Drawing from the best available data and refined analytical techniques, this section outlines the game changers that could catalyze significant growth in this sector over the next decade.
Enhanced integration of decentralized systems with the national grid
Future efforts will focus on integrating solar appliances with grid infrastructure to enhance reliability and reduce dependency on fossil fuels. Hybrid solutions that combine solar appliances with grid extension efforts will provide a more reliable and resilient energy supply.
Supportive policies and incentives for integrating solar solutions with the grid will be essential for this transition. The World Bank’s Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) program exemplifies this approach. Launched at the end of 2023, ASCENT aims to accelerate access to electricity for 100 million people in Eastern and Southern Africa by leveraging a $5 billion USD International Development Association (IDA) envelope and mobilizing an additional $10 billion USD from various partners. The program supports the integration of decentralized energy systems with national grids, promoting hybrid solutions to improve energy reliability and resilience. Additionally, ASCENT aligns with sectors such as digital, agriculture, health, and education to drive synergies in financing and impacts.
Improved performance, quality, and efficiency of key product components, particulary brushless DC (BLDC) motors
Brushless DC (BLDC) motors present significant opportunities to transform the agriculture sector in sub-Saharan Africa and South Asia by improving the performance, quality, and efficiency of solar-powered agricultural appliances. BLDC motors convert power into mechanical output more efficiently, making them particularly useful in applications like mills, irrigation systems, threshers, shellers, grinders, and other postharvest processing equipment. For instance, Agsol’s solar-powered MicroMill uses a custom BLDC motor that is over 2.5 times more efficient than conventional electric mills, allowing it to operate with smaller solar panels and batteries, thus lowering costs in off-grid areas.
In solar irrigation, BLDC motors significantly reduce the energy demand of solar pumps, which are the largest energy consumers in such systems. The use of these high-efficiency motors can decrease the size and cost of required solar panels, making solar irrigation more affordable and practical, despite the slightly higher initial cost of the motors.
Ripple effect of e-mobility
The increasing adoption of electric mobility (e-mobility) will significantly influence the growth of the off-grid solar appliance market. As e-mobility becomes more widespread, it will create new opportunities for innovation in the market.
- The growing need for energy storage to support electric vehicles will boost the availability of rechargeable batteries. This will facilitate greater use of second-life rechargeable batteries for stationary applications in off-grid solar systems.
- E-mobility will create new business opportunities for off-grid solar appliances. For instance, vehiclebased cooling storage, as well as service-based irrigation systems powered by e-bikes that transport solar pumps from farm to farm, will become more prevalent.
- E-mobility will create new opportunities for improving energy efficiency in off-grid solar appliances. For instance, the use of advanced battery management systems (BMS) will enable more efficient energy storage by reducing energy losses.
Deployment of artificial intelligene (AI) and bid data
AI and big data are poised to significantly influence the growth of the off-grid solar appliance market in several key ways:
Demand forecasting and responsiveness
AI and predictive analytics help off-grid solar companies better understand and respond to customer demand. By analyzing data on energy consumption patterns, demographics, weather patterns, and market trends, AI models can identify optimal regions for expansion and target specific customer segments with tailored products and services. This data-driven approach enables companies to make more informed decisions and allocate resources more efficiently.
For example, Engie Energy Access utilized Atlas AI’s Aperture platform to boost its monthly sales by 48% in a 2022 pilot program in Kenya. Recognizing the need to prioritize customer qualification and acquisition to expand its business, Engie leveraged the platform’s robust data capabilities to strategically identify and monitor local communities in Kenya, pinpointing areas where it could concentrate growth efforts effectively.
Financing
AI and big data significantly enhance financing opportunities within the off-grid solar appliance market. AI-powered digital verification models streamline the process of connecting end users with financiers, ensuring authenticity and direct benefits from financial mechanisms like carbon credits.
A notable example is Nithio, operating in Kenya and Nigeria, which utilizes AI and blended finance to provide a sustainable, risk-informed approach to financing off-grid solar solutions. Nithio’s AI system assesses customer creditworthiness to tailor the type of capital offered, providing commercial capital for low-risk customers and grants or results-based financing for higher-risk groups, such as low-income families and residents of informal settlements.
Preventive maintenance and after-sales services
AI and Internet of Things (IoT) technologies support preventative maintenance and improve after-sales services for off-grid solar appliances. By continuously monitoring appliance performance and analyzing data on usage patterns and component health, AI models can predict potential issues and trigger preventative maintenance actions. This proactive approach reduces downtime, extends appliance lifespans, and improves customer satisfaction. Innovators like SunCulture and EcoZen are already integrating these features into their products.
Consumer awareness and education
AI models integrated with off-grid solar appliances promote consumer awareness and education. For example, AI-powered virtual assistants can help smallholder farmers maximize the benefits of their solar appliances by providing interactive tutorials, troubleshooting guides, and real-time feedback on appliance performance.
Intelligent load management
As the grid becomes more integrated and the demand for energy storage increases, AI algorithms can optimize the use of limited energy resources. AI can allocate power to different appliances and devices, optimizing energy distribution and minimizing waste. For instance, a cold storage facility using AI can reduce energy consumption by 15% by optimizing refrigeration settings and adjusting energy usage during peak hours. On a household level, AI can help off-grid users optimize energy consumption and usage of devices like smart home systems.
However, the cost-effectiveness of integrating AI must be carefully evaluated against the price of the appliance itself. While AI solutions can offer substantial savings for larger or communal appliances, their cost might not justify their use for smaller household devices for price-sensitive user groups.
Local Manufacturing and assembly
Local manufacturing and assembly of off-grid solar appliances can play a crucial role in reducing costs, creating jobs, and mitigating supply chain shocks. Countries like India and Nigeria have demonstrated the benefits of local production for specific appliances, including reduced reliance on imports and increased local capacity.
Local assembly allows for customization of products to meet specific market needs. In Nigeria, the government’s Economic Sustainability Plan 2020 includes a solar strategy that incorporates local assembly in three phases: proof-of-concept, scale-up with incentives, and maturity, with the maturity phase focused on sustaining assembly and expanding to manufacturing. This approach allows for adaptation and optimization of products for the Nigerian market.
Local manufacturing can also create jobs and build technical skills. Governments can leverage this ability by developing targeted policies that incentivize investment in local production and create employment opportunities. For instance, in Rwanda, a policy assuring off-take of locally assembled products at market prices has attracted foreign direct investment into a solar product and LED light assembly company.
Realizing the benefits of local manufacturing and assembly will require overcoming challenges including:
- a lack of quality standards for assembled products
- country macroeconomics that make it difficult to compete with established production in China
- taxes on components needed for assembly
- inconsistent implementation of incentives
- uncertainty in off-take demand. Supportive policies, quality standards, and resultsbased financing for locally assembled products are key to surmounting these barriers.
Excerpt of: Leave No One Behind: Bridging the Energy Access Gap with Innovative Off-Grid Solar Solutions (Efficiency for Access Coalition, 2024)