Off-Grid Power Sector Key to Providing Sustainable Electricity to People

More than a billion people across the globe still lack access to electricity. That impedes people’s efforts to lift themselves out of poverty—energy is one of the key drivers of development, helping create opportunities and improve livelihoods.

Electricity services have remained beyond the reach of many, especially those in remote regions, mainly because traditional electricity grids are expensive to build.

However, over the past several years, the private sector has made rapid progress in tackling the problem by bringing sustainable off-grid electricity services to previously underserved people. About 66 million people have gained access to energy services through off-grid solar solutions since 2008, when IFC and the World Bank first began working with the nascent solar lighting industry. That has helped people save around $3 billion, an amount they otherwise would have spent on other energy sources such as kerosene, dry cell batteries, and candles—which are expensive and environmentally harmful.

IFC and the World Bank continue to play a major role in supporting the off-grid electricity industry, including solar power. Under the joint Lighting Global program, for example, we work with the Global Off-Grid Lighting Association, or GOGLA, manufacturers, and other partners to develop the off-grid lighting market.

 

Expanding further

In recent years, the off-grid lighting market has received a boost from technological advances in devices such as light-emitting diodes and efficient television sets. For instance, over the past 13 years, the prices of batteries, solar cells, and LEDs have fallen by 90 percent. These developments have made new products available to end users who previously did not have access to quality products.

By 2020, the off-grid lighting industry is expected to further expand, providing electricity to nearly 100 million homes, according to data unveiled at the 4th International Off-Grid Lighting Conference, an event organized by GOGLA and the Bank Group that took place in Dubai in October.

At the conference, about 500 participants from around the world—including investors, entrepreneurs, government representatives, and technology leaders—came together to share their efforts to expand off-grid energy use.

“This is no longer just a solar-lighting industry but a solar-energy services industry, providing the previously underserved the ability to climb the energy ladder, emerge from a state of energy poverty and leap up the economic development mountain,” said IFC’s Global Head of Energy Access Russell Sturm.

Findings from a Bloomberg New Energy Finance report to be released in January 2016 highlight how investors have taken note and pumped almost a quarter of a billion dollars into the sector in the past two years, with emerging pay-as-you-go business models gaining particular traction.

Originally published in October 2015