The future is not linear: Circular business models and innovations are taking the off-grid solar industry further

At the industry’s first Circularity Carnival, attendees shared their experiences, lessons and achievements so far; discussed solutions and ideas for repair, refurbishment, recycling and battery innovations; explored how the industry can achieve even greater circularity through effective enabling environments; and saw first hand how Enviroserve Rwanda is tackling e-waste from off-grid solar and developing second-life batteries at their recycling facility in Bugesera.

Here are the highlights from Carnival, and the next steps the industry must take in 2023 and beyond to keep up momentum; realise the vast potential for consumer choice, jobs, and environmental safeguarding; and strengthen collaboration across the sector.

Companies are innovating and good practices are emerging 

From modular systems and product refurbishment, to repair services and second-life batteries, companies are innovating around circularity across the value chain. New partnerships are also being established to enhance the circular opportunities.

Walking around the Expo, it was clear to see the growing number of off-grid solar products that have been designed with circularity at their heart – embracing modularity. Modular batteries in a solar home system (SHS) allow a customer to add power capacity over time, but also enable them to replace just the battery once it reaches end-of-life rather than needing to dispose of the whole product.

Knowledge transfer will be critical to advancing circularity – there is much off-grid solar companies can learn and share internally and with adjacent industries who are also working towards circular models. GSMA explained how Mobile Network Operators (MNOs) are approaching e-waste management, and IOM with GPA shared insights into their battery repair and recycling initiatives  in BidiBidi refugee camp, Uganda. This kind of idea and knowledge exchange is often the first step to building collaborations, breaking down silos and fully utilising limited industry resources to maximum effect.

We heard from SunKing about their mission to integrate circularity across their operating model and d.light and SunnyMoney about their projects to advance consumer awareness, take-back and repair services. d.light and SunnyMoney initially leveraged funding via the Global LEAP Solar E-Waste Challenge, demonstrating the catalytic effect that challenge funds can have on laying foundations for long-term change.

To complete the circular ecosystem, recycling facilities are vital not only for dismantling and disposal of e-waste, but can play a role in reuse and repurposing of lithium batteries. On the second day of the Carnival, Enviroserve Rwanda showcased their recycling facilities – some of the most advanced in off-grid markets – and their work with Aceleron to dismantle, test and repurpose off-grid solar batteries. Enviroserve is currently utilising only 30% of their recycling capacity, showing that the opportunity for greater collaboration between off-grid solar companies and recyclers is huge if barriers to access can be overcome.

Events like the Circularity Carnival show that the industry is open to working collaboratively and collectively to find solutions to common barriers to circularity. With blue-sky thinking encouraged, attendees from across the industry shared ideas and opportunities for repair, refurbishment, take-back and recycling, and battery innovations.

It is overarchingly accepted that there is economic and environmental value in repair and refurbishment – with positive impact on both consumers and companies. Many companies are already offering repair services and are beginning to experiment with refurbished product lines, though efforts can be expanded further and guidance around quality and marketing standards is needed. The industry can increase efforts in a number of areas:

• The journey to reparability begins at the product design stage. It is vital that industry prioritises and allocates resources for innovation at this part of the product lifecycle, which should consider component modularity/replaceability, reduced use of hazardous materials and collaboration to create standardised, interoperable components which will reduce the overall cost of repair and refurbishment.
• Policy support can take a holistic view of ‘end-of-life’ management, beyond looking at only recycling. Regulatory efforts that support repair and refurbishment can include provision of EPR rebates linked to increased reparability and the resulting reduced waste quantities; labelling requirements for repaired and refurbished products to increase transparency and build customer confidence; development of reparability indices for off-grid solar products, and refurbishment guidelines/standards for quality assurance.
• Effective repair and refurbishment models will require skills and capacity across the industry. Localised design, sourcing, assembly and manufacturing can contribute to increased capacity for repair and refurbishment, and training and provision of open-source manuals in local languages can also be considered to increase the expertise of existing informal repair economies that carry out many existing repairs.
• Specialisation within the value chain via centralised repair and refurbishment centres, built on collaboration from across the sector could enhance efficiency, quality and costs.

