Uganda has the third largest off-grid solar market in the world, and the last two years realized a 25% growth rate in the off-grid solar industry for Uganda. Off-grid solar solutions clearly contribute to improving access to power, but how can it be recognized and supported as a mainstream solution to improving electrification, especially in the new Energy Policy?
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Off-Grid Solar Market Trends and Linkages to Policy
2. 2
About GOGLA: Our Mission
To help our members build sustainable markets delivering quality, affordable, off-grid
electricity products and services to customers across the developing world
3. Global population without electricity is falling, but not on track to
achieve universal energy access by 2030 (SDG7)
3
Africa in particular lags behind
Note: access in these data does not capture actual
service quality. Approx. 1 billion people (including many
recent grid connections) have very bad grid service.
Total demand for reliable electricity = 2+ billion people!
Based on Dalberg estimate of a potential market of 434m HH for off-grid electrification
(Source:2018 Off-Grid Solar Market Trends Report)
Population without access to electricity, by region.
Note: Other includes Middle East, North Africa and Latin America.
Source: International Energy Agency (IEA) Energy Access Outlook 2017 - World Energy Outlook 2017 Special Report, 2017
Why Off-Grid Solar
4. 4
1. Off-grid solar electrification is the fastest, most cost-effective route to basic universal electricity access
Business models continue to innovate, further improving service quality while lowering delivery costs
2. Off-grid solar easily allows private businesses to provide energy services creating a natural and effective route
to leverage private capital for the public good of energy access
The off-grid solar lighting and electrification industry plays an
essential role in closing the energy access gap
5. What are Off-Grid Solar Products?
Solar
Lanterns
Solar Home
Systems
+ Household
Appliances
Community &
Street Lighting
Off-grid Productive
Use Appliances
6. How are they Offered Across the Industry?
Rental
Perpetual
lease
Lease-to-
own
Upfront
sales with
financing
partner
Direct cash
sales
6
Consumer
buys a
service
Consumer
buys a
product
7. 7
The impact of off-grid solar at a glance
120.3 million
People with improved energy access,
cumulatively
28.6 million tons
Of greenhouse gas emissions
avoided
1.9 million
People using products for
income-generating activities
$5.2 billion
Savings on energy, since 2010
8. Global Highlights By region
Currently Pico-PV systems
(systems with wattage lower than 11
Wp) still account for
3,89 million sales
(94% of the total market
represented here)
Region
Products sold (units) *
incl. PAYGO unit sales
World 4.143.366
Sub-Saharan Africa 1.963.527
West Africa 291.120
East Africa 1.327.256
Central Africa 249.665
Southern Africa 23.291
South Asia 1.384.607
East Asia & Pacific 173.331
Latin America & Caribbean 54.048
Middle East & North Africa 453.022
Europe & Central Asia 114.973
North America 36.558
9. Top 10 Countries
Country names
Products sold (units) *
incl. PAYGO unit sales
Global
Volume
Share
India 1.255.174 30,29%
Kenya 502.099 12,12%
Congo, Dem.
Rep.
