Connecting Africa

The consolidation of solar energy as an alternative source

The lack of electricity is a key factor in Africa's social and economic underdevelopment. Production costs are higher in African countries than in other parts of the world, thus affecting their competitiveness in global markets. As a result, the region is the epicentre of the global energy crisis.

En África, unas 600 millones de personas viven sin electricidad, casi dos terceras partes de la población

There is, however, one resource that Africa has in abundance: sunshine. Most of the sunniest places on the planet are found there and the average solar radiation levels in African countries are higher than in other continents.

This places solar energy at the centre of the debate, because it is a viable way to bring energy to almost any place without having to invest in big infrastructure.

An investigation began 10 years ago to take a serious look at the possibility of developing home solar energy systems. The Lighting Africa programme, sponsored by the International Finance Corporation (IFC) and the World Bank, began to encourage financial institutions to boost the use of solar energy by rural consumers.

In 2006, the price of a home solar energy system was about $500, an affordable solution for certain segments of the population, but still out of reach for those at the bottom of the ladder.

After the arrival of the first companies dedicated to the design and importation of solar energy systems, a search began for real solutions. First, battery capacity was reduced so that a smaller battery could be used without a converter.

The price of equipment was reduced in this way, meaning that poorer people could afford it. "We facilitate business between the market and manufacturers," explains Itotia Njagi, programme manager for Lighting Africa, an organisation that also works together with the governments of countries such as Senegal, Mali, Burkina Faso, Cameroon, Rwanda and Uganda.

Five years ago the price of one watt was $2, now with a quality panel it costs less than one

Itotia Njagi, manager of Lighting Africa

While lower prices and greater efficiency has played a key role, the main consolidator of solar energy access in economic terms has been the introduction of an innovative business model. Pay-as-you-go technology, based on prepaid top ups using a mobile money service, has provided a solution for microloan payments.

Pay-As-You-Go is a cheap, efficient and financeable service. But to ensure accessibility one thing is needed: simplicity. The Plug-and-play concept when using a product is based on simplicity as it doesn't need any configuration or a technician to install it.

"I am an older person and it is hard for me to work without electricity. Mobisol [a company supplying solar devices] has changed my life."

Elias Aronteti, tailor, Arusha, Tanzania

"People had to travel long distances to get a haircut before. Ever since I opened my business two years ago with solar energy, it's become a lot easier for everyone."

Frankis Nasare, barber, Arusha, Tanzania

The device is plugged in and begins to work. In the case of solar power systems, a panel goes on the roof and is connected to a battery via a cable. Lights or phones are then connected directly into the battery.

Although it might not seem that important, Njagi explains that "10 years ago there were not enough technicians to carry out these installations in Africa". Plug-and-play therefore was the last piece in the puzzle for solar energy systems to really take off in Africa.

Since 2009, the use of home solar systems has grown dramatically, with an annual sales growth of between 90 and 95 percent. Today, market penetration of solar lighting products has risen to four percent and the market is rapidly developing, thanks to the arrival of new manufacturers and suppliers.

In South Africa, the government has facilitated access to solar panels in some of the country's rural areas.

Namibia has the continent's highest levels of solar radiation.

Multinational companies like M-Kopa and Mobisol have intensified competition and are generating greater market coverage.

"I had to use kerosene lamps before. With M-Kopa I now have electric light and can charge my mobile."

Agnes Kereya, housewife, Thika, Kenia

Four percent of the population of sub-Saharan Africa use at least one solar powered energy device.

M-Kopa owes its success to the combination of several innovations. They reduced battery size from 200 watts to 30 watts, and thus brought the cost of a system down to $150, which is equivalent to a family's annual kerosene bill. In a nutshell, M-Kopa lets its customers pay in instalments for a system while it is being used. And all this is done through a simple SMS message.

Want to discover more about M-Kopa?

Once established, the system was replicated by companies such as Mobisol, based in Tanzania, another country where mobile money usage is high. According to Robert Zeidler, the company's African head, the key to success hinges on the efficiency not only of their products, but the appliances used as well. "We promote the use of devices that work with DC [direct current] so that people make the most of electricity," he says.

A solar device generates energy, but can also generate a business

Robert Zeidler, Mobisol regional manager for Africa

As well as supplying dwellings, Mobisol has launched products that generate new businesses, such as a DC hair clipper for hairdressers in areas without electricity. Mobisol's growth boils down to its knowledge of local needs.

This is exactly why solar power is more developed in East Africa than in West Africa or the centre of the continent. Until mobile money takes root in other African countries, it will be very difficult for firms like M-Kopa or Mobisol to flourish.

"My dream is to set up my own solar panel installation company."

Ainin Demetrius, student, Ondangwa, Namibia

"In Namibia we have a huge amount of solar radiation. That's why solar energy is an opportunity we need to take advantage of."

Calicious Batubaja, student, Walvis Bay, Namibia

In addition, as is the case with mobile money, the solar energy sector also needs a competitive market. And though the sector is not taxed in most East African countries, the tax rate stands at between 22 and 33 percent in West Africa.

Meanwhile, West African businesses must deal with excessive costs that push up retail prices and have difficulties collecting fees without a consolidated mobile money payment service. One example of these companies is PEG in Ghana, which replicates the technology and the business model of M-KOPA and aims to reach 20,000 households in 2015 and 100,000 in 2016.

Discover how Ghana-based home solar power system company PEG works

There is a small group of countries in southern Africa with other characteristics, due to the influence of South Africa, the economic powerhouse on the continent. Although very depopulated, countries such as Namibia or Botswana have significantly more robust economies, meaning that technological development is also governed by different rules.

In Namibia, for example, access to home solar energy systems does not depend on microloans granted by companies. "It is the state that provides loans for the purchase of solar energy systems," says Zivayi Chivugare, director of the Namibia Energy Institute.

The Namibian government has a strategy to bring solar energy to people outside of the network

Namibia has an electricity connection rate of 35 percent, close to the sub-Saharan average, but with a huge extension of territory containing only two million inhabitants. The government therefore also finances the electrification of public institutions such as schools, police stations and clinics, and installs mini-networks and power plants that supply communities from 1,000 to 2,000 people.

In this context, foundations such as Kayec or Young Africa train young people in how to install solar energy systems. These are more powerful and complex systems than those offered by companies such as M-Kopa, Mobisol or PEG Ghana, but have the same goal: supplying electricity to those without access to the network.

This is how young Namibians receive training in the installation of solar energy systems?

Solar energy is a real solution to the energy crisis in Africa. And even though the electricity network provides much more energy than what solar can generate with current technology, it could take 20 or 30 years to connect hundreds of millions of people to the grid.

"It is not about choosing a system," says Itotia Njagi. "Even if people were connected to the grid in the next two years, solar energy could reduce the gap right now." And the fact remains that despite the development seen in recent years, today, two out of three Africans will use kerosene.

Authors Angelo Attanasio / Jerónimo Giorgi

Development Àlex Poderoso

Music M-Kopa video 'African Mbira with Percussion' (Akashic Records)

Project supported by European Journalism Centre and the Innovation in Development Reporting Grant Programme.

Journalism GrantsEuropean Journalism Centre