A company in India is taking a popular idea in the country pay as you go cell phone service and applying it to small scale solar energy systems.

Simpa Networks, a startup based in Bangalore, India, is offering small solar panel systems to rural homes that would otherwise not be able to afford electricity at all.

The most basic system offered to off-grid homes is around 25 watts to 50 watts; it will produce enough electricity to power a couple of CFL lights, a cell phone charger and another small appliance like a fan or a TV cable box.

While this might seem like a meager contribution by western standards, remember that these are rural families often surviving on less than $4 a day.

Simpa, partnering with solar manufacturer Selco India, allows customers to pay for a small percentage of the system’s hardware upfront. Customers then purchase pay-as-you-go cards in increments of 50, 100, or 500 rupees which supplies them with a code that they enter to unlock the solar system. Some sources report customers can also top off their accounts with their cell phones.

After typically 2 or 3 years, the customer has paid off the hardware and owns the system outright. They are then able to generate their own electricity for free.

Many of Simpa’s target market customers wouldn’t be able to afford a solar electric system otherwise and aren’t interested or eligible for a loan. The payment system is already in place in Bangalore; 50 customers are currently using a Simpa system and 8 are within a few months of paying off their system.

Aside from the attractive payment system, Indian households arelooking for better ways to light and power their homes. Kerosene is mostly used for lamps, and other popular fuel sources like diesel or wood burning are “more hazardous to health and more expensive than grid power and off-grid solar.” Additionally, these methods actually end up costing more per capita and per income than grid-connected power for the average Indian consumer.

Simpa is still a young company–only a year old–with a new concept that will face a lot of challenges as it attempts to reach its break-even goal of 5,000 systems sold each year, not to mention turn a profit. However, the company has already received a round of angel investments totaling $1.3 million and hopes to raise an additional $4 million in the coming months.