Electrification rates are the lowest in Sub-Sahara Africa (SSA), but rural access rates remain surprisingly low even in countries with high GDP and impressive overall access rates. Modern energy services, lighting included, are fundamental to all three pillars of sustainable development, i.e. economic, social and environmental development. Making energy services affordable and accessible for consumers at the bottom of the income pyramid, therefore, offers enormous potential to contributing to inclusive and sustainable development paths for developing countries.

Every fourth human being is without access to electricity today. Electrification rates are the lowest in Sub-Sahara Africa (SSA), but rural access rates remain surprisingly low even in countries with high GDP and impressive overall access rates. The fact that rural access rates are lagging behind across all countries and regions reflects the fact that costs of traditional grid electrification grow exponentially with falling population rates (and load) density.

At the same time, access to modern energy for cooking, lighting and ICT is a social, political and economic priority to households and policy makers because of its direct socioeconomic and environmental benefits, as well as the indirect benefits of energy as an important input factor to growth and the Millennium Development Goals (MDGs). In spite of the growing recognition of this fact, progress remains slow as governments and the private sector lack funds for the substantial investments needed for electrification, and household budgets are often too small to pay full cost recovering connection fees and/or tariffs. Wherever clusters of users without service can be reached by grid extension or “densification” it is clearly the most cost efficient - and usually the fastest - way to increase access rates, especially in countries with well functioning public or private utilities. Grid electrification is perceived by the vast majority of households as the “gold standard” of electrification, partly due to rational arguments (the price per kWh is low; typically users are allowed to draw unlimited amounts of energy; alternatives may have shorter service guarantees) and partly to psychological effects (connotations of social status, inclusion and an urban, modern lifestyle).

Nevertheless, in reality rural grid users often continue to use surprisingly low electricity amounts on the long haul (average values below one kWh per day are frequent in rural areas in least developed countries (LDC)!), as they typically use it exclusively to power 2-5 lights, TV, radio and sometimes a cell phone.

For these “typical rural households”, the electricity amounts generated by small, decentralized alternatives to grid power would therefore often suffice. In addition, off-grid electrification is the least cost option today for most unconnected LDC users who live more than 5 km away from a small town or an existing LV grid. The exact market size has not been quantified to date, though. Diesel generators are the most widely spread off-grid technology in use today, and will remain the source of choice for micro-enterprises that need AC power for their production processes (such as grinders or soldering machines). However, increasing fuel prices and environmental concerns make renewable energy powered alternatives increasingly attractive. Wherever sufficient hydro or wind potential with adequate load curves (or sustainable biomass stock) is available close enough to populated areas, much lower specific energy costs can be achieved than with solar systems under the current market prices, in spite of the considerable engineering and operations and maintenance (O&M) efforts involved with both.

What to do, then, with more than 1 billion poor people who will remain without electricity for another twenty years even under optimistic scenarios?!

Pico PV systems may well be part of a solution, by allowing “pre-electrification”. There are several good reasons to be bullish regarding the potential of this emerging off-grid market segment:
  • Pico PV prices are coming down fast.
  • Pico PV systems are over-the-counter consumer products and don’t need specific know-how for installation or O&M. Therefore, distribution has lower transaction costs than for all other grid or off-grid alternatives.
  • The welfare gain from electrification at household level is arguably largest after stepping from flame-based lighting to efficient electric lights.
  • Consumers do not fear that PicoPV lamps will bar them from future grid roll-out, as they often do in the case of SHSs.

Pico PV systems may well be part of a solution, by allowing “pre-electrification”.

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