242.271 5,85%
Uganda 224.074 5,41%
Ethiopia 158.634 3,83%
Malawi 125.640 3,03%
Bangladesh 119.050 2,87%
Nigeria 107.576 2,60%
Tanzania 103.299 2,49%
Indonesia 100.650 2,43%
10. Preliminary Insights: Socioeconomic Impact Research
PAYG Data from EAC countries Altai Consulting / GOGLA Report (coming, July 2018)
10
Customers directly use their systems to create income:
22% of households report they use the SHS for business activities (e.g. phone charging, or
lighting a shop at night)
N.B. Please note that these data points
are preliminary, unweighted, examples
Customers use extra time to undertake more income generating activities:
37% of customers report a household member is able to work more since purchasing the
SHS, as they have more time (due to light in the am/pm, or less time spent travelling)
Early results show, as well as huge quality of life benefits, customers are able to create more income
11. Off-Grid Solar Energy Access: Uganda
Almost 1 million HH in Uganda are benefitting from improved energy access
4.77 million people in Uganda are benefitting from improved energy access
11
4.77 million
People with improved energy access,
estimated
12. TBD
Market Forecast
Source:2018 Off-Grid Solar Market Trends Report, Dalberg market model and analysis
200
450
250
350
300
30
150
100
400
00
120
50
90
60
434
40
2019
4
(12%)
2022
33
(82%)
24
(33%)
7
(18%)
39
(75%)
31
47
(67%)
27
(88%)
13
(25%)
52
2021
70
2018
336
23
(92%)
1
(4%)
2020
22
(96%)
2017
23 25
2
(8%)
Cumulative (base case)
PnP SHSCumulative (aggressive case)
Pico
OGS market forecast for pico and PnP SHS
Million units; left axis: annual sales; right axis: cumulative sales (2017-22)
Aggressive case: Annual total
sales growth: 30%
Base case: Annual total sales
growth: 25%
13. TBD
Note: 2017 figures include estimates of the acquisition of Fenix International by Engie and a follow-on investment from a consortium of investors led by Investec Asset
Management into Mobisol. This study has not been able to verify the size of these transactions, and estimates that they collectively fall in the range of USD 30-45 million;
Source: GOGLA 2018 Deals Database
2.4 9.8 21.3 25.4Avg. size of
top 5 transactions
2.8
Annual investment in OGS sector over time by type of financing
USD Millions (2012- YTD December 2017)
21
75
2013
56%
18
2012 2014
4%
3%
207
5%
+98%
40%
2016
317
56%
YTD
Dec 8, 2017
284
2015
61%
36%
40%
DebtEquityGrants
Avg. size of
overall transactions
1.0 3.1 5.6 5.01.4
Number of transactions 18 24 37 5715
31.7
4.0
79
5%
45%
50%
922
2012 YTD 2017
Type and Amount of Capital Attracted to Date
15. Energy Access is a Policy Choice
15
Policy Actions to Support Off-grid
Markets *
16. 16
Despite a buoyant market, the industry is being held back by
incidental developments and structural barriers
Impact on
market
reach and
growth
Access to
finance
Regulatory
environment
QA and
consumer
protection
Reduced
costs of
distribution
To reach off grid customers further faster, significant market
drivers need to be activated
17. Electrification Planning: Integrating Off-Grid
Initial electrification approach was heavily grid-oriented
Considerable capital investment required to meet targets
Yet many potential customers with limited electricity demand
GoR saw opportunity to better meet overarching access goals by also leveraging off-grid
solutions
New off-grid systems able to meet needs of many low-income households
Significant private-sector willingness to participate and invest
Lower investment requirement per connection relative to grid
Range of products offering higher levels of service
17
* The Case of Rwanda
Ref: Presentation by Peace Kalisa, Government Rwanda, 2018 Hong Kong Off Grid
Forum
18. Panel: Mainstreaming Off-Grid Solar in Uganda
Benon Bena, Head of Off-Grid Renewable Energy Development, Rural
Electrivfication Agency
Abhay Shah, Founder Ultratec
Peter Okubal, Country Representative Global Green Growth Institute
Oscar Ankunda, Energy Specialist for POWER AFRICA
Shelmith Theuri, Investment Officer, SunFunder
18
20. Thoughts / Questions: Energy Access as a Policy Choice
What policy actions are effective to build off-grid markets
What have we learned from the implementation of these policy actions
What are the opportunities and challenges for Governments and the private sector
working together
How can the collaboration between the Governments and the private sector be
improved?
