Our partners:

Koen Peters

Supporting a diverse, competitive, growing off-grid solar sector

GOGLA, the global association for the off-grid solar energy industry, was founded in 2012 by 7 companies. Today the association has 135 members and has developed into the leading representative of the global off-grid industry. Koen Peters has been Executive Director of GOGLA since 2014. Sun-Connect News had the opportunity to talk to Koen Peters about current developments in the market.

Sun-Connect News (SC): GOGLA describes itself as "the voice of industry". This is certainly true for international companies. Does GOGLA have plans to increasingly integrate the local off-grid companies into the association and to support their special concerns?

Koen Peters (KP): We welcome member applications from local companies, but ultimately each organization needs to decide if it is valuable to join GOGLA. There are local companies who consider it important to have access to our network and services, equally there are international players who have so far decided against membership. As the industry association of the off-grid solar sector, we fully agree we need more and different kinds of companies in the market. Our service offer for smaller companies includes advocacy for diverse funding sources as well as sharing technical assistance and business development opportunities. We have a special start-up fee for early-stage companies to make the barrier to joining GOGLA as low as possible. 

SC: Decentralised energy supply is becoming increasingly important in industrialised nations. In developing countries, their potential is even greater because there is no nationwide power grid. Nevertheless, the majority of investments and subsidies worldwide go into the old, central energy technology. How do you assess the development and what can GOGLA do to counteract this?

KP: First, we do not advocate against grid extension. Expanding the grid and increasing its reliability in developing countries is important. However, we do believe that the balance in terms of focus and investment is not as it should be. It is now clear that off-grid solutions are the fastest and most affordable route to reliable, clean energy access for a large part of the one billion people living without power. We do not yet see this reflected in how funding (both public and private) is distributed across energy investments. Fortunately, we do see encouraging developments with a noticeable shift in the strategy of larger institutions, such as The World Bank. The African Development Bank has also embraced off-grid energy solutions as a catalyst for energy access and economic development across the continent. It will still take some time to see the effects of this shift on the ground, but we are moving in the right direction.

GOGLA of course has a role in encouraging this development through its advocacy work towards governments, investors and donors. We can’t do this alone, and we are not doing this alone. So other than raising our own voice, our second role is to ensure messaging is aligned with others advocating for the same things, making sure our combined voices are heard twice as loud.    

SC: In many countries there are local solar associations. Unfortunately, they often have little influence on local policy. On the other hand, their concern is the same as that of GOGLA: Wouldn't it be an option to unite these associations under the umbrella of GOGLA? Then perhaps GOGLA could also exert more influence on local policy decisions.

KP: We do work with national renewable energy associations in key markets, for example with CLEAN in India, KEREA in Kenya or REAN in Nigeria. Nine local associations have joined GOGLA as associated members. We do want these groups to be powerful players whose voices are heard by policy-makers and regulators. That is why we would like to further invest in building their capacity. As part of this drive we have invested in our own regional representation with two colleagues working in Mumbai and Nairobi. We are close to establishing a third regional representation in West Africa –  and one of the key tasks for the new team member will be to build relations with national renewable energy associations. 

SC:Today (almost) everything revolves around the PAYG model when it comes to investments in the off-grid sector. How do you rate this strong concentration, is there not a risk here?

KP: It is certainly true that PAYG companies have been successful in attracting increasing sums of investment. I view this as entirely positive, while knowing also that PAYG companies have significant funding challenges. It is sometimes suggested, however, that investment which now goes to PAYG companies would otherwise have gone to companies with other business models, but I think that is a an incorrect assumption. Investors do not invest more in PAYG because they are in fashion, but because for many different reasons these companies fit their investment criteria, whereas this is less the case for other business models.

This does concern us. GOGLA has an interest in supporting a diverse, competitive, growing off-grid solar sector with both local and international companies, large and small, relying on various business models. The PAYG model is a promising one, but it is not a single perfect solution for all needs and situations. We therefore support companies with other business models just as well. For example, through local events, freely available learning resources such as the GOGLA Academy and our cooperation with national renewable energy associations, we aim to support local companies and startups in entering the market and attracting investment. 

SC: The impact of off-grid solar on economic and social development has now been proven in numerous studies and is beyond doubt. The sector has started with light and mobile phone charging, then came televisions, refrigerators and water pumps. What do you see as the next drivers of economic development in the off-grid sector?

KP: First, I would say that the sector is only beginning to roll out refrigeration and productive use appliances such as water pumps. Even off-grid televisions have only been around for a few years, so there’s a lot of potential for further innovation and growth, particularly in the larger household appliances and productive use segments. Energy efficiency is one of the key factors for this development, and after televisions, fridges and pumps there may be many more appliances that can be powered by off-grid solar power if (re-)designed for improved efficiency. If we look further ahead, companies might seek to widen the definition of ‘access’ by expanding their portfolio to include internet connectivity or giving people access to financial services. This is a potentially exciting development where we are starting to see  experimentation, we don’t know yet know how far this might extend.  

As our recent ‘Powering Opportunity’ study demonstrated, many end-users are using off-grid solar power to expand their incomes, in various forms. Often these are creative ideas that product designers might never think of. These ideas may drive further innovation as well, in terms of technology, cost reductions or service offerings. To a certain extent this innovation may come from current off-grid solar businesses, but it will also bring new players to the sector – including some that may not so easily be categorized in a certain industry segment. We want to keep an open mind here and be the industry association for all off-grid solar businesses. 

SC: GOGLA has always been strongly committed to securing quality products in the market. Are there any new developments and plans here?

KP: There are strong and established methods to ensure the quality of off-grid solar products the moment they come out of the factory – including solar home systems sold as plug-and-play kits. We know that quality-verified products perform better in tests than generic products. Investors and institutional buyers, such as humanitarian aid agencies, increasingly recognize the value of such verification as a risk mitigation factor. This is positive, although there remains much marketing to be done.

However, translating verified quality into a market advantage for customers is significantly more challenging. If we look at the latest sales figures, generic, unbranded products seem to do better in the solar lantern segment in many markets than quality-verified products. These ‘generics’ include products that offer good value for money, but also those that are low quality and are taking customers for something of a ride. Some governments have introduced border control regulation to keep low-quality products out of the market. This is helpful, although it often comes with own challenges attached as well.

Unfortunately, we don’t have much hard data on this side of the market and we particularly lack evidence demonstrating that quality-verified products lead to higher customer satisfaction. We need to better understand what quality means for customers and how to cater for their needs so that we can advocate for more accurate measures to address such market challenges. 

SC: Quality standards are needed not only for technology, but also for the second, equally important component of off-grid energy: customer service. Customers are sometimes offered products with unclear credit terms or false service promises. Customers who are inexperienced in these things often recognize too late what they have gotten involved with. Don't you also need a quality standard for customer service?

KP: Absolutely. In fact, GOGLA has already initiated a process to bring the industry together on consumer protection principles in the off-grid solar sector. Our members have now internally agreed on six principles including good customer service, data privacy and responsible sales and pricing. We are at the beginning of this process: companies and stakeholders now have the opportunity to commit to or endorse the principles. The next few months will see further consultation with companies and consumers, also to explore how companies can show they adhere to these principles. It is great to see that so many GOGLA members are taking part in this process showing that the customer is central to the success of the industry.