to one tonne of carbon dioxide emissions are averted.

VAT and Tariff exemption for portable solar lights would ensure that lights can be sold at a price that poor, rural households can afford. This is absolutely key to the success of programmes such as ours and to the development of a sustainable market for portable solar lanterns. It is exactly the kind of policy we need if we are to achieve Sustainable Energy for All by 2030. We strongly support the Zambian government’s forward-thinking policy on VAT and tariff exemption on solar panels, batteries and energy saving lights and ask that the Government extend this exemption to Lighting Africa approved portable solar lights in the 2015/16 budget.

We thank you for considering this petition. Please do not hesitate to contact us if you have any questions on this petition or if you would like any further information.

Yours faithfully,

 

Alexandra Burrough

Operations Director (Acting)

SolarAid/SunnyMoney Zambia