Productive use needs a modeling approach – A2EI Productive Use Report

How this study came about

I could not tell you how many meetings I have been in where we sat around a table and brainstormed a list of agricultural machines that we thought could be solar-powered. Or conversations where someone asked me, ‘So, exactly which agricultural technologies can run on solar?’

Those conversations always left me with mixed feelings. The idea of productive-use agricultural technology is such an enticing idea for so many of us, for so many good reasons: the job creation, the value addition, the environmental impact, the strengthening of rural communities.

But often it felt like we had more questions than answers, like we only had a murky understanding of the productive-use space. The potential for impact was clear, but the potential for implementation and scaling was inconclusive.

We have seen successes over the years and solar water pumps and cold chain technologies continue to be at the forefront of productive-use off-grid technology. Although still a maturing sub-sector, the conversations around these products have shifted to be less about whether a market exists and more about how best to capture it.

For other products, there remains uncertainty. The verdict is still out on solar mills, egg incubators, and the rest of the laundry list. The success stories we hear often feel like hard won exceptions to the rule: what works for one organization, one customer, one location, does not necessarily translate into broad success. The evidence is still being gathered.

It is more about the methodology and model than about punchy conclusions

This research was motivated by a desire for conclusive answers that would lay these kinds of searching conversations to rest. My original objective was to give readers conclusive and clear direction on whether each of the technologies have potential to be scaled as a productive-use product. In this respect, I failed. The off-grid landscape is diverse and dynamic and requires nuance.

While we hesitated to draw punchy conclusions, we recognized there was value in the methodology that we used throughout the paper. By making all of our assumptions transparent, our discussions around this topic have become much richer.

And so the most important thing to come out of this paper is not the business model evaluations, but the recognition that a model is essential to any conversation on productive-use. The modeling approach shouldn’t just be one of the tools we use to look at productive-use, it should be the primary one.

Summary of findings (results only apply to Tanzania)

Ten different agriculture-related business cases in Tanzania were considered and evaluated for their potential to be successfully operated and scaled when using solar power. A business model was developed for each technology use-case to understand its profitability and barriers to adoption and scale. These findings are presented in detail in the individual sections.

A recommendation was given for each productive-use case on whether the products evaluated should be further developed and brought to market by the off-grid energy sector. Of the ten technologies evaluated:

  • 2 were considered to have low productive-use potential and be difficult to successfully scale
  • 6 were considered to have conditional productive-use potential, such that there are opportunities for them to be implemented successfully if certain criteria are met
  • 2 were considered to have high productive-use potential and have relatively low barriers to scale

One of the most important conclusions from our paper is that productive-use businesses need to be viewed outside of just a technology-focused lens.

While we generally view costs of energy, product efficiency, and CAPEX cost as barriers to the scaling of productive-use appliances, our analyses showed that other variables were just as (if not more) important in determining an appliance’s productive-use potential.

By understanding the trends of how different variables affect the outcome of a business, we help build a foundation of insights that could potentially be used as a high level evaluation tool for new productive-use opportunities.

The methodology and Excel sheets we are sharing with the sector are an invitation to use them to assess the potential of productive use in different settings/countries. Using the same vocabulary and methodology in different settings could be a powerful and systematic way to agree on a common approach to what works (and what does not) for solar powered productive use appliances.

Excerpt of: Productive use report by Access to Energy Institute (A2EI).

Download the full report here.