Effective take back and recycling requires a three-pronged approach consisting of effective consumer awareness, specialised infrastructure and supportive regulatory frameworks. To counter low awareness among consumers, companies are beginning to utilise existing communication channels for education and leverage distribution channels for reverse logistics, but struggle to access appropriate recycling facilities for collected e-waste in many markets. Beyond investment, opportunities to expand access to existing facilities (e.g., through e-waste aggregation or transborder pathways) and build new partnerships can be sought.

While some industry development partners have already begun to encourage companies to implement take-back schemes, additional awareness raising activities across this stakeholder group could galvanise new funding and support to help companies expand consumer education and take-back schemes and implement basic steps such as training and safe storage – before the recycling infrastructure can catch up.

Batteries are the heart of off-grid solar systems and innovations to extend their lifespan are gaining pace. With the growth of lithium-based batteries, new solutions have been developed and tested by a few players in the off-grid solar industry to extend battery life and meet market needs for locally available, lower cost batteries. Linkages with the adjacent and growing e-mobility sector provide opportunities for consistent supply of used battery cells, while continued testing and demonstration with off-grid solar use cases, and development of quality standards, will build confidence and encourage wider adoption across the off-grid solar industry.

The enabling environment needs to catch up  

Effective policy is vital but is not the only ingredient of an enabling environment that fosters circularity. Sound Extended Producer Responsibility (EPR) regulation and enforcement is needed (and gaining momentum in off-grid solar markets), alongside the increased uptake of product quality standards. Equally though, all aspects of the enabling environment should be available and strengthened, including social, physical and financial. This broader “toolbox” includes measures that support and incentivize different players across the value chain (e.g., SMEs vs. multinational off-grid solar companies; manufacturers; recyclers) and is the way forward for promoting effective e-waste management and by extension, circularity.

We heard from the different stakeholders what they needed to succeed, and what they expected from others:

• Strengthened national and institutional regulatory frameworks anchored on EPR mechanisms will create a level playing field for responsible off-grid solar companies but should be designed in close collaboration with stakeholders, as has been demonstrated in Rwanda and Kenya recently.
• Innovative thinking is also required to ease friction for transboundary movement of e-waste – for example, through ‘green’ channels – which can help companies access recycling infrastructure and build demand (and business sustainability) for nascent recycling services.
• In many off-grid markets, safe storage of e-waste is currently the most viable option due to lack of recycling infrastructure and complexity of exportation. Enabling the recycling sector to fill-in the gap requires direct infrastructure investments (e.g., through PPPs), recycler enterprise financing (including guarantees), investment incentives (e.g., encouraging battery producers to also undertake recycling) and matchmaking with off-grid solar companies.
• The donor community has to be ambitious but hold on to realistic expectations. The full ‘toolbox’ should be utilised and tailored to specific company (SME vs multinationals) and country contexts. Minimum programme eligibility criteria (to enable access to financing) needs to be bolstered with support mechanisms like tailored technical assistance (advisory, guidelines, training) and financing mechanisms (grants, credit lines, risk sharing set-ups like PPP, subsidies, and tax exemptions). Donors can also coordinate with others to reach scale, such as to bring attention to the e-waste issue and circularity opportunities on a national and regional-level to encourage effective policy, administrative, and infrastructure reforms.
• Finally, collaboration and partnerships are key. Effective collaboration between off-grid solar and adjacent industries and across different stakeholder types (associations, development partners, investors, recyclers, companies) is critically needed to capture lessons learned, scale up good practice, and jointly innovate where gaps exist. E-waste and circularity require system-level work that goes beyond the remit of any single stakeholder, so continued industry-level collaboration is a must.