GLOBAL – The off-grid solar industry has grown into a US$1.75 billion annual market, providing lighting and other energy services to 420 million users, a new World Bank Group and GOGLA report has revealed.
The 2020 Off-Grid Solar Market Trends report finds that the industry has made tremendous strides in the past decade and remains on a solid growth curve.
According to the report, revenues from the off-grid solar industry continue to grow rapidly since 2017, increasing by 30 percent annually.
To date, more than 180 million off-grid solar units have been sold worldwide and the sector saw US$1.5 billion in investments since 2012.
The report also observed that, “with 840 million people still lacking access to electricity, the growth of the off-grid solar industry is critical to meeting the Sustainable Development Goal (SDG7) for universal access to affordable, reliable, sustainable and modern energy by 2030.”
“The off-grid solar industry is instrumental for achieving universal electricity access,” said Riccardo Puliti, Global Director, Energy and Extractive Industries and Regional Director, Infrastructure, Africa, at the World Bank.
“We are scaling up our support to client countries by helping them leverage this potential through innovative and financially sustainable solutions,” he added.
According to the report, the sector would need an additional boost of up to US$11 billion in financing.
More specifically, the sector would need to grow at an accelerated rate of 13 percent, with up to US$7.7 billion in external investment to companies and up to US$3.4 billion of public funding to bridge the affordability gap.
“Only by crowding in commercial finance at scale can we reach the target of achieving universal access by 2030,” said Paulo de Bolle, Sr Director, Global Financial Institutions Group for IFC.
“We are eager to work with our local bank partners in the more mature off-grid markets where commercial debt can drive the next stage of market growth.”
The report indicated that trends demonstrate that companies are moving into new geographies and underserved markets as established markets become more saturated.
These companies are also shifting towards larger, higher-margin solar home system sales in response to growing consumer demand for appliances and back-up systems, according to the Report.