Dear SunCulture Supporters,

A few weeks ago, SunCulture announced our commitment to deploy 274,000 solar irrigation systems to smallholder farmers nationwide to achieve food security in Kenya. The commitment was highlighted by United States Vice President Kamala Harris in a press release. Deploying 274,000 solar irrigation systems over the next 5 years will directly improve the lives of 1,068,600 Kenyans, create 411,000 jobs, grow 7,100,000 metric tons of food, and generate $5 billion of increased incomes for smallholder farmers. To achieve this, we will require $219 million - $61 million in equity, $92 million in debt, $46.5 million in carbon financing, and $19.5 million in results-based financing (grants or subsidies).

That’s 40% less than what one government aid agency spent on humanitarian relief in Kenya in 2022 alone.

Over the past few years, I’ve advocated for a more focused approach to how capital gets allocated and what it needs to be allocated towards in order to scale climate resilience technology (namely solar irrigation), and I’ve demonstrated that end-user subsidies are the highest impact pathway to increasing farmer access to solar irrigation. In both cases, the analysis was academic and anecdotal, drawing on examples from other parts of the world. We worked with CrossBoundary, an investment and advisory firm focused on underserved markets, to understand how reducing the price of our solution—solar irrigation technology bundled with financing, installation, maintenance, and advisory services—will increase the addressable market for solar irrigation, and theoretically increase sales velocity. The resulting study estimated that if we reduce our price by 50%, 4-5 times more Kenyan farmers could afford to buy our solution.

And the real numbers are even better than the study projected. Earlier this year we ran a pilot in which we reduced the price of one of our products by 28%. Sales for that product increased by 4.3 times compared to the same period the year before. While this ratio (28% decrease in price leading to a 4.3 times increase in sales) may not hold forever, it's clear to see that there's a non-linear correlation between price and addressable market when it comes to selling things to smallholder farmers. And whether it's subsidies or carbon, reducing the end-user price for solar irrigation will have the highest return on impact dollar for dollar.

This year’s annual letter is our plan to deploy 274,000 solar irrigation systems in Kenya to achieve food security. It provides a summary of the business model to achieve this, the assumptions we’ve taken, and a timeline to execute.

The intention of this letter is not to say that SunCulture is the only company that can do this.  Rather, it is to show that deploying solar irrigation for national food security can be achieved with conservative assumptions, and how doing so costs relatively little. We’re using Kenya as an example, but this is bigger than Kenya: replacing every diesel-generated agricultural water pump in the world with a solar pump will reduce global greenhouse gas emissions by 7%. That’s as much greenhouse gas emissions as the cement industry produces.

The challenge of solving food insecurity is complex. The full solution isn’t as easy as installing a certain number of solar irrigation systems. But food *production—*the necessary genesis for food security—is a really good place to start, and irrigation can increase food production by up to five times.

Today, climate change is the main driver of food insecurity. It has a temporal urgency unlike many other complex global issues. With increasing droughts and erratic weather patterns, more and more farmers will need to turn to irrigation from rainfed agriculture. Solar irrigation aside, farmers have two choices: purchase greenhouse gas-emitting fuel pumps, further contributing to the problem they’re trying to combat, or abandon farming altogether in search of livelihood opportunities in urban areas, exacerbating the issue of global food security and putting stress on economies and infrastructure in cities leading to civil unrest.

Solar water pumps are tools for both climate change mitigation and adaptation. They help mitigate worsening climate change by giving smallholder farmers a clean alternative to greenhouse gas-emitting diesel and petrol pumps. And they help smallholder farmers adapt to the damages of climate change. While solar irrigation isn’t the silver bullet (nor is any other singular intervention), it works and it’s scalable.