We see off-grid solar transforming lives

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We see off-grid solar transforming lives

TOGETHER WITH many of our members and partners, we certainly had something to say about The Economist’s latest article ('Light to All Nations?' 7 February) claiming that energy access “does not transform peoples’ lives”. The contribution ignores the increasing evidence for the life-changing impact of access to clean and reliable electricity.

Here is our full response from GOGLA's Executive Director Koen Peters:

11 February 2019

Dear Sir,

In seeking to examine the benefits of bringing electricity to rural off-grid areas, Electricity does not change poor lives as much as was thought  (in print: Light to All Nations? February 7th), overlooks substantial evidence of the positive economic impact of off-grid solar energy.

The piece concludes that off-grid solar electricity ‘does not transform peoples’ lives’. However, our understanding is indeed the polar opposite.

Fundamentally, we do see electricity changing the lives of the world’s poorest. ‘Powering Opportunity’ (GOGLA, 2018) saw households using small scale-solar power in East Africa reporting a rise in economic activity, with improvement in income and job opportunities. It showed almost 60% of new owners undertaking more economic activity within just three months of using a solar home system; as they work longer, start businesses or get a new job and clearly demonstrates the economic benefits of off-grid solar power in the developing world. Within the first three months of solar ownership, this access to electricity enabled them to increase their monthly income by an average of $35 a month, more than half the average monthly GDP per capita. Our research, funded by The UK’s Department for International Development (DfID), was based on extensive data collected from over 2,300 small-scale pay-as-you-go (PAYG) solar owners in Kenya, Mozambique, Rwanda, Tanzania and Uganda in Spring 2018.

This is not an insignificant market. Just under 1 billion people have no access to electricity, and it’s a UN Sustainable Development Goal (SDG) to address this with clean, affordable power by 2030. Since 2010, the off-grid solar industry has been growing fast and addressing this need, innovating with products and services to provide 360 million people with solar energy (Off-Grid Solar Market Trends Report, Dalberg, IFC, 2018). 

Far from being the poor return on investment implied, we see the net economic and social benefits of off-grid solar as a huge opportunity for nations in the developing world. Our research shows that the off-grid solar industry transforms lives and is making a lasting economic, social and environmental impact. The products and services provided by the industry are reducing CO2 emissions, improving health and education, creating jobs and income opportunities and helping consumers save money. This is a win-win situation that is clearly missed in your latest exploration of the impact of electricity access.

Benefiting households directly, rather than ‘just businesses’ as implied, solar lanterns sold since 2010 are estimated to save users over US$ 8 billion over the products' lifetime (GOGLA, 2018). With basic solar lanterns now costing between $5-15, this releases the financial burden of kerosene for millions of families across Africa. A light may not lift someone entirely from poverty, but these lights are saving families almost $200 across a three year period (GOGLA, Global Off-Grid Solar Market Report, H1, 2018), and at the same time, improving their health, safety and extending their living or working day.

Meanwhile, far from being for the ‘middle classes’ alone, solar lanterns and home systems are primarily benefiting poor and low-income families. Acumen, an investor in off-grid solar, mini-grids and clean cooking, reports that 35 percent of the customers the companies it invests in serve live below the poverty line and a further 38 percent live on under $6 a day (Acumen, Energy Impact Report, 2017).  

This economic change is neither piecemeal nor insignificant, as implied. It is no less than transformational for the worlds poorest. From India to East Africa new solar water pumps have the potential to double crop yields (Shell Foundation, 2017). As weather patterns change with climate change, with the increasing recurrence of drought in many developing regions, the impact of such technology is only set to increase. Furthermore, a new range of solar refrigerators, milling and welding machinery is now reaching rural markets in developing countries opening up the opportunity for new businesses and income generation.

Our expectation is that editorial writing on the subject is well informed, balanced and constructive in a way that actively works towards building the essential clean technology industries of the future. Indeed, quite in contrast to the view presented in the article, we call on policy makers, treasury and energy departments to work together with off-grid companies, banks and institutions to breakdown barriers to off-grid solar and build a pathway to accelerate energy access. We believe that with the right support, the off-grid solar market can scale to provide affordable solar power products and services to provide electricity to those with weak grid connections and the just under 1 billion people currently living without energy by 2030, in line with Sustainable Development Goal (SDG) 7.

Clean, affordable electricity access is one of the most important issues of our time and the renewable energy industry is one of the most-fast growing and innovative. Moving forward, we ask for encouragement of the rapid growth of such positive economic development as the world tackles not only poverty but the ever-worsening effects of climate change.

Koen Peters
Executive Director
GOGLA - The voice of the off-grid solar energy industry
Arthur van Schendelstraat 500A
3511 MH Utrecht
The Netherlands

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