While the western world debates what role distributed energy might play in its power networks of the future, many developing nations – out of sheer necessity – are just getting on with it, aided by some of the smarter developed nations, who recognise a huge growth market when they see one.
Tanzania’s One Million Solar Homes, which will be delivered by local company Off Grid Electric, is expected to provide solar electricity for 10 per cent of the nation’s population, as well as generate more than 15,000 solar industry jobs.
The initiative will leverage development finance and private capital to bring more than $100 million in investment into Tanzania, while Off Grid Electric – known in Tanzania as M-Power – will leverage the leasing model of major US equity investor, SolarCity, with monthly payments starting at $0.20 a day.
The plan is part of the broader Power Africa initiative, announced by US President Barack Obama in 2013, that aims to double the number of people with access to electricity in sub-Saharan countries like Tanzania, where around 86 per cent of the population depend on kerosene and candles for light.
“We know Tanzanians will flourish with access to clean and reliable light and electricity access,” said Tanzanian President Jakaya Kikwete. “In partnership with Off Grid Electric, our country can lead the way toward universal energy access by 2030.”
It’s a smart business solution to a huge social, environmental and economic problem, as the infographic below illustrates – only in this case, using India as the test case.
Taken from a study published by the Climate Group and Goldman Sachs, the chart reveals huge opportunity for off-grid renewable energy solutions, in particular solar home systems and distributed renewables systems, that exist in countries like India, which have enormous unmet demand for electricity.
As summarised in the infographic, the report identifies the business models with the greatest potential for scale-up, in order to help boost entrepreneurial activity and increase private sector investment in the renewable off-grid energy sector.
Among other things, the report finds that in India, alone, 7.2 million under-electrified houses will be able to afford a solar system by 2018.
It also estimates that the distributed energy market in India will be worth a massive $150 million by 2018.