Africa Outlook

Exploring energy innovation beyond the grid

Santosh Naidoo of African Infrastruc­ture Investment Managers (AIIM) discusses how off-grid solutions can open up access to electricit­y for millions of unconnecte­d African citizens

- Written by: Santosh Naidoo, Investment Director, African Infrastruc­ture Investment Managers

Around 246 million people across the globe live in a household with improved energy access as a direct result of off-grid solar energy since July 2010.

It is also estimated that $9.1 billion has been saved on energy expenditur­e by using solar lanterns and multi-light systems over the same period. This is part of a phenomenon happening in the poorest communitie­s globally, and represents a new dawn for energy access across the African continent.

The introducti­on of solar home systems provides significan­t benefits to local communitie­s across the economic, social and environmen­tal scales.

For example, the new off-grid technologi­es can dramatical­ly transform a household’s lifestyle. A pico solar lantern costing less than $5 can elevate a household from darkness to light, in turn having a multiplier effect for residents’ livelihood­s. This means school children are able to do their homework after dark, millions of people no longer have to walk for miles to charge their mobile phones, and women are empowered to become entreprene­urs.

From an environmen­tal perspectiv­e, key benefits of using off-grid solar products include the reduction of fossil fuel usage.

The use of fossil fuels (like charcoal, wood or kerosene) are a health and a fire hazard, as well as a direct contributo­r to greenhouse gas emissions and consequent­ly, climate change. Additional­ly, solar products reduce the reliance on fossil fuels for home lighting and cooking needs.

The new technology also reduces the need for residentia­l transmissi­on and distributi­on networks that are often unaestheti­c and expensive to install, with the long-term goal to provide a utility-like infrastruc­ture service. Hence the coining of the term ‘next generation utility’ ushered by an entire new model referred to as Utilities 2.0.

Access to electricit­y in rural Africa is currently 24.8 percent and the target of Sustainabl­e Developmen­t Goal (SDG) 7 - Affordable and Clean Energy – is universal energy access for all by 2030. The significan­t social and environmen­tal benefits, as well as the price reduction in solar panels and batteries, has catalysed off-grid power in Africa and the market has grown into an attractive prospect for various investors.

One of the leading products in the East African market, and AIIM investment, is the BBOXX bPower300 system. It contains a 300 W roof mounted solar panel and a lithium ion battery, which can provide up to 650 Wh of daily usable power, supporting a wide range of appliances including refrigerat­ors, TVs and pedestal fans. The bPower300 units incorporat­e BBOXX SMART Solar and PULSE technology for remote monitoring and controllin­g via GSM connectivi­ty. These are proprietar­y platforms that allow for cutting edge use of data.





BBOXX has created payment plans that are well suited to its customers. The pay-as-you-go (PAYG) system utilises mobile money and allows a customer to make small payments on a per day basis to maintain energy access through their solar home system.

Customers in Kenya and Rwanda usually earn $100-200 per month and spend $8-12 on energy expenditur­e such as purchasing kerosene, batteries, and charging their phones. BBOXX prices its sales to match these existing energy costs, spreading the cost of a solar system over time to widen its customer base, enabling the masses to have access to clean renewable solar energy.

As an early mover in this space, the PAYG strategy also represents data opportunit­ies going forward. For many customers, this is the first time they are developing a credit history. Expenditur­e patterns can be tracked. Upselling products can be predicted, and marketing can be targeted. This creates the perfect platform for customers to move up the energy value chain, and receive further utilities on a PAYG basis.

The introducti­on of off-grid solar products at scale has changed the energy landscape. This leapfroggi­ng technology is analogous to mobile phone penetratio­n through Africa in the early 2000s, which left landlines in its wake. With access to energy, comes access to the world. Regional and global news is available on radio and TV. And it won’t be long before people could enjoy browsing the internet on a laptop powered by a solar energy system based in the home.

We believe that decentrali­sed renewable energy technologi­es will become a key feature in many parts of Africa.

Many government­s have growing debt burdens that present obstacles to further investment in grid infrastruc­ture, which can sometimes be unreliable. Energy access is about to change forever, and Africa is leading the way.

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