Clean Cooking in a Crisis.
“By promoting sustained use of clean cooking in a resource-poor, urban community… pay-as-you-go LPG is an encouraging consumer finance mechanism that can help achieve universal energy access.”
PayGo Energy (PayGo) is pleased to have participated in a recent study conducted by the University of Liverpool (UoL) and the Global LPG Partnership, as part of the CLEAN-Air(Africa) program.¹ The study found that pay-as-you-go enabled households in an informal settlement in Nairobi to maintain access to liquified petroleum gas (LPG) during times of increased financial hardship that resulted from the COVID-19 lockdown.
You can read the full paper in the March edition of Applied Energy, here. For the less scientifically inclined, we’ve summarised the key findings below.
1. Pay-as-you-go customers are less likely to revert to dirty fuels.
“When Covid hit, I could no longer access my daily jobs, my husband received a salary cut and our children came back home because schools were closed… We had to cut down on non-essential spending such as luxury foods and only concentrate on putting food on the table and paying rent.”
Margaret, PayGo customer
Despite loss of income, the study found that just 5% of 301 active PayGo customers discontinued LPG use during the lockdown. In fact, PayGo customers that were active at the start of the COVID-19 lockdown increased their monthly consumption by an average of 25% during the lockdown period. By contrast, another survey conducted in the same community revealed that 27% of households using LPG as a primary cooking fuel (without access to pay-as-you-go) reverted to using ‘polluting’ cooking fuels during lockdown, either by purchasing kerosene (14%) or gathering wood (13%).
2. During lockdown customers topped up more frequently, and in smaller amounts.
“Even if you have the lowest amount of money, you will still be able to cook.” Ruth, PayGo customer
PayGo’s core hypothesis is that low-income households can afford to cook with clean-burning LPG, if provided with the option to pay incrementally (have a read of this article). The study found that PayGo customers preferred to make smaller, more frequent payments during lockdown. With lower cash on hand, customers sought to minimise the amount of liquid tied up in cooking fuel. Average payment frequency doubled, while the average single payment amount halved.
3. COVID policies led to increased household consumption.
“[When COVID hit] schools closed and my kids came back home from boarding school. This increased our gas consumption because of the extra meals I have to make for my family. My kids also use gas to boil bathing water, normally my husband and I could go without the luxury of hot water.”
Margaret, PayGo customer
During the lockdown, many workplaces closed and boarding schools sent kids home. This meant more family members spending more time at home.
Five out of six customers interviewed as part of the study reported that their use of LPG during the lockdown increased due to preparing lunch for their children, who are ordinarily served lunch at school. Cooking data collected through the PayGo CSM shows a marked increase in average consumption during this period.
This study demonstrates the extent to which flexible payment models can help vulnerable consumers navigate through financial hardship. By enabling consumers to pay in amounts that fit within their daily budget, PayGo was able to retain the majority of its customers during the COVID lockdown, despite the loss of income.
¹ The study analysed Cylinder Smart Meter (CSM) data from over 400 PayGo Energy (‘PayGo’) customers in Mukuru Kwa Reuben, and monitored full cylinder LPG stove usage from a random sample of non-PayGo customers in Eldoret (Western Kenya). The study compared smart meter data collected over the course of January 2018 to February 2020, and during Kenya’s first COVID lockdown (March to June 2020). This enabled an examination of the effects of the lockdown, and associated downstream impacts on household income, on patterns of LPG usage.