Global Off-Grid Solar Sales Have Exceeded $3.9 Billion Since 2010
Report finds that sales of off-grid solar units will reach 70 million and generate $8 billion in revenue by 2022 with India being the largest potential market
Off-grid solar solutions have benefitted approximately 360 million people across the globe, according to a new report by the World Bank Group’s Lighting Global Program, Dalberg Advisors, and the Global Off-Grid Lighting Association (GOGLA).
The biennial report on the global off-grid solar industry also found that approximately 130 million off-grid solar products have been sold globally since 2010 in more than 100 countries. The products sold range from small portable lanterns to 100-plus Watt solar home systems capable of powering household appliances like fans and televisions.
“These devices often provide critical first-time access to lighting and other energy services to the 2.2 billion people who lack grid connection or reliable electricity,” the report said.
Considering the trends and developments in the global off-grid solar market, the report predicts that in 2022, annual off-grid solar sales will rise to 70 million units and generate $8 billion in annual revenue.
In tandem with the growing consumer base for off-grid solar, the number of suppliers of off-grid solar products has also seen an exponential rise across the globe. While there were only 60 dedicated suppliers in 2010, the report says that today there are more than 330 suppliers with increasing specialization along the value chain.
According to the report, total sales amounted to over 30 million devices in 2016, generating an estimated $1 billion in revenue. The report also noted that while the growth in sales of small devices is gradually stabilizing, sales of large devices rose 85 percent between 2014 and 2016 driven largely by Pay-As-You-Go (PAYGO) sales. PAYGO financing is bringing solar products within reach of more consumers and has the potential to revolutionize consumer financing in emerging markets across a much wider spectrum of products.
“The numbers in the report reflect a dynamic young industry that is altering the economic landscape of developing countries while delivering unprecedented development impact,” Russell Sturm, Global Head of Energy Access at the International Finance Corporation said in the report. “However, the real story of the sector lies in the transformative power of innovation as revolutionary new business models and disruptive technologies continue to emerge across the market. This report provides a compelling view under the hood of that dynamic machine and casts a light on what may lie around the corner,” Sturm added.
The report also noted that investments in the global off-grid solar sector doubled between 2012 and 2016. Companies raised approximately $922 million in financing between 2012 and 2017. The nature of funding has also become more commercial in the past few years, with the majority of financing done through equity deals. “Moving forward, an injection of capital will no longer be a substitute for a long-term, sound business model,” the report said.
The report credited government support of the off-grid solar market for playing a role in the expansion. Governments have recently begun to incorporate off-grid solutions into their national electrification plans and taken steps to protect consumers and develop regulations that are supportive of the private sector.
In November 2017, Mercom reported on an earlier report by GOGLA and Lighting Global which found that worldwide sales of off-grid solar products declined by 7 percent in the first six months of 2017 compared to the final six months of 2016. The report identified several market drivers that significantly influenced its findings. These included a drought in East Africa, demonetization in India, the increasing commodification of smaller product categories, and a growing amount of poor quality and copied products.
The latest report was funded by the World Bank’s Energy Sector Management Assistance Program (ESMAP) and is set to be formally launched during the 2018 Global Off-Grid Solar Forum and Expo in Hong Kong.
Image credit: Mobisol
Ankita is an editor at MercomIndia.com where she writes and edits clean energy news stories and features. With years of experience in the news business, Ankita has a nose for news and an eye for detail. Prior to Mercom, Ankita was associated with The Times of India as a copy editor for the organization’s digital news desk. She holds a Bachelor’s degree in Psychology from Delhi University and a Postgraduate Diploma in journalism. More articles from Ankita Rajeshwari.