Disaggregation is coming to off-grid energy in Africa
It has been a challenging year for the off-grid energy industry in sub-Saharan Africa with pioneers of the industry such as Mobisol running into financial difficulty.
For the past 10–15 years , the PAYG energy industry for solar home systems has been dominated by large players that address the full value-chain from: Hardware >> Software >> Distribution and After-Sales Support
However, due the complexity and cost of operating all the elements of the value chain, many of these companies struggle to achieve profitability. The difficulties around finding a path to a timely exit are covered in detail in Acumens report (https://acumen.org/energy-exits-report/).
This has created the stage for small, flexible and innovative players to enter the sector as specialists.
Manufacturers focus on providing robust, low-cost, sustainable technologies and need distributors to get their product to market.
Distributors focus on understanding local markets and building long-term relationships with their clients. They need software to manage their operations as they often do not have the bandwidth to build or manage their own IT systems.
Software specialists focus on providing a licensable solution to distributors and must integrate with MNO’s and hardware suppliers to allow distributors to seamlessly offer a wide range of product. In addition, they must keep innovating on the sales and after-sales experience to help drive their distributor clients growth.
All of the companies operating in the space have a common goal to improve access to energy in the developing world. The disruption in the market driven these small and nimble specialists should be celebrated as the disaggregation can lead to lower-costs and more affordable electricity access for BOP end-users and more job creation and entrepreneurial opportunities in underdeveloped areas.
