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151215_Wealth Magazine_Solar_Business Innovation Facility

G
Godfrey Moto

Solar energy is becoming increasingly popular in Malawi and globally as a sustainable alternative to fossil fuels. Malawi has an opportunity to transition to solar technologies and become a green economy through decentralized solar networks, promotion of quality solar products and services, and incentives for financing solar energy projects. As solar costs fall and efficiency rises, solar energy can power critical economic sectors and help alleviate poverty when harnessed through standalone systems or integrated with other renewable sources.

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Wealth Magazine From poverty to we/.alth: A solar energy perspective Solar energy is becoming an increasingly popular buzzword within Malawi, Africa and the wider world. Having been touted by many as one of the best alternative sources of energy besides fossil fuels, it is clear that the revolution in solar energy as a suitable technology will ensure it becomes a household name and common feature in societies across the globe. Just as is the case with the computer semi-conductor chip industry, the efficiency of the solar technology and the associated costs of production are both rising sharply and tumbling, respectively. The applications for solar energy are huge, and indeed can also be used to maximum effectiveness when harnessed and integrated with similar alternative sources of energy. Within the context of climate change and the recent 2016 December Climate Change talks in Paris, Malawi is presented with an unprecedented opportunity to build on its existing foundation of renewable energy and chart the way for a brighter economic future through the adoption of solar technologies. A decentralized solar energy network which ultimately envisions Malawians as consumers cum prosumers paints a picture to which Malawi must aspire to translate into reality with the utmost vigour. The availability and promotion of quality assured solar energy products and services, coupled with incentives and increased access to public and private finance mechanisms for the solar energy market, are the key features needed to witness Malawi bloom into a green economy over a short period of time. The creation of Malawi as a circular- oriented economy will reflect the addition of recycling and waste management as a key component of the economic assembly line, and indeed is the ultimate goal in which all forms of renewable energy can be utilized in as many stages of production as possible. Solar energy will play a critical role amongst the mix of alternative sources available both as a standalone application and integrated within a hybrid system. Energy underpins all sectors critical to the optimal functioning of an economy it for this reason the fall in costs has the ability to create a significant impact in a short space of
time. The Sustainable Energy 4ALL (SE4ALL) initiative and recent Solar Energy Africa energy compact signed by HE President APM all serve to remind us of the continued appeal and importance of solar energy as a means through the poverty trap. As the African Development Bank President, Akinwumi Adesina, recently exclaimed, there is no better time and place to invest in energy than there is now, and in Africa. The incoming Energy Act seeks to provide more clarity on the regulatory landscape for solar energy and seeks to clarify the range of incentives available to interested parties. 80% of the 8 million quality-assured portable solar products sold across Africa have been sold in Kenya, Ethiopia and Tanzania, countries which have all placed tax relief incentives including VAT and adopted the International Quality Assurance Framework, as championed by the Global Off-Grid Lighting Association (GOGLA). The Business Innovation Facility champions the applications of solar energy that target the masses at the base of the pyramid (BOP) in Malawi, which totals 93% of the population and whom currently have very little or no access to sustainable and healthy lighting and mobile charging sources. For the less privileged in society solar energy perhaps offers the most potential for added value creation whilst for those more privileged with the ability to invest, there are opportunities to explore different ways in which value can be created and added to the local, regional and global economy. New innovations and business models with either a low or high tech component are the key to unlocking the full potential of a surplus energy, carbon neutral economy with further opportunities for climate financing. The business innovation facility seeks to champion and explore the most effective ways which positively impact the BOP through the consultative support of businesses, governmental and non-governmental organisations. It is clear that not enough emphasis can be placed on the importance of energy as a feature of the development of any economy and modern civilization. Making Malawians more energy independent via the promotion of small portable solar products, known commonly as pico solar products (PSPS), and through the sustainable implementation solar projects, innovations and business models will surely be the opportunity Malawi has been waiting for. Who knows, perhaps Malawi will soon celebrate a Solar Energy Independence Day. More than 8 million pico solar products (PSP) have been sold across Africa in recent years. Technological advances bringing increased quality and lower prices coupled with business innovation has enabled a boom in the global PSP industry. PSPs provide safe, bright light and mobile phone charging, and the cheapest are available for just $10. However PSPs are yet to gain a significant market share in Malawi; there is limited availability of products in rural areas and customers lack trust and awareness of the technology. The sector is yet to leverage commercial finance and lacks a supportive enabling environment.
BIF is supporting Malawian companies to grow the market in Malawi by: Exploring new and better ways for PSP importers to market and distribute products Looking for novel finance mechanisms to increase sales to low-income consumers Influencing the enabling environment and facilitating the provision of market intelligence A large number of quality assured products can be found here at www.lightingglobal.org.com, totaling 135 products across 40 manufacturers and this number is only growing, increasingly in tune to the size and needs of the market as is the case in other countries mentioned here. Business models serving off-grid communities have been successful in the African neighborhood and it is increasingly clear that Malawi has a rapidly growing market for solar energy applications too. With quality products that represent a comparatively short payback period for their initial cost, it is no wonder that there is high demand for these products which positively impact the less privileged in off-grid areas. Godfrey works a solar energy market researcher and consultant with the Business Innovation Facility which is working with the Renewable Energy Industries Association on a Market Intelligence Report which focuses on the Pico solar market in Malawi. Publication is expected mid-2016.

