Off-Grid Electricity Innovations in Sub-Saharan Africa: Lessons Learned
Off-Grid Electricity Innovations in Africa: Lessons Learned
The world has made significant progress towards achieving the Sustainable Development Goal 7 (SDG-7) targets for 2030. The share of the world’s population with access to electricity increased from 83 percent in 2010 to 90 percent in 2018.
However, despite progress made in the global quest for universal access to affordable, reliable, and sustainable renewable energy technologies, there are still 789 million people living without electricity. Much of the access deficit is concentrated in sub-Saharan Africa where about 548 million homes lack access as of 2018.
According to the World Bank, the primary challenges limiting access to affordable, reliable, and sustainable energy are:
1. Policy and governance: There is a need for a more robust policy framework to support innovators in this sector.
2. Investment: Increased financial coverage to enable early-stage off-grid entrepreneurs to grow their businesses.
3. Capacity: Currency depreciation is a big challenge for innovators, since it is hard to manufacture many of these technologies locally.
● If the off-grid electricity sector is going to fulfil its potential to bring access to millions more in sub-Saharan Africa, strong local physical infrastructure is fundamental.
These challenges highlight opportunities for increased collaboration across government stakeholders, private sector developers, and donors to increase the progress already made.
The innovators we spoke to for this blog post have been making inroads on the investment and capacity development challenges, as they continue to garner greater financial coverage and develop local capacity for their renewable energy products.
Why is this important?
Off-grid technologies powered by renewable energy sources (e.g., off-grid solar home systems) are often the only viable option for communities in sub-Saharan Africa. However, these technologies are not affordable to the poorest families in the community. According to the World Bank’s Regulatory Indicators for Sustainable Energy (RISE), the poorest 40 percent of households cannot afford subsistence level electricity consumption (30 kilowatt-hours) in nearly half of access deficit countries.
Many households cannot afford to pay the initial deposit for a rent-to-own solar-panel system, or the monthly payments required making it unsuitable in the context of many local economies. In addition, some households might have access to the grid but depending on the size of the grid, cost, and the amount of generated energy, access could be quite limited.
Closing the access gap by providing cleaner household energy solutions promises to advance several other SDGs, including gender, health, and education.
In this blog post, we will explore how ‘smart battery’ technology is being used to increase access to renewable energy in sub-Saharan Africa, and share lessons from the innovators doing the work.
What are people doing about it?
To help reach the bottom of the pyramid, innovative start-up companies have developed new technology that can power homes and support a sustainable business model. We spoke with leaders at three of these companies — Mobile Power, Jaza Energy, and 4R Digital — for this piece.
The innovation these companies are testing are ‘smart batteries’ — some of which are IoT (Internet of Things) enabled — distributed through a network of last-mile retail hubs. These hubs are typically powered by solar panels, and the batteries can be used in off-grid homes to power lights, mobile phones, and appliances for 1–2 days.
How does it work?
IoT employs sensors for transmitting real-time data to allow for optimal decision-making. In the case of smart batteries, the devices are designed with an IoT element, which provides innovators with the ability to collect data from a depleted battery when it is plugged into a charging station (i.e., charging patterns, what the batteries are used on, etc.). Benefits to using this technology include improved energy efficiency and reduced maintenance costs. One of the innovators we spoke to uses the data to react to supply and demand fluctuations in real time, allowing them to vary their pricing models and product offerings accordingly.
Although the business models vary by company, the core approach includes:
● Formative research (e.g., population data analysis, market research, surveys) to identify a location, primarily in rural areas where off-grid communities are underserved.
● Deployment of core infrastructure/assets (e.g., solar-powered central hubs and shop) where the smart batteries are charged and distributed to end-users.
● Trained local field agents and members of the community to operate and manage the charging stations.
A couple of the innovators we spoke to developed a pay-per-charge rental model to supply smart battery packs for low-income households, and one markets their products to businesses as well as consumers. Customers are able to rent batteries at the hub with cash or mobile money, so the country-level management is largely automated to minimize overhead costs.
What lessons have been learned about smart batteries?
Start At The Bottom Of The Pyramid. In target communities in sub-Saharan Africa, over a third of employed workers still live on less than $1.90 a day. Most families at this income level cannot afford solar home systems, so this is the market to engage. The assumption is that if they can profitably serve the lowest income segments, in some of the lowest income regions, then they can move up-market and take more significant risks in more urban locations or at higher points in the pyramid.
It is important to note that identifying who exactly is at the bottom of the pyramid, and how big that segment may be, is context and location specific.
Incorporate local ownership into your model. The innovators successfully developed partnerships with key leaders in the local community. In one model, the Chiefs and the community members take ownership of the field operations after the hubs are installed. The people who help run the hubs that deliver the battery technology are then responsible to their community member customer base.
Such design allows innovators the ability to build public awareness about their services and leverage the trust within local networks. This type of ownership enables the local economy to build itself while freeing up innovators to focus on improving the technology and scaling up of solutions.
In one model, young women are hired exclusively to run smart battery power hubs. This push toward gender equity also improves the governance and sustainability of the innovation. For many of these women, this is their first job and the female-only workforce will hopefully close the gender gap in employment and skills development.
Keep your customers front and centre. The innovators we spoke with go above and beyond to listen to their customers and anticipate their future needs. One innovator required the entire leadership team to spend a week (per month) in the communities they serve. This helps companies better understand how their products impact lives and how the products are used on a daily basis. It also helps raise awareness on what pain-points they need to solve for.
The Frontier Tech Hub is grateful to these innovators for sharing their stories. We hope that these lessons are broadly applicable to innovators working in underserved communities, and particularly useful to those thinking about accessible, affordable, and sustainable energy.
To find out more about these companies, here are some helpful resources:
● Jaza Energy posts great thought pieces on their work on the ground on Medium
● This ITP Energised report offers a great profile of Mobile Power
● 4R Digital recently published a thought piece on their battery rental model on Medium, as well.
These technologies have the potential to reach millions of people left behind by energy markets, and we are enjoying the learning journey from these innovators and readers like you.
What areas and markets do you think lend themselves to these types of innovations? How do you see these technologies connecting to existing solutions?
