Access to electricity is something people living in the affluent North tend to take for granted. In many parts of the South, however, there is no such thing as flicking a light switch when the night settles in. Take Africa, particularly the region below the Sahara. Here, three out of four people rely on charcoal, kerosene, candles, and fossil-fuel powered stopgap technologies for their daily and nightly energy needs.
A recent study by the World Bank Group’s Lighting Global Program, written in collaboration with Bloomberg New Energy Finance and the Global Off-Grid Lighting Association, shows that off-grid solar innovations are changing this scenario slowly but surely.
“Solar-powered portable lights and home kits offer a better service at lower cost,” the authors of the Off-Grid Solar Market Trends 2016 Report write. “These products have improved energy access for an estimated 89 million people in Africa and Asia, and provide enough power to lift 21 million individuals to the first rung of the energy ladder.”
Off-grid solar promise
The number of households that rely on off-grid solar as their primary or secondary energy source is expected to rise from 25 million last year to 99 million in 2020, of which 44 million are in Africa. This makes the continent one of the world’s most powerful off-grid solar markets. Kenya, Tanzania and Ethiopia are the continent’s leading markets, accounting for 66% of sales in the region.
Born and bred in Nkhata Bay, a small rural village on the shores of Lake Malawi, Dikirani Thaulo knows what it means not to be able to switch on the lights after sunset. “Like 99% of my village, my family and I relied on kerosene, which is bad for your health. We used candles too,” says the 22-year old solar technician, explaining how candles are nothing but a luxury in his home country, one of the poorest nations in the world. “One candle in Malawi costs one-fifth of what most people earn per day.”
Little did Thaulo know that one day he would contribute to solving the issue of poor energy access in Malawi. “After finishing high school, I met Gail Swithenbank. She was involved in a newly-built solar academy in Nkhata Bay,” he recalls, explaining that the Zayed Solar Academy trains rural solar technicians and engineers.
“Most solar technicians in Malawi work in cities, whilst it is rural people who suffer the most as a result of energy insecurity,” says Thaulo, who after completing his studies became one of the Academy’s teachers. “Solar is the way forward when it comes to electrifying rural Africa. It is reliable, clean, always there, and it doesn’t pose health risks as opposed to kerosene and charcoal.”
Data by the World Health Organisation (WHO) shows that 50% of global premature deaths among children under the age of five are due to pneumonia caused by soot inhaled from indoor open fires. Thaulo says, “Women and children are most at risk of smoke from indoor fires and household pollution. They spend more time indoors than men.”
Pioneering off-grid solar ventures
Off-grid solar might help improve people’s access to electricity and it also happens to be a viable business venture. The Bloomberg/WorldBank report suggests that $276 million was invested in the global off-grid solar industry last year, a 15-fold rise from 2013. This figure is expected to grow further, to $3.1 billion by 2020. Africa once again, is taking the cake. “Kenya, Tanzania and Ethiopia are Africa’s leading markets, accounting for 66% of all [off-grid solar] sales in the region. In Kenya, more than 30% of people living off the grid have a solar product at home,” the authors write. “Pioneers have helped to create a vibrant market.”
M-Kopa is one of those pioneers. Meaning ‘mobile lending’ in Swahili, this venture has been installing off-grid solar systems in people’s homes for the past four years. These are then paid off in small amounts via cellphone payment systems such as M-Pesa.
“Our systems feature two small solar panels, two lamps, a rechargeable radio, flashlight, and plug point for cellphone charging,” says co-founder Char Larson. “Customers pay us via their cellphones, either daily or weekly, at a rate of $0.40 per day. This is approximately ten cents lower than the average daily kerosene expenditure in the region. Once you have paid off the value of the system, it is yours to keep.”
To prevent non-payment, M-Kopa’s systems are fitted with a wireless switch that is connected to a customer’s phone. “When someone doesn’t pay, the lights go off. Once they start paying again via their phone, the power comes back on,” Larson continues.
He adds that the demand for off-grid solar systems in East Africa – where at most only one-fifth of the people have access to electricity – is huge. “We are adding 500 new customers to our database every day, of which the bulk lives in Kenya,” he says. “We are servicing one in every 20 Kenyan households at the moment, so yes, solar is a good business venture in East Africa.”
In Tanzania, Off Grid Electrics is rolling out one pay-as-you-go solar system after another. “To use the energy generated by our systems, one has to send us a mobile payment via M-Pesa,” explains co-founder Xavier Francois. “When we receive your payment, we automatically send you a password, which has to be entered into the system’s meter for you to have electricity.”
Xavier agrees with Larson that grassroots and off-grid solar, besides being a powerful player in electrifying Africa, is a viable business opportunity – despite the fact that customers typically tend to be poor. “We are growing by 12,000 households per month. The demand is there, making off-grid solar a great investment opportunity.”