Solar energy generation has been well-established as a low-cost and proven technology in the energy mix. However, core issues related to intermittency have made it challenging to effectively incorporate solar into a reliable energy system.

“The root cause for the slow adoption of solar energy in Africa is the lack of storage deployments. Solar is an easy-to-deploy and mature technology; however, the lack of storage prohibits the impact of solar energy in the markets that need it most,” says Steven Andele, an Executive Entrepreneur at Solar World.

Interestingly, the sale of off-solar products has witnessed a surge in the last decade as conversation about renewable energy takes centre stage. Today, solar energy potential in Africa is still untapped and represents a unique opportunity to provide affordable, reliable, and sustainable electricity services.

According to the United Nations Environment Programme’s (UNEP) Renewables 2022 global status report, in 2021, off-solar sales totalled 7.4 million units in Africa.

The off-solar sector has proliferated over the past decade and is now a $1.75 billion annual market serving 420 million users, with further growth predicted, according to the World Bank’s 2020 edition of the Off Grid Solar Market Trends Report.

“In a business-as-usual scenario, the off-solar sector will serve 388 million people with the most basic level of electricity access by 2030, but this growth will be insufficient to achieve universal access targets. To sustain the business-as-usual scenario over the next financial years, the sector needs $1.7 billion – $2.2 billion in external investments from 2020 to 2024,” The World Bank Global Off Grid Lighting Association (GOGLA) report states.

In East Africa, as indeed most parts of Africa, the growth of the off-grid energy sector has been one of the social and economic success stories, transforming lives overnight by bringing power to low-income households and small businesses, often in remote areas with little prospect of a link to the national grid.

“Solar energy is the cleanest and most abundant renewable energy source available, and with nearly 12 hours of sunlight every day, Africa has some of the richest solar resources in the world,” says Robert Omwando, Founder and CEO of Go Solar System, one of the leading and oldest solar products providers in East Africa.

“Solar technologies can harness this energy for a variety of uses, including generating electricity, providing light or a comfortable interior environment, and heating water for domestic, commercial, or industrial use.”

Pay-As-You-Go

A notable innovation in the industry has been the introduction of a Pay-As-You-Go business model. “The innovative Pay-As-You-Go business models jointly address the challenges of energy access and financial inclusion enabling rural and low-income populations to access modern, clean energy solutions,” says Tony Watima, a Nairobi-based Economist.

In the past decade, solar solution providers including M-Kopa and Engie-Africa, have combined existing technology such as photovoltaic panels, energy-efficient LED lamps, mobile money, and GSM data transfer protocols in new efficient and affordable Solar Home Systems.

“These systems provide light, mobile charging, a radio, and sometimes TV. The units can be used to run a mobile charging business or provide enough power for a small business on the roadside, increasing opening hours and improving security. Using mobile money, low-income customers can “pay-as they-go”, sending small amounts every day, paying only for what they use that day,” Associate Director, International Development Advisory Services (IDAS) Jesper Hornberg, wrote in the 2014 KPMG Impact Paper.

Similar innovations have been adopted in other East African nations. In Uganda, the Uganda Solar Energy Association attributes the growth in the number of off-grid households with access to clean energy to three factors: advancements in solar technology such as the plug- and-play solar home systems (SHS), innovative business models such as the PAYGO credit systems and tax exemptions on some renewable energy products like solar panels, solar batteries, and controllers.

“These factors have not only made solar products affordable but also accessible to those Ugandans in remote locations deprived of basic amenities such as access to electricity and consequently information,” says Joyce Nkuyahaga CEO, of Uganda Solar Energy Association.

Next frontier for energy growth

Solar energy has been touted in Kenya as the next frontier for renewable energy. The government has consequently removed import duty and zero-rated value-added tax (VAT) for renewable energy equipment and accessories.

“More Kenyans are now turning to solar power every year rather than make connections to the country’s electric grid. This is due to several challenges that one faces when connecting to the national grid, the first and foremost being costs of such a setup and the high cost of buying power from Kenya Power,” says Penninah Munyaka, an Associate Partner at Rödl & Partner.

We have seen more and more factories install solar panels on their rooftops to counter the cost of buying power from the grid and mitigating the grid’s instability since power outages are a regular feature of the Kenyan industrial and residential landscape. We have also seen an appetite diesel-powered generator that causes disturbances in Kenya’s game parks, a solar-powered plant would be the exact opposite and not affect the lodge’s operations.

While Africa’s energy sector is vital to the continent’s economic prospects, it has not been able to achieve the reliable domestic energy supply that its people and businesses require. Energy demand in Africa has been increasing at an annual rate of around 3%, the highest among all continents, but energy supply continues to lag significant.

In 2020, with the debate on the future of the national electricity grid versus off-solar energy heating up in Kenya, Total Kenya boldly announced that they would opt out of the main power grid.

“Total remains committed to the global ambition to be CO2 emissions Net Zero by 2050. This is a step in the direction of a broad energy major. And the solarization of our network of stations is part of our contribution to this great objective,” Total Kenya tweeted.

Total Kenya has since installed solar panels in 107 of its service stations across the country in a significant shift towards solar energy. The move by Total Kenya and other companies is a confirmation that some of Kenya Power’s industrial customers are progressively shifting to own-generated solar power despite the high installation and maintenance costs of solar systems in the region.

The cost of installing solar

The high upfront cost of solar equipment has made competing against other power sources difficult.

“Investing in solar energy may have a lot of benefit and save lots of money in the long term, but most households simply not affecting the high initial capital of setting up a solar system. The introduction of innovative models such as Pay-To- Go makes all the difference,” Mr. Watima added.

However, all of this is changing. Over the last decade, a lot of progress has been made in solar technology – making it cheaper, more reliable, and more efficient. As a result, solar power equipment prices have been falling, and are now within reach of many families.