About David John Frenkil:
Before starting Centennial in 2014, he worked as a Project Finance attorney at law firms in Los Angeles and Washington, DC, including Chadbourne & Parke (now Norton Rose Fulbright), where he represented investors and developers on over 1,000 MW of solar projects.
Tell us about Centennial.
Centennial connects commercial and industrial businesses in African markets to more affordable, reliable, cleaner and safer power supply. For no upfront cost to our customers, Centennial provides a combination of solar photovoltaic, battery storage and/or diesel generator projects at the customer’s facility. We also bring the financing, procurement, installation, operations and maintenance, and even insurance, so it is a hassle-free experience for our customers.
Centennial’s projects improve the financial performance of our customers’ businesses without requiring these businesses to make room in their budget for the equipment or the O&M associated with the equipment.
Who are your typical customers?
Our customers include mines, manufacturers, distribution companies, hotels, commercial buildings, universities and healthcare facilities. We are now also working with utilities to reduce their operational costs and down time. So far, we have 7 operational projects in East Africa, with more projects under way in the EAC and other parts of the region.
What problems are you addressing for your customers?
For all of our customers, energy is a critical piece of their operations. We help our customers navigate the complexities involved in having better power supply, but we do it without imposing on their budgets. We tell our customers to save your money and spend it on other growth initiatives. Centennial’s model takes the requirement for upfront capital expense off the table. Without having to pay for the equipment, Centennial’s projects allow each customer to have a more resilient and affordable operation, while also improving the environmental footprint of the business.
Priority number 1 for facilities is to minimize down-time because it is difficult to control your business’s destiny when operations are interrupted due to inadequate and unpredictable power supply. If the power supply is not reliable, either because it shuts off or the voltage fluctuates, critical machinery doesn’t function. This means that work doesn’t get done, deadlines are missed, goodwill is lost with customers, reputations are damaged, competitors are given new opportunities, and revenue is lost.
The second priority is to find ways to ease the burden on operating expenses that are unnecessarily high due to expensive power supply. Businesses in emerging markets should not have to pay a premium to consume electricity.
Third, power supply is typically damaging to the environment. Growth and sustainability don’t have to be mutually exclusive. In fact, it’s the opposite now, because electricity from solar projects is now cheaper than most grid power, and certainly at least two-times more affordable as diesel.
What is the cost of your typical system?
For a battery project, it really depends on the maximum load of the equipment that is connected to the battery’s inverters. But in a solar-only context, in U.S. Dollar terms, if you’re paying more than 12 cents per kilowatt-hour for electricity generated from a solar project that is larger than 500 kW, you’re getting a bad deal. For a solar project that is less than 500 kW, due to economies of scale, 16 cents per kilowatt-hour seems high for a project installed using 2018 equipment prices.
Centennial has a cost advantage over competitors because we’re vertically integrated since we have in-house sales, technical, procurement and financing, with a local team in the markets where we’re operating. This means that there are less middle men taking margin out of the transaction, so we can pass those savings onto our customers.
However, while cost is important, it’s also important to note that quality is even more important. Even though we pride ourselves with offering competitive pricing, our equipment is top tier, industry-leading equipment, with warranties that are supported by creditworthy manufacturers.
How do you determine good quality?
Among other factors, safety. The technology we use through our SolarEdge inverters eliminates the risk of electrocution and unsafe voltage levels. This protects installers, maintenance personnel and emergency responders.
When the inverter is turned off or in safety mode, the DC voltage in the solar string cables are reduced to a voltage level that is safe and extra-low, just 1 volt. Also, our O&M software enables monitoring of each individual solar module, which improves accuracy of monitoring, and remote trouble-shooting.
For example, in May of last year, we commissioned a new project, but it was not performing as we had expected. Using the O&M software, we identified several modules in the Northeast corner of the project which were shaded in the afternoon hours from a tree. After trimming the tree, the project is now performing as originally expected. And, as we’re a sustainable company, we also planted new vegetation to offset the losses from trimming the branches.
When you’re working with customers, how important is the environmental impact of the project?
Naturally, businesses prioritize the reliability and cost efficiency aspects of our projects. Some, but not all, of our customers have a green mandate. For those that do, Centennial’s projects allow customers to achieve their sustainability targets without committing new CapEx to the project.
Also, the environmental footprint of businesses on the African continent matters for many reasons, including the fact that unsustainable operations can be a disqualifier for growth opportunities. Fortune 1000 companies are looking internally, and throughout their supply chain, for ways to cut down on greenhouse gas emissions. As businesses in Africa are increasingly part of that global supply chain, sustainability targets are important.
What do customers have to do after signing up?
First, any interested customers can send us a note through our website at CentennialGen.com or 100Africa.com, which takes you to the same place. From there, our team can offer a proposal within 24 hours after we receive key information about the customers’ facility.
Once the customer agreement is signed, and the project is installed, we need frequent access to the customer’s facility for our in-house technical team to come to site to keep the solar modules clean and the equipment up to date. We focus on asset management because we’re only getting paid if our projects are generating electricity as expected.
Aside from access, customers simply need to pay their bill on time. We’ll take care of the rest. If customers make timely payments under the customer agreement, at the end of the term, ranging from 5 to 15 years, we transfer the project over to the customer for no added cost. At that point, the project will typically be only half way through its useful life.
