NAIROBI (Thomson Reuters Foundation) - Fuel-seller Nancy Kaisa has for years used solar power to light her premises at the Entasopia shopping center in Kajiado, in southern Kenya. But recently she’s started using energy from a solar mini-grid system to operate her fuel pumps and meet her other energy needs, ditching her diesel generator.
“I now serve more customers a day than before because (the pump) dispenses fuel faster than it used to before, when it was hand-operated,” Kaisa said.
In Kenya, one of the countries leading Africa’s push toward solar energy use, experimentation with solar lighting is fast expanding into broader use of renewable power for business, energy experts say.
A survey of just under 200 users of pioneering rural solar mini-grid systems found that at least 10 percent who bought basic solar lighting and electricity now wanted to move up the “energy ladder” and begin using clean energy to make their businesses or farms more profitable, according to the mini-grid company and a philanthropic investment group.
In particular, people already using and familiar with solar energy products such as solar lanterns and solar panel home systems were most eager to try to expand their businesses using mini-grid clean energy – and were already familiar with systems to pay for it, such as moving money via their mobile phones, said Courtney Blodgett, a program officer for Seattle-based Vulcan Impact Investing.
“The consumers tend to be more familiar and therefore comfortable with mobile money or pay-as-you-go systems, since many solar products are sold or leased using the system across Africa,” Blodgett told the Thomson Reuters Foundation.
The mobile phone connection also offers quick problem solving, the survey noted.
“If the power goes out due to lack of payment, with a quick tap on their cell phones our customers can make instantaneous micro-payments to turn the lights back on,” the authors noted.
The study by Vulcan Impact Investing and mini-grid operator Steama.co was conducted in Kenya, where the companies in 2015-2016 operated 10 solar mini-grids serving more than a thousand people.
It paints an optimistic picture that such systems could help bring renewable energy to more than 600 million people without access to Africa’s existing power grids.
“At the current rate of connecting new homes to the national electricity grid, it will take more than 60 years for every African to have access to affordable, reliable, sustainable and modern energy,” the report said, quoting a 2015 Africa Progress Panel report.
“Privately operated renewable energy mini-grids, on the other hand, can be installed and be operational in a matter of weeks,” Blodgett said, calling such systems “much more nimble”.
The survey, published this month, found that nearly all of those connected to mini-grids – which distribute solar power from a common panel system, usually in rural areas not connected to the national power grid – stopped using kerosene or batteries as their normal source of power.
“Prior to the installation of our grids, 86 percent of our customers used unsafe and unhealthy kerosene, disposable batteries or diesel generators to meet their energy needs. Post grid installation, only 4 percent of customers are still using any of these fossil fuels,” the report noted.
The survey found that those buying solar energy paid an average of $5.34 a month for it, with some heavy users paying as much as $72.70.
It said early evidence suggests solar grids can be profitable in Africa as long as the sites are carefully selected, the grids are well designed and the right mix of customers are lined up.
That is particularly true as the cost of solar panels, batteries and other components fall, the authors said.
Access to electricity is also increasing demand for more of it, the study found.
“Our customers tell us that they would buy more electricity if they could afford more appliances - but they often struggle to afford these refrigerators, TVs, welding machines,” the authors noted. To help, the companies are now looking at offering rent-to-own or lease plans for such tools and appliances, they said.
To scale up the use of renewable mini-grid systems, more work needs to be done to understand consumer behavior and to improve things like energy storage and access to efficient appliances, Blodgett said.
According to energy access campaign group Power For All, ensuring grids are financially sustainable will be key to scaling them up, as will making sure that national energy policy frameworks shift from a focus on expanding power grids to a broader effort to provide energy services from a wider range of sources.
“Part of moving mini-grids into the mainstream is shifting our thinking from grids to utilities. What we’re seeing from Vulcan and Steama.co is not just infrastructure, it’s the emergence of a new energy services delivery model for remote communities,” said William Brent, a spokesman for Power for All.
Steama.co in 2015 won a business innovation award for its solar-powered mini-grid systems in Kenya from UK-based charity Ashden, which works to accelerate the global transition to clean energy.
A report this year by the International Renewable Energy Agency predicted that innovation, new business models and new finance will result in a 60 percent decrease in the cost of producing electricity from renewable grids in the next 20 years.
It said solar home electricity systems in Africa were now providing lighting for as little as $56 a year, a cost lower than lighting homes with diesel or kerosene.