Off-grid Renewables: A Bottom-Up Movement

Fact #1: 32 billion metric tons - the level of global CO2 emissions in our atmosphere on November 30th, as COP21 commences in Paris. Fact #2: Global temperatures are on track to exceed the 1°C threshold above pre-industrial levels by the end of 2015. Fact #3: Climate pledges to date, dubbed INDCs, are insufficient in containing global warming within the internationally agreed limit of  2° C beyond which life on planet Earth would change irrevocably, impacting the African continent the most. Fact #4: Two thirds of GHG emissions are attributed to the energy sector. Fact #5: Africa’s rapidly burgeoning population growth and recent economic progress have resulted in energy demand consistently outpacing supply. Fact #6: 2 out of 3 African inhabitants (approximately 620 million), mostly in rural areas, lack access to modern energy sources, heavily relying on unsustainable biomass for cooking/heating.


Enter off-grid renewables.


Sustainably tackling the energy and climate change crisis in tandem necessitates an amalgamation of both grid-based and off-grid based solutions (stand-alone and mini/micro-grids). The International Energy Agency estimates that almost 60% of the supplementary electricity generation must emanate from off-grid renewables to meet the aim of universal energy access enshrined in the recently adopted UN Sustainable Development Goals. Widely touted as the answer to rural electrification challenges tenaciously plaguing Africa, distributed renewable energy systems present an unparalleled opportunity to accelerate the transition to modern energy services and clean, reliable and cost-effective power.


The upswing in decentralized energy can massively impact energy independence. Power generation need no longer remain the domain of the national grid or major utilities, particularly in areas devoid of grid connection. Crucially, the declining costs of solar PV have the made this renewable energy technology the most economical source of power for off-grid electrification, particularly in rural areas where it is not both technically and economically feasible to extend the grid. Although biomass, hydropower and wind can be harnessed for off-grid systems, as Africa boasts one of the highest solar irradiances in the world (up to 325 days of bright sunlight annually in numerous countries), solar off-grid solutions offer much promise. Moreover, they can out-perform diesel-fired generation or kerosene-based conventional lighting, reducing the need for imported fuel – a huge expenditure in many developing countries. In addition, off-grid renewables in islands nations, which often have abundant renewable resources but due to their isolation are beleaguered with high costs of imported fossil fuels, offer an unprecedented opportunity. Finally, the decentralized nature of off-grid solutions by and large translates into the localization of a number of stages of the technology value chain, preserving value locally, thereby ameliorating energy access endeavors.


There have been positive developments in the off-grid renewables sphere in Africa, notably in Morocco, Kenya, South Africa, Mali, Rwanda, Tanzania and Equatorial Guinea. Innovative financing solutions such as Kenya’s M-PESA have revolutionized microfinance, permitting anyone with a cellphone to send/receive money. M-KOPA was thus a success, providing solar power to more than 140,000 households in East Africa for USD 0.45/day, with figures increasing to 4,000 homes weekly.  Akon Lighting Africa is enabling solar electrification to African communities. General Electric is working on a sun-powered micro-grid on an island in Equatorial Guinea. The Jumeme Rural Power Supply Ltd. partnership is building a micro-grid for 16 villages in Tanzania. And so it goes. Despite the hype surrounding off-grid solutions, however, serious challenges in scaling up off-grids persist such as dedicated policy support from governments and financing, to name a few. Off-grid pilot projects benefitting a few areas still take the lion share in Africa.


Much can be learnt from Bangladesh - a vanguard in the off-grid renewable energy transformation, deploying 65 000 solar home systems a month, boasting average year-on-year growth of 60%. By 2014, the programme had revolutionized the lives of 14 million people, with 3.2 million installations. Moreover, it has powered the development of a vigorous domestic industry, creating employment for approximately 70,000 people. Momentously, it attests to the fact that electrification programmes aimed at poor communities hold promise in scalability and sustainability.


The country’s success can essentially be traced back to a robust off-grid policy and regulatory framework. The leadership’s visionary commitment in appreciating the effectiveness of off-grid renewable energy in rural electrification efforts was vital, depending on public-private partnerships to rapidly scale up. It set up a dedicated government-owned financial outfit, together with numerous micro-finance institutions and NGOs, exclusively towards this effort. In addition, the government created an enabling environment for fostering technology adoption, namely setting renewable energy targets, introducing fiscal incentives and permitting operational autonomy to implementing agencies, which provided the right signals for private sector participation. Bangladesh thus possessed the right business model to make off-grids work.


The business case for off-grid renewables has been made. Significantly, there needs to be a shift from NGO-dominated, solely grant-based approaches towards more sustainable business models for widespread replication to be a reality. African governments ought to cease this opportunity, ‘put the African sun at work’ and light up their rural communities.


Mekalia Paulos is a Researcher in Renewable Energy & Climate Change at the African Climate Policy Centre (ACPC), Special Initiative Division of the UN Economic Commission for Africa (UNECA).


Opinions expressed in the ACPC Climate Diaries are the authors’ personal views and do not represent the view of ACPC. ACPC accepts no liability for use of or reliance on information found in the Climate Diaries.