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Koen Peters

"Partnerships are important for the success of the off-grid solar industry"

The off-grid solar industry is entering its second decade with sales in significant volumes – a milestone that was recognized and discussed at the 6th edition of the Global Off-Grid Solar Forum and Expo in Nairobi, jointly organized by GOGLA and the World Bank Group’s Lighting Global initiative.

With over 1,250 participants from 75 countries, at least 85 exhibitors and over 80 government officials attending, this was our biggest event yet. This year’s event was also the first to benefit from recognition by a head of state, with H.E. The President of the Republic of Kenya Hon. Uhuru Kenyatta officially opening the event.

Here are a few key takeaways from three days of discussions, learning and networking:

1. We have come a long way as an industry, and we have achieved a lot in the past decade

A theme reverberating throughout the event was the astounding achievements of the off-grid solar industry over the past decade. As an industry, we are currently serving 420 million customers across the globe and have grown into a USD 1.75 billion market, from a near standstill start in 2010. Off-grid solar is clearly on the radar of governments and development partners and its role in helping to deliver universal energy access is well beyond discussion. That is significant and something worth recognizing.

Clearly, we also have big challenges as we move forward into this new decade. There is still plenty to do for the industry to be sustainably successful, ánd to meet the needs of all consumers across all developing countries. But we have some good foundations to build on.

2. Partnerships are important for the success of the off-grid solar industry

Partnerships was the word we heard the most throughout sessions and discussions. Off-grid solar energy companies, governments, development partners, and investors all agreed there was a need to build on existing cooperation models and to forge new and innovative partnerships, to be successful going forward. Specifically, three areas of ‘partnerships’ were discussed:

a. Partnerships in the supply chain

The PAYGo business model within the industry has shown success on many fronts, but its financial sustainability over the longer term is not yet fully proven. There was a widely shared call for simplifying the complex vertically integrated model, as a precondition for achieving longer-term profitability and sustainable performance. This requires off-grid solar companies to focus more on their core strengths while outsourcing other important elements of their business to trusted partners who might be better at achieving them.

These partnerships are not easy to build and demand a lot of mutual trust. Coupled with this, there was a clear call for more transparency regarding financial and operational performance. Many participants commented they felt much progression in willingness among the industry to discuss this – it seems the off-grid solar industry recognizes that transparency is important to succeed and to maintain the confidence of partners that they work with.

b. Public-Private Partnerships

The Forum this year saw the participation of a diverse set of government officials. Some 20 governments, together with World Bank, organized well-attended country sessions. Also, for the first time the host government – Government of Kenya - played an active role in the organization and planning of the event, helping us make it a resounding success.

This strong show of governments was valuable. It demonstrated a shared responsibility in making this market a success, reaching everyone who is still in demand of reliable, modern electricity services. It helped to discuss what the role is of each stakeholder in making sure that off-grid solar delivers its part of electrification plans and energy access targets, and to listen to each others’ concerns about what may be standing in the way.  

One specific concern that was discussed a lot: how to ensure we reach each and every customer. In many sessions there was talk around using public funding for subsidies. This signals a shift in thinking within the industry itself, which in the past has often been cautious to advocate for subsidies in fear of distortion of the market. Early successes with “results-based financing” (another buzz-word at the Forum) is creating expectation. It remains important to be cautious though. Getting subsidy schemes right and successful is not easy. It is crucial for the industry to stay organized and be fully part of the conversation where subsidy schemes are being designed and implemented, to ensure we learn from past successes and failures and ensure we get it right.

c. Partnerships “beyond energy”

Appliances are increasingly becoming an important part of the business models for many off-grid solar companies, shifting the focus beyond providing power for light, phone charging, radios, and televisions. Today’s off-grid solar technology can also power products in agriculture, offer an asset base to provide financial loans, or strengthen the performance of mobile telecom operators.

But with these opportunities comes a need to better understand these new customer demands, and to build new networks to service them. As an industry, we are starting to build partnerships with adjacent industries that already have this understanding and these networks. This was also reflected at the forum, for instance with attendees representing agricultural and mobile telecom industries diving into conversations with us energy folks, or with a large group of last-mile distributors offering a broader range of products and services being part of the conversation. I am confident that the next edition of GOGSFE will see more such discussions – focusing on an even broader range of and more partnerships.

3. We need to understand our customers to be capable of fulfilling their requirements

Off-grid solar has clearly proven itself as an affordable and reliable source of energy for many of its customers. But to truly succeed as an industry and become profitable, we need to understand them and their needs, before charting the best possible ways to serve them.

At the Forum we looked at this need from different angles – from consumer protection, to serving the growing aspirations of consumers. We looked at how off-grid solar helps consumers improve their quality of life and generate more income-earning opportunities. And we agreed, repeatedly, that we only stand a chance to sustain our success, if we manage to continue serving the customer needs well.

For a selection of resources from on the Global Off-Grid Solar Forum and Expo, visit our resources page here.

 

 

Source: https://www.gogla.org/about-us/blogs/partnerships-are-important-for-the-success-of-the-off-grid-solar-industry