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151215_Wealth Magazine_Solar_Business Innovation Facility

  • 1. Wealth Magazine From poverty to we/.alth: A solar energy perspective Solar energy is becoming an increasingly popular buzzword within Malawi, Africa and the wider world. Having been touted by many as one of the best alternative sources of energy besides fossil fuels, it is clear that the revolution in solar energy as a suitable technology will ensure it becomes a household name and common feature in societies across the globe. Just as is the case with the computer semi-conductor chip industry, the efficiency of the solar technology and the associated costs of production are both rising sharply and tumbling, respectively. The applications for solar energy are huge, and indeed can also be used to maximum effectiveness when harnessed and integrated with similar alternative sources of energy. Within the context of climate change and the recent 2016 December Climate Change talks in Paris, Malawi is presented with an unprecedented opportunity to build on its existing foundation of renewable energy and chart the way for a brighter economic future through the adoption of solar technologies. A decentralized solar energy network which ultimately envisions Malawians as consumers cum prosumers paints a picture to which Malawi must aspire to translate into reality with the utmost vigour. The availability and promotion of quality assured solar energy products and services, coupled with incentives and increased access to public and private finance mechanisms for the solar energy market, are the key features needed to witness Malawi bloom into a green economy over a short period of time. The creation of Malawi as a circular- oriented economy will reflect the addition of recycling and waste management as a key component of the economic assembly line, and indeed is the ultimate goal in which all forms of renewable energy can be utilized in as many stages of production as possible. Solar energy will play a critical role amongst the mix of alternative sources available both as a standalone application and integrated within a hybrid system. Energy underpins all sectors critical to the optimal functioning of an economy it for this reason the fall in costs has the ability to create a significant impact in a short space of
  • 2. time. The Sustainable Energy 4ALL (SE4ALL) initiative and recent Solar Energy Africa energy compact signed by HE President APM all serve to remind us of the continued appeal and importance of solar energy as a means through the poverty trap. As the African Development Bank President, Akinwumi Adesina, recently exclaimed, there is no better time and place to invest in energy than there is now, and in Africa. The incoming Energy Act seeks to provide more clarity on the regulatory landscape for solar energy and seeks to clarify the range of incentives available to interested parties. 80% of the 8 million quality-assured portable solar products sold across Africa have been sold in Kenya, Ethiopia and Tanzania, countries which have all placed tax relief incentives including VAT and adopted the International Quality Assurance Framework, as championed by the Global Off-Grid Lighting Association (GOGLA). The Business Innovation Facility champions the applications of solar energy that target the masses at the base of the pyramid (BOP) in Malawi, which totals 93% of the population and whom currently have very little or no access to sustainable and healthy lighting and mobile charging sources. For the less privileged in society solar energy perhaps offers the most potential for added value creation whilst for those more privileged with the ability to invest, there are opportunities to explore different ways in which value can be created and added to the local, regional and global economy. New innovations and business models with either a low or high tech component are the key to unlocking the full potential of a surplus energy, carbon neutral economy with further opportunities for climate financing. The business innovation facility seeks to champion and explore the most effective ways which positively impact the BOP through the consultative support of businesses, governmental and non-governmental organisations. It is clear that not enough emphasis can be placed on the importance of energy as a feature of the development of any economy and modern civilization. Making Malawians more energy independent via the promotion of small portable solar products, known commonly as pico solar products (PSPS), and through the sustainable implementation solar projects, innovations and business models will surely be the opportunity Malawi has been waiting for. Who knows, perhaps Malawi will soon celebrate a Solar Energy Independence Day. More than 8 million pico solar products (PSP) have been sold across Africa in recent years. Technological advances bringing increased quality and lower prices coupled with business innovation has enabled a boom in the global PSP industry. PSPs provide safe, bright light and mobile phone charging, and the cheapest are available for just $10. However PSPs are yet to gain a significant market share in Malawi; there is limited availability of products in rural areas and customers lack trust and awareness of the technology. The sector is yet to leverage commercial finance and lacks a supportive enabling environment.
  • 3. BIF is supporting Malawian companies to grow the market in Malawi by: Exploring new and better ways for PSP importers to market and distribute products Looking for novel finance mechanisms to increase sales to low-income consumers Influencing the enabling environment and facilitating the provision of market intelligence A large number of quality assured products can be found here at www.lightingglobal.org.com, totaling 135 products across 40 manufacturers and this number is only growing, increasingly in tune to the size and needs of the market as is the case in other countries mentioned here. Business models serving off-grid communities have been successful in the African neighborhood and it is increasingly clear that Malawi has a rapidly growing market for solar energy applications too. With quality products that represent a comparatively short payback period for their initial cost, it is no wonder that there is high demand for these products which positively impact the less privileged in off-grid areas. Godfrey works a solar energy market researcher and consultant with the Business Innovation Facility which is working with the Renewable Energy Industries Association on a Market Intelligence Report which focuses on the Pico solar market in Malawi. Publication is expected mid-2016.