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Holistic approach of solar businesses: The new phase in rural electrification

Who closely follows the current developments in the field of rural electrification observes very encouraging signs that this subject has evolved from the past focus on micro solar products. Thus, this indicates the beginning of a third phase:

1st Phase: simple aid projects
Until about 2008, rural electrification generally consisted of few aid projects, carried out mostly by NGOs, sometimes also by the World Bank or GIZ. As successful as they were in a particular case, so little were they able to initiate a sustainable development. On the other hand, such a develop-ment was not even intended. It was often already enough to conclude the project in order to skip to the next one. The results are today many solar systems in Africa and Asia that were installed with much enthusiasm, but for which maintenance and service no one is responsible. These "solar cadavers" are found today in all developing countries as an example of a well-intentioned but misguided development aid.

2nd Phase: Product focus on solar flashlights
From around 2008, it follows a phase in which rural electrification is considered unilaterally from the product side: 

  • Investors are found to invest in the production of small solar flashlights. 
  • Solar projects now focus unilaterally on the replacement of kerosene lamps. 
  • Initiatives such as "Lighting Africa" support this focus on small products and contribute to the inflationary spread of such small devices.

The incontestable advantage of this development phase is above all to see that rural electrifica-tion became the focus of international conferences and it became more and more clear that the subject "Rural Electrification" was not only a topic for NGOs, but also that here a huge economic market was growing.
Unfortunately, by all the euphoria, they forgot that the distribution of small solar flashlights has nothing to do with rural development and the alleviation of energy-related poverty. Very soon it also became clear that not the development and production were the bottleneck road, but the financing of a rural network for maintenance and service.

3rd Phase: holistic  approach
Today, the awareness, that the focus shouldn’t be on one sector only, like e.g. on products, but that a holistic approach is needed if you really want to induce a sustainable improvement of the living and incomes situation of rural population, is catching on among many organizations and companies. Like previously Grameen Shakti in Bangladesh or the Stiftung Solarenergie - Solar Energy Foundation in Ethiopia, nowadays more and more companies and organizations think about how a holistic approach can be carried out. For, it is much more difficult to implement and requires far more patience and commitment than the distribution of solar flashlights. This new phase of development has its own characteristics:
- Solar training centers emerge, which also want to offer support in business start-up after successful completion of the exam.

  • Solar-home-systems are increasingly equipped with an intelligent technology that actively supports the micro-finance. The pioneers were here Afrisol in Morocco (since 2001) and the Stiftung Solarenergie - Solar Energy Foundation in Ethiopia (since 2004).
  • New producers are emerging, that offer bigger solar-home-systems and sell them together with a clever financing with rapid success.
  • In many countries, first attempts for a rural service network arise successfully: whether as fran-chise system, as informally bound network of small craft businesses or as independent power stations.
  • The range of products is increasingly no longer limited to "lighting", but is geared to the entire energy demand.

This new development phase is much more than before about sustainability and sustainable development in rural areas.
The new phase of development is urgently needed because the old phase has visibly reached its limits. New players will appear and provide a new impulse to rural electrification. And maybe it will be possible with the new phase also to finally provide the people in rural areas with comprehensive access to energy, which comprehends all areas of life. And so start up a real social and economic development, worthy of the name.

The driving actors of the old development phase included the World Bank-funded campaign "Lighting Africa" and many producers focused on micro solar lamps. It will be interesting to observe whether these actors will be able to join the qualitatively new stage of development, or whether they will degenerate into insignificance after a period of transition.