20
21. What Governments Can Do:
Providing an Enabling Environment for Off-Grid Solar
Integrated Electrification Planning: the Key to Understanding
Challenges and Developing Solutions
Public Funding: How to Support Growth and Minimize the Risk of
Distortion
Lower Taxation: One of the Most E鍖ective Ways to Improve
A鍖ordability
Promoting Investment: How to Use Public Funding to Attract
Private Capital
Promoting Quality to Protect Consumers
Raising Public Awareness to Build Trust and Demand
Promoting Repair and Recycling to Improve Sustainability
Collaboration to Accelerate O鍖-Grid Energy Access
21
22. Thank you, and stay in touch
22
info@gogla.org
Come and meet us in Utrecht:
Arthur van Schendelstraat 500
3511 MH Utrecht
The Netherlands
+31 304 100 914
Follow us on
www.gogla.org
Editor's Notes
#3: Some background:
Over 2 billion people globally have no access to reliable electricity. Thats more than a quarter of the people on the planet.
The off-grid solar industry emerged in recent years as the quickest, best and most cost-efficient way to address this inequality.
As the industry association representing the industry, it is our job to do all we can to grow the sector quickly - to meet the demand but sustainably, ensuring the markets is made up of successful and profitable companies.
We know that market-based solutions are the way forward, but most companies are not yet profitable, and have limited capacities. GOGLA is addressing challenges which members individually cannot solve.
GOGLA relies on donor grant funding to leverage industry resources and thus generate much larger impact. We seek to raise circa USD 2 million/yr in donor core funding, and USD 2-3 million in project funding.
#4: But while the impacts are great, much of the market is untapped. There remains much to do to reach universal energy access by 2030 in just TWELVE YEARS.
Source: Bloomberg New Energy Finance Q1 2017 Off-Grid and Mini-Grid Market Outlook, p.12
#5: Some background:
Over 2 billion people globally have no access to reliable electricity. Thats more than a quarter of the people on the planet.
The off-grid solar industry emerged in recent years as the quickest, best and most cost-efficient way to address this inequality.
As the industry association representing the industry, it is our job to do all we can to grow the sector quickly - to meet the demand but sustainably, ensuring the markets is made up of successful and profitable companies.
We know that market-based solutions are the way forward, but most companies are not yet profitable, and have limited capacities. GOGLA is addressing challenges which members individually cannot solve.
GOGLA relies on donor grant funding to leverage industry resources and thus generate much larger impact. We seek to raise circa USD 2 million/yr in donor core funding, and USD 2-3 million in project funding.
#6: Solar lighting
Solar home systems & appliances such as TVs, fans, fridges
To a lesser extent street lighting
And now also expanding into productive use appliances
#7: The falling price of solar PV technology coupled with business models to make products more affordable to consumers who cannot make an upfront payment has enabled the growth of the off-grid sector in base-of-pyramid populations. As the consumers using these products are diverse, with different income levels and patterns, different needs, and different geographic locations, diverse business models have emerged to meet consumer needs.
Examples:
Rental Nuru Energy (Rwanda - pictured), Rural Spark (India)
Perpetual lease: FRES. Perpetual lease is more common in developed markets (USA: Origin Energy, Solarcity etc). Off-Grid Electric used to have something closer to this model with a 10 year lease. Difficult to square with volatile markets (a lot can happen in 10 years!)
Lease-to-own: most common, almost all PAYGO partners (picture here Simpa Networks)
Upfront sales with financing partner: e.g. MFI sales in Latin America, India and Bangladesh, Equity Bank solar loans in Kenya. Pictured here is a d.light S100: d.light sells products with various payment mechanisms, including PAYGO, cash, and MFI partners
Direct cash sales: most pico-solar products are available as cash sales. Pictured here is a distributor (Solarkiosk), which is making quality pico-solar available in extremely remote areas.
#8: These impact numbers, although impressive, are not showing full market. They are indicative of what the market is delivering and what it is capable of as it grows. These figures are based on data from 65 companies, from our last Sales and Impact report, which came out in October 2017.
#11: These impact numbers, although impressive, are not showing full market. They are indicative of what the market is delivering and what it is capable of as it grows. These figures are based on data from 65 companies, from our last Sales and Impact report, which came out in October 2017.
#12: These impact numbers, although impressive, are not showing full market. They are indicative of what the market is delivering and what it is capable of as it grows. These figures are based on data from 65 companies, from our last Sales and Impact report, which came out in October 2017.