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GOGLA
Off-Grid Solar Market Trends and Linkages to Policy
The Case for Mainstreaming Off-Grid solar in the Electrification Mix
1
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
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
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
What are Off-Grid Solar Products?
Solar
Lanterns
Solar Home
Systems
+ Household
Appliances
Community &
Street Lighting
Off-grid Productive
Use Appliances
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
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
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
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%
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
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
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%
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
Funding
Raised per
Region 2012
- 2017
14Source: GOGLA 2018 Deals Database; Off-Grid Solar Market Trends Report
Energy Access is a Policy Choice
15
Policy Actions to Support Off-grid
Markets *
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
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
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
Thoughts / Questions: Energy Access Ladder
19
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
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
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

More Related Content

Off-Grid Solar Market Trends and Linkages to Policy

  • 1. www.gogla.org GOGLA Off-Grid Solar Market Trends and Linkages to Policy The Case for Mainstreaming Off-Grid solar in the Electrification Mix 1
  • 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
  • 14. Funding Raised per Region 2012 - 2017 14Source: GOGLA 2018 Deals Database; Off-Grid Solar Market Trends Report
  • 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
  • 19. Thoughts / Questions: Energy Access Ladder 19
  • 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.