News: What’s next in the off-grid energy revolution?

7 January 2019, Dr. Silvia Emili, Category: All insights, News, Tags: , , , , , , , , , , , , , , , ,

As nominations for the 2019 Ashden Awards have been announced I’m reflecting on last summer’s Ashden conference and award ceremony – two events which provided an excellent opportunity to engage with practitioners who are finding innovative ways to provide sustainable energy to over one billion unelectrified people. With the need to overcome financing and regulatory barriers for providing energy access in low-income and developing contexts, what’s next in the off-grid energy sector?

The imperative is clear

We need to move beyond providing watts of electricity and towards a holistic approach that encompasses multiple energy services that communities need to move out of the poverty trap.These include the provision of efficient appliances for productive uses, innovative payment technologies, and services such as maintenance, upgrade and end-of-life collection. Selling goods in hard-to-reach remote communities is challenging, with affordability and technology awareness constituting some of the biggest obstacles. However, selling energy as a service requires even more innovative interventions, at different levels of the supply chain. We are seeing companies such as Lumos using existing marketing and distribution networks, while others such as Solar Sisters and Frontier Markets are championing last-mile distribution by tapping into women’s networks. An increasing number of companies are diversifying offers by providing energy products through rental, and leasing business models.

End of life strategies?

Although most of the focus has been on making sure that clean technologies reach off-grid markets, even more attention should be paid to ensure that these products are properly used, maintained and disposed of. An urgent conversation about the need to provide a full-service energy package that includes maintenance, repair, recycling and end-of-life services still has not reached mainstream audiences. In many cases, reliability of energy services is the main issue, thus shifting responsibilities from customers to providers is the only solution to ensure long-term sustainability.

GDPR in developing contexts

Understanding customer behaviour and needs through remote monitoring is increasingly becoming the main value proposition for solar companies such as Bboxx, Angaza and SteamaCo. This demonstrates that the off-grid market is becoming more mature and dis-aggregated, with companies specialising into software and hardware providers. According to Bloomberg, the value of digitalisation is close to $17 billion in these markets, and we might soon see companies specialising in data aggregation that can attract investments. However, data portability needs to be included into a very urgent discussion about monetising data and consequent issues with privacy and accountability. In mature markets such as the EU, data protection is highly regulated (see GDPR) and customers are mostly aware of what has been tracked from various devices they use regularly. But are customers in remote villages in low-income and developing contexts aware of how their data is being used? How much information is provided to a rural household that gets a solar home system installed? How are low-income, and often semi-illiterate energy-poor people expected to be aware of how their data is used and how it is monetised?

What next?

Business in low-income markets has to be done differently. Leapfrogging of centralised, unsustainable energy generation by using clean and distributed energy is already happening, and it is widely considered to be the fastest way to electrify 1.2 billion people. However, innovation is still needed to ensure that we also shift from a consumption-oriented way of doing business towards energy provision that is service-based, ensuring that products have both a long life and appropriate disposal, and that customers can make informed decisions about their data. What I hope to see in the coming years is an increase of businesses’ responsibilities regarding the whole product life cycle and regarding data protection.

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