Africa’s Off-Grid Solar Market is Booming

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By Maarten Kleijn, SNV (Netherlands Development Organisation)

As prices for solar components go down and new innovative business models arrive, the off-grid solar market in Africa is seeing a huge growth.

With only 290 million out of 915 million people in Africa having access to electricity, action is needed to provide clean and reliable energy for all. While at the same time a huge opportunity for developers and investors in Africa’s energy sector exists.

Being endowed with high concentrations of sunshine, the continent seems suited for solar energy. Even though traditionally, investors’ interest has focussed mostly on larger on-grid solar power generation projects, investments in off-grid solar in Africa have grown enormously in recent years.

According to Michael Franz of the Africa-EU Renewable Energy Cooperation Programme (RECP), a Strategic Partner of the upcoming Unlocking Solar Capital Africa, solar can broadly be categorized in four key market segments: On-grid (large scale), Captive Power (small to medium on-grid), Off-Grid (mini-grids) and Off-Grid (standalone systems). Of which the last market segment is currently ‘going through the roof’ in Africa.

Off-grid standalone systems refer to portable lights and solar home systems. A good example of the former being the award winning Waka Waka solar lights. Compact products with an integrated solar panel and strong LED light that can also be used to charge mobile phones. These products have created a huge impact in providing affordable, clean and safe lighting to people at the bottom of the pyramid.

Solar home systems usually consist of a solar panel, charge controller, battery, LED lights and possibly a number of appliances like TVs and radios. Over the past decade, there has been a steady decline in the prices of solar panels – because of economies of scale in China – as well as an increase in efficiency of light bulbs and other DC appliances. Still, with prices for small solar home systems (3 lights and phone charging) starting from around $100, they are often too expensive for many of the poorest people in Africa, if they were to acquire the product through an outright purchase.

To grant these people access to such systems, some form of consumer credit is required.

To find out more about how to develop bankable solar solutions in Africa join Unlocking Solar Capital Africa, this November 1-2 in Nairobi: www.unlockingsolarcapital.com Readers of AFSEA can get a 10% discount on the conference ticket using the promotional code AFSEA-10

 

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