The second part of the “Off-Grid Solar Market Trends Report 2022”, released on October 19 during the Global Off-Grid Solar Forum and Expo in Rwanda, projected that 624 million people will be electrified by off-grid solar solutions. network by 2030.
The report is the result of a collaboration between the World Bank’s Lighting Global, the International Finance Corporation (IFC), the Global Off-Grid Lighting Association (Gogla), the Efficiency for Access Coalition and Open Capital Advisors.
In addition to people gaining access to modern electricity for the first time, millions of households in low-grid areas are also set to benefit from off-grid solutions and productive use technologies.
Under this scenario, the off-grid solar sector is expected to grow by 5% per year and receive $7.8 billion in investment. However, the projected access scenario depends on continued industry support through interventions such as positive fiscal policy, subsidies and aid.
Depending on how a range of factors evolve, the industry could grow faster, at 7.2% per year, or slower, at 2.8% per year.
Despite significant electrification gains from off-grid solar in the projected access scenario, without “game changers”, universal access will not be achieved, with an estimated 526 million people unelectrified by 2030 in the projected access scenario, the majority of which are located in nascent and emerging markets.
Universal access is a central pillar of the seventh UN Sustainable Development Goal (SDG7).
“It is essential that we act to accelerate access to off-grid solar power – especially in hard-to-serve markets where it is most needed, so that the most vulnerable people on the planet can protect themselves against current and future shocks,” said the World Bank’s energy sector. management assistance program manager Gabriela Elizondo Azuela said.
Without game changers, the planned investment is also $15.5 billion less than the amount needed to meet the SDG7 electrification targets. Of the total investment required to achieve SDG7, $4.5 billion is needed to subsidize access for poor and vulnerable households.
Even greater investments are needed to reach the 569 million and 192 million smallholder farmers who could benefit from off-grid cold storage and solar water pumps, respectively, in India and sub-Saharan Africa by 2030.
The report showed that off-grid solutions will be key to supporting education and healthcare by providing cost-effective electrification for schools and health centers, and helping to provide cold storage for essential healthcare supplies such than vaccines.
“IFC works to mobilize investment resources and help local financial institutions provide the local currency debt needed by the sector, while piloting and helping to develop new financial instruments that will attract traditional investors into the area.
“We need to unlock these game-changing financial models to bridge the projected $15.5 billion financing gap and enable the commercial market to accelerate the pace of access and meet the SDG7 electrification goals,” said the financial institutions group’s global head of climate finance. Pierre Cashion.
Game changers such as greater availability of pay-as-you-go consumer finance, strategic investor engagement, diversified business models, and increased grant and concessional financing are needed to ensure that off-grid solar companies can accelerate the pace of electrification and help achieve SDG7 targets.
“The sector has remained resilient, thanks to record capital inflows of $457 million in 2021, but that still means we risk missing out on SDG7 by 516 million people if we don’t act decisively and urgently. .
“This year’s Market Trends Outlook Report recommends a number of game changers that require a combination of innovation, funding and policy change. We need to act now and act collectively, recognizing the critical link between energy access and climate change mitigation and the importance of public-private collaboration,” co-founder of investment consultancy Open Capital Advisors Andreas Zeller.
Gogla Regional Policy and Strategy Manager Patrick Tonui added that the off-grid solar market trends report shows that, on the current trajectory, the most vulnerable people will be left behind.
“Yet it also lays out the game-changers needed to adjust our course and achieve universal electrification goals by 2030. We must work together to get there and achieve a clean and fairer energy transition for all,” said he declared.