Small-Scale solar power is going to profoundly change the lives of millions, especially in Africa. In Rwanda, one of Africa’s most densely-populated countries, it can cost as much as $2,000 to connect a house to the grid. After an 80% fall in the cost of solar panels over the last six years, innovations in financing, and the development of electronic devices that use less juice (think LED bulbs), an off-grid solar setup that has immense use in Rwanda can be had for a tenth of the cost of connecting to the grid. In a country where fewer than one in ten homes have access to electricity, the potential is huge.
The Economist has more of the details. You can read the article in its entirety here. It is well worth the time.
In short, poor people in a continent in which two of every three people have no access to power may soon be able to do many of the things that their counterparts in rich countries can do, other, perhaps, than running energy-hogging appliances such as tumble dryers and dishwashers. And they will be able do so at a fraction of the cost of traditional sources of energy while also acting as a testing ground for technologies that may even make their way back from poor countries to rich ones.
Off-grid solar is spreading at an electrifying pace. An industry that barely existed a few years ago is now thought to be providing power to perhaps 600,000 households in Africa. The pace of growth is accelerating in a continent that, more than any other, is rich in sunshine (see map). Industry executives reckon that over the next year the number of home-power systems on African roofs will grow by 60-100%. M-Kopa, the market leader, has installed 400,000 systems and, at its current rate of growth, may add another 200,000 to that number over the next year. Smaller rivals such as Off Grid Electric, Bboxx and Azuri Technologies may well double their client base over the same period.
This fast pace of growth suggests that, if sustained, off-grid connections will within a few years outstrip the rate at which people are being connected to the grid, leapfrogging power lines in much the same way that mobile phones bypassed fixed-line telephone networks. This promises not just to improve millions of lives but to help deal with a chronic shortage of power that, the World Bank reckons, trims about two percentage points from Africa’s annual economic growth.
Off-grid solar power is gathering steam in Africa, what’s next?
Jeremy Jones, CFA
Latest posts by Jeremy Jones, CFA (see all)
- Is the Fed the Biggest Risk to the Economy? - December 14, 2017
- Household Net Worth Hits a Record High: Is that a Good Thing? - December 13, 2017
- Is the GOP Tax Plan as bad as You’ve Heard? - December 12, 2017