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The Potential of Off Grid Solar Solutions

Nicole Silvya Bouris's picture
Senior Business Development Manager & Humanitarian Lead BioLite

Nicole is a distributed energy professional with 5 years of experience in both public and private sector. She has worked for the World Bank in Washington DC and is now based in Kenya working for...

  • Member since 2022
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  • Dec 5, 2022
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Hello grid professionals, this post might seem a bit off topic for you, but I hope you will enjoy it!In this article, I will tell you about off grid solar technologies in emerging markets. 

Globally, there are 733 million people living without access to electricity. Many of these are climate-vulnerable and have contributed the least to climate change. On a regional basis, Sub-Saharan Africa remains the least electrified region, in fact 77% of unelectrified people —about 568 million people—lived here in 2020. The International Energy Agency projects that 670 million people will still lack access to electricity in 2030.

Share of the population without access to electricity in 2022 – Source: World Bank and IEA

As of today, off grid solar products have positively impacted 490 million people living in developing countries by bringing light, education, security, income generation, and more.

                  

Examples of solar lantern, multi light system and solar home system

An off grid solar (OGS) product is usually a combination of: a solar panel, a battery and one or multiple lights. Depending on the size of the panel and battery as well as the number of lights and additional appliance(s) that it can power, we categorize them in: solar lanterns, multi-light systems and solar home systems. Here are examples below.

These products are set up in people’s home that are located far away from the national grid and thus usually use traditional fuels (such as kerosene lanterns or fire) to light up their homes.

The global OGS market is valued at an estimated $2.8 billion annually with an estimated 30 million units sold only in 2021 across all developing countries.

 

The potential that these products can unleash

Off-grid solar technologies are expected to be the least-cost solution for 41% of new household connections between 2020 and 2030. Already, we see the positive impact of these products, as the number of people accessing solar energy kits has grown from 420 million people in 2019 to over 490 million people by the end of 2021, with more people gaining higher ‘Tier 2’ levels of access. The Multi Tier System is a scheme developed by the World Bank to categorize the type of access to electricity (and cooking) acknowledging that electricity access is a spectrum of service levels. For example, Tier 2 would mean to have at least 4 hours of daily available electricity access and at least 2 at night.

The majority of solar kit customers are rural, male and living under the poverty line of $3.10. Thus, Paygo technologies, tools that allow customers to pay for their OGS units in installments, have plaid a crucial role in increasing affordability. Today, there are multiple companies who specialize in paygo and CRM services, leveraging the high mobile money wallets that can be used to pay for the OGS systems.

In terms of fundraising, the OGS industry has been on a growing trend. Between 2012 and 2021, the off-grid solar sector has raised $2.3 billion in capital through debt, equity and grants and this year (2022) is set to be a record breaking year. Though, the majority of this funding has been raised by international players. From a public sector perspective, over $211 million have been disbursed or is currently being disbursed to the sector.

Finally, let’s talk about the benefits that these products can bring to their users.

  • Money savings and income generation. Using OGS devices can save households money as they replace expenditure on kerosene, batteries, or charging mobile phones, although this depends on the size of the system. Increased economic activity and income generation are crucial outcomes for households to be financially better off from using a larger SHS. Moreover, working for longer hours is the most common way in which end users report being able to undertake more economic activity through the acquisition of a solar device. OGS devices also enable consumers to start new income-generating activities or improve an existing business.
  • Jobs created. The off-grid solar sector is powering over 10 million micro and small enterprises and creating hundreds of thousands of clean energy jobs directly within the industry.
  • Financial inclusion. Through the PAYGo business model, the off-grid sector has expanded financial inclusion to those in remote areas and motivated the adoption of mobile money.
  • Health and safety. Households using OGS products report positive impacts on their health and safety. Solar lighting’s major health benefit to households is the replacement of kerosene lanterns, which emit fine particulates and toxic gases that can harm health and cause burns or fires
  • Education. Children study for longer hours if they have an OGS product; however, there is no definitive link to improved educational outcomes. Evidence suggests that study times are often shifted to after dark, freeing daylight hours for other activities.
  • Environment. Replacing kerosene lanterns with solar lighting has already avoided an estimated 190 million tonnes of CO2e, equivalent to taking 51 coal-fired power plants offline for a year, while replacing diesel generators also has clear emissions reduction benefits.

 

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Nicole Silvya Bouris's picture
Thank Nicole Silvya for the Post!
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