With nearly two years since it began, the effects of Covid-19 can be seen in every industry, community, and trend worldwide, and with great dichotomies. While delivery services, telehealth providers, and fitness equipment companies soared, tourism, aviation, oil & gas, and shared office spaces crashed hard. Companies and consumers around the world were and still are affected by vast lockdowns, changing local policies, and growing inflation, among others, and economic influences are becoming more evident with time.
Solar off-grid is yet another sector moved by the pandemic. As the industry services low-income communities in Africa and South Asia, its effects are arguably much more devastating.
Last week, GOGLA, the global association for the off-grid solar energy industry, released its semi-annual Sales and Impact Report. According to the organization, the reversal in the growth of the off-grid solar market led to an estimated 12-23 million people missing out on improved energy access, and Covid is the main reason.
The comprehensive document specifies global off-grid solar trends for the first half of 2021, and the numbers tell some interesting stories.
Rwanda shines bright
From January to June of 2021, 3.5 million off-grid products were sold worldwide, and over 2 million were in east Africa. Albeit a 9% decrease from the second half of 2020, the number is 15% higher than the first half of 2019, and since solar sales are highly seasonal in the region, that would be the best comparison.
Kenya represents close to half of all sales in East Africa. Although the Kenyan market has been affected by Covid-19 and policy changes, it remained relatively stable compared to harder-hit countries like Ethiopia and Uganda. Ethiopia remains the second-largest market in volumes, representing 12% of total sales in East Africa. Still, it has seen sales drop significantly since 2019, with Covid and ongoing political conflicts at fault. Almost all East African countries on the list witnessed decreases in sale volumes thanks to worsening regulatory environments and complex Covid effects.
Rwanda comes in fifth place with almost 100,000 units sold. The country is the only one that witnessed constant growth in sales, albeit extended lockdowns and massive financial hits. 2021 H1 sales are higher by 30%, 103%, and 50% than H2 2020, H2 2019, and H1 2019, respectively. An enabling regulatory environment, BRD - World Bank funds, and strong solar companies working in the country are some of the critical ingredients that allowed this growth, responsible for millions who are now enjoying power in their homes for the first time.
Looking at solar-based appliances, including TVs, refrigeration units, fans, and solar water pumps (SWP), the only product that saw a growing trend across east Africa was SWPs, while sales more than doubled worldwide. The growth can be attributed to the SWP’s productive nature, compared to other appliances such as TVs that are more entertaining. Fans and refrigeration units fall under the comfort categories. Water pumps are slowly but surely becoming a crucial investment for the region’s agriculture sector, which employs over 70% of the population, and is in charge of 23% of GDP (and in some countries much more). Local farmers report up to 3 times more yields, prolonged harvesting seasons, and as much as 75% higher incomes, all thanks to the solar pumps that replace rainwater or obsolete diesel-based pumps. More inclusive payment schemes are required for the pumps to reach massive circulation that could change the food security situation for hundreds of millions.
Resilient entrepreneurs
The report shines a light on the sector’s resilience, as millions across the continent could still connect during these challenging times. That resilience was powered by companies that adapted their product offering to cope with supply issues, maintained affordability despite increasing costs, and insisted on getting certified as essential workers during the long lockdown periods. Support from various partners, including investors, governments, and development agencies that continued backing off-grid initiatives through funds and regulations, also played a crucial part in the sector’s development.
For East Africa as a whole, sales are 18% lower than during the second half of 2019 before the pandemic. Despite providing the fastest and most affordable way to electrify hundreds of millions of people, solar off-grid solutions decreased sales. Subsequently, millions of lives lost out on the opportunity for a better future. Let’s circle back to the 23 million people who could have been enjoying electricity in their homes as we speak. The pandemic exacerbated the harsh reality of energy poverty, with those lacking it hit the hardest. The pandemic led tens of millions under the extreme poverty line, and millions more will be joining soon. With Africa’s financial recovery legging behind other parts of the world due to initial hardships, lack of development funds, and poor vaccine rollouts, every development activity that could induce inclusiveness is vital.
Investing in off-grid electrification solutions that connect the most underserved communities has never been more crucial. With relatively modest funds, tens and even hundreds of millions could live above the poverty line, give their children a better education, earn more money, have safer homes, and look ahead to a better future. Governments must adapt their regulations and investments, international organisations must continue and even increase their focus, and local entrepreneurs should continue with their path — every home counts.
The writer is an entrepreneur and investor,leading sustainability-driven companies in Africa and the Middle East