Egypt: The start up providing locally manufactured solar water heater

Mohamed Zaki Makhlouf is a 62-year-old retiree who heads an eleven-member household in an Egyptian village in the province of Fayyoum.

He has recently accepted the offer made by Shamsina, a startup social enterprise, to have a locally manufactured solar water heater installed on his rooftop.  For the first time, his family may have access to a direct source of hot water. 

“I did not think twice when the company’s representative approached me. I told them they could come and install it [the heater]. There is no harm in doing such a thing neither to me nor to others. So why not do it? On the contrary, it may benefit me as well as others,” says Makhlouf.

Makhlouf lives in a two-story house with his wife, two sons, their wives and five grandchildren.

The household’s monthly income stands at EGP 5500 (nearly $178). Like millions of Egyptians, the family uses gas tanks to heat up their water on a kitchen stove.

Makhlouf’s household has fulfilled all eligibility conditions set by Shamsina - Arabic for “Our Sun” - to receive a subsidized solar water heater.

“At Shamsina, our mission is to tangibly improve the well-being of households that we target,” says Sara Mousa, Shamsina co-founder and CEO.

“We do that by reducing the time they spent to heat water, reducing the running cost of heating water, and providing them with an alternative that is healthier, safer, and better for the environment.”

Mousa is an Egyptian American who was born and raised in the United States. Growing up, she used to visit Egypt regularly with her family in the summer.

After finishing her undergraduate studies in the US in 2010, Mousa moved to Cairo, where she engaged in volunteering activities in poor neighbourhoods.

She noticed that most poor-income households use manual methods to heat their water. That was the moment she came up with the idea for her startup up.

“When we first noticed this problem, we became very curious about how common it is and we dug up national data. And we found that about half of households across Egypt are estimated to use manual methods for heating water,” says Mousa, who holds a BA in public policy from Princeton University.

She explains that these manual methods affect the air quality inside poor houses and increase the risk of burns.

“If we take a single household and they no longer use the sort of two gas tanks per month to heat their water, we cut emissions by 5 Kgs every month. This sounds really small on one household, but if we multiply that figure month after month and across millions of households, then we have a tangible dent on the CO2 emissions,” she says.

The burden of heating water for the Makhlouf’s family usually falls on Sabah Nabil, Makhlouf’s daughter-in-law. The process gets highly inconvenient in the winter.

“In the winter, I heat up water three or four times a day. My mother-in-law has feet issues, so every time she washes up before prayers, she needs hot water. Hence, she needs hot water five times a day. I also heat water to bathe my children every other day,” says Nabil, the mother of Mohamed and Waed.

In the cold months, Makhlouf’s family spends up to ten percent of their monthly income on butane cylinders.

“In the winter, each [nuclear] family consumes around one or one and a half gas cylinder. In sum, we consume around four tanks a month. This can cost somewhere between EGP 350 and EGP 500 ($11 -16),” says Makhlouf.

The use of heavily subsidized gas cylinders also puts a strain on the finances of the cash-strapped country which remains a net importer of oil and its derivatives.

In 2013, three out of every four Egyptian households relied on butane cylinders because they had no access to low-cost, grid-connected supply of natural gas, according to the World Bank.

Last year, Oil Minister Tarek El-Molla said that Egyptians consume around 800 thousand butane cylinders a day, 50 percent of which are imported. He added that the government spent nearly EGP 35 billion ($1.32 billion) annually on subsidizing butane cylinders.

The cost of importing and subsiding gas tanks is usually bound to rise given the instability of global oil prices and Egypt’s recurrent foreign currency crunches.

Like other renewables, solar energy might contribute to alleviating the strain on the state’s treasury.

The North African country, which hosted the 2022 UN summit on climate change, is located at the heart of the global solar belt with at least 2900 hours of sunshine annually, according to the country’s 1991 Atlas.

In it's Egypt Vision 2030 the country's government embarked on policies aimed at reducing its reliance on fossil fuel and utilizing its renewable energy resources.

According to the government’s long-term development strategy, Egypt aims to generate 42% of its needed energy from renewables, including solar, hydro and wind by 2030. This vision has created business opportunities for many startups like Shamsina.

“We use a hybrid business model. On the one hand, we are really fortunate to benefit from grants and donations in order to be able to reach low-income households, and on the other hand we are really excited about our cross-subsidy business model. We target higher end consumers, businesses, hotels for example that can afford our solar water heater and we use proceeds from these consumers in order to fund solar water heaters for our lower-income households,” says Mousa.

Shamsina, which is incubated at Harvard Innovation Labs, has so far developed five different iterations of its thermal solar water heater.

With a total seed funding of nearly $ 25,000, Shamsina has piloted 30 water heaters in different low-income neighbourhoods across the country. With local R&D and local components, the company offers consumers a more affordable solar water heater, the price of which is almost half that of the imported one.

Omar Abdelaziz, an engineering professor at the American University in Cairo, argues that even if they become widely affordable solar water heaters are unlikely to fully replace conventional heaters especially in Egypt’s densely populated cities.

He explains that the installation of solar collectors requires large spaces that are more prevalent in remote or rural areas with lower population densities, predicting that their market share will be "no more than 30 percent".

But he does see in them an important element for the overall strategy of energy generation as well as "empowerment".

“They can guarantee some form of empowerment," he says, adding that "with a solar water heater, we will be able to provide access to hot water in places that never had this privilege; and that is very important."

And if Egypt wants to reach it's target of reducing greenhouse gases emitted from energy industries like oil and gas by 10% by 2030 compared to 2016 levels, every reduction counts.