Off-grid solar is moving into the performance zone
May 29, 2019
Koen Peters, GOGLA Executive Director
The off-grid solar industry has always been bold and ambitious, from day one. Our members have truly brought about transformative change. The industry is making a lasting economic, social and environmental impact; and GOGLA is incredibly proud to represent such vital change-makers.
The achievements of our industry to date are clear. We have provided 245 million people with access to affordable, clean electricity with off-grid solar in just nine years. An estimated 4.9 million people across Africa and Asia are currently undertaking more economic activity as a result of our work. This week we launched our new Global Off-Grid Solar Market Report showing that since 2010, GOGLA members and IFC Lighting Global affiliates have sold 42 million products. Last year alone, the market value of products sold was over $480 million ($207 million for products sold for cash, and $276 million for products sold as PAYGo).
Yet, we remain still at the beginning. To reach all our potential customers, we need to go further, faster. As the latest SDG7 Energy Tracking Report highlights, there are still 840 million people without access to electricity. Forecasts anticipate that the market for off-grid solar products will continue to grow, and serve hundreds of millions of people more in the years to come. However, such sustained growth is not a given. To achieve that, the industry must perform. Perform for investors, perform for consumers and meet the needs of all those we work with.
In the last weeks, news about two prominent GOGLA members filing for insolvency, Mobisol and Solarkiosk, made headlines in the media. Both companies remain hopeful that they can restructure and re-emerge as stronger companies; their affiliates in local markets so far remain unaffected by the restructuring of the German entity and continue to serve their customers. Whilst this news is regrettable, and genuinely painful for their investors, it is also natural that such events occur in a fast moving industry, operating in a difficult environment. M-Kopa’s CEO Jesse Moore thought so as well; Lighting Global addresses this in their latest blog too.
We believe the industry as a whole remains strong. Evidence of this, for example, comes in the form of healthy growth in Solar Home Systems (SHS) sales as reported in the latest sales report, as well as the continued investor interest we recently reported. USD 352 million was invested in our industry last year, with a growing number of transactions and investors, and particular increase in debt funding. To retain and grow this interest, however, our focus needs to be on creating better insights in the financial and operational success of the industry, to demonstrate how companies can meet expectations of their investors. Our work on e.g. the PAYGo Perform project jointly with CGAP and IFC Lighting Global remains very relevant for this.
As the industry evolves, we know that responsible growth and great performance means putting consumers first too. That's why we've launched new services to help our members do just this, to guide and lead best practice. Our Consumer Protection Code aims to set the standard of best practice for the sector. The Code is a set of six principles on how off-grid solar companies should engage with their customers and furthers one of the three main outcomes of our work: quality assurance and consumer protection. We’re already seeing many acting, but this must become mainstream practice. Consumers are the driving force of the market and to thrive, the off-grid solar industry must put consumers first.
Finally, we know that knowledge and understanding is key to supporting the industry. Our industry needs a bold and clear voice – and this remains one of our prime objectives. We know our response, for example, to the Economist off-grid solar article was seen as an important response to significant misconceptions on the industry. We will continue to set the record straight, and more than that - be more proactive on information sharing. To strengthen our presence we have refreshed our brand – endorsing our aim to be bold, clear and ambitious in our communications reflecting the dynamic change makers we know you are.
We'll continue to bring together the industry. First, at our annual member conference in June – where our members and partners will discuss the latest sector trends and get insights into ongoing projects. Later, we look forward to meeting all sector stakeholders at USC Africa in Dakar in October, and at our Global Forum in Nairobi in February 2020. Together we will lift our performance to go further, faster in achieving our mission of bringing the solar power solutions of GOGLA members to those without.