Africa’s off-grid solar sector in recovery mode post Covid

By The Inspirer writer 

Africa’s off-grid solar industry is on the road to recovery after suffering a slump during the Covid pandemic according to the latest Off-Grid Solar Market Trends Report 2022: State of The Sector report published by the World Bank’s Lighting Global, the International Finance Corporation (IFC), GOGLA, Efficiency for Access Coalition, and Open Capital Advisors.

By the end of 2020, the global off-grid sector had developed into a $1.75bn annual market, serving 420m users, mainly in sub-Saharan Africa, according to the World Bank’s Lighting Global Programme. That was reflected in 30% annual revenue increases for off-grid solar firms in 2017-19.

But the pandemic put an end to those sort of growth rates in many parts of Africa, even if the market is still expanding faster in some countries than others.

Overall growth in sales volumes for appliances and services powered by built-in or household solar panels – such as solar lanterns, multi-light systems, batteries for phone charging and solar home systems – have faltered.

Spending cuts due to the strain on incomes, movement restrictions for suppliers and supply chain problems caused by the pandemic are holding it back. Further disruption to global trade due to the impact of the war in Ukraine has only added to these problems.

In East Africa, a hotspot for home solar products, sales of off-grid lighting products reached almost 2.1m units in the July-December 2021 period. That represented a 4% increase compared to the first half of 2021, but a 15% decrease compared to the second half of 2019, according to GOGLA, a global association for the off-grid solar energy industry.

However there were large disparities between countries, with traditional market leaders Kenya and Ethiopia suffering further sales slumps, while Uganda, Zambia, Rwanda, Malawi and others reported strong growth.

According to the global association for the off-grid solar industry (GOGLA), there was a 23% increase in unit sales in West Africa between July-December 2021 compared to the first half of 2021 and a 60% increase compared to the second half of 2019. Again, this positive looking picture hides national disparities, with strong growth in Nigeria, which represented two-thirds of sales in West Africa, outweighing poorer sales in the region’s smaller economies.

This data mostly reflects sales of direct purchases of equipment such as solar lanterns or panels by consumers rather than via so-called pay-as-you-go (PAYG) solar services, which have continued to grow, but comprise a small part of the overall market.

The sector’s recovery is expected to be a major talking point during the 7^th edition of the Global Off-grid solar Forum and EXPO organized by GOGLA,  the World Bank’s Lighting Global program and hosted by the Government of Rwanda through the Ministry of Infrastructure from October 18 – 20 at the Kigali Convention Center.