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Off-grid solar boosts income by 50% of household GDP in Africa

Release time: 2019-10-11 17:20:49

Gogla has released a report showing the positive economic effects of deploying small-scale pay-as-you-go solar systems in off-grid regions. More than half of the survey’srespondents reported having increased economic activity, with many of those starting new businesses or significantly increasing their household income.

The data shows that 58% of the households, which had recently installed an off-grid solar system, worked more or developed their enterprises, due to the availability of electricity.

At a UN High-Level Forum on Sustainable Development Goals, global off-grid solar association, Gogla, released a new report evaluating the economic impacts of off-grid solar systems in East-Africa. The report, sourcing data from 2,300 households, indicates that the deployment of solar systems in the region has had a significant impact on the respondents’ lives.

The data shows that 58% of the households, which had recently installed an off-grid solar system, worked more or developed their enterprises, due to the availability of electricity. Additionally, 36% of the households reportedly ramped up their average income by an additional US$35 per month. In the region in question, this is equivalent to 50% of the average monthly GDP of a household.

Furthermore, because of electric lighting, the respondents reported that they could spend 44% more time at work or on chores. Previously, nightfall had prematurely interrupted these activities. This improvement generates income for the households and increases the economic activity of business owners, the report says.

With the possibilities of using technologies like smartphones more, 11% of the respondents reported that they had started a new business following electrification from off-grid solar systems. In 7% of the households, at least one member of the household reported having received a new job as a result of the solar energy deployment.

The report surveyed 2,300 people from Kenya, Mozambique, Rwanda, Tanzania, and Uganda. A range of companies delivered small-scale pay-as-you-go solar systems, which comprised a solar panel, battery, LED lighting and potentially other devices, depending on customer needs.

Breaking down barriers

Koen Peters, Executive Director of Gogla said, “Gogla’s new report shows that the net economic and social benefits off-grid solar are a huge opportunity for national governments of the developing world. Governments tell us they are interested in jobs and economic impact. As this report shows, off-grid solar is directly delivering such impacts and significantly. We call on policymakers, treasury, and energy departments to work together with off-grid companies, banks, and institutions to break down barriers to off-grid solar and build a pathway to accelerate energy access.”

The association highlights that there are 1.1 billion people without access to electricity in the world, and that most of them are in either Africa or Asia. Rural areas with low economic activities are affected most by this.

In countries with generally low economic activity, grid infrastructure expansions are severely costly and are said to have adverse effects on energy pricing for end-consumers. With the lack of electrcity supply, lucraticve economic activity is, however, hard to kickstart. To address this, cheap off-grid solar systems have been deployed by a number of players, since 2010.

Transformation

Gogla underlines that the report was released with regards to the UN’s High-Level Political Forum in New York, currently taking place. The conference, named “Transformation towards sustainable and resilient societies”, aims to find ways to meet Sustainable Development Goals, like, for example, ‘Ensuring access to affordable, reliable, sustainable and modern energy for all by 2030.’

The UK Department for International Development (DfID) funded the report, which was managed by Gogla. The data collection and analysis, meanwhile, was carried out by Altai Consulting and Sagaci Reserach. The researchers surveyed customers who purchased a solar home system with a capacity between 8 Wp and 200 Wp.