The Voice of the Off-Grid Solar Energy Industry Global Off-Grid Solar Market Report Semi-Annual Sales and Impact Data July - December 2020, Public Report 1 Executive Summary The off-grid industry is showing early signs of a slow but uneven recovery from the economic shock triggered by the COVID-19 pandemic. However, targeted support remains critical for safeguarding the industry and its vital contribution to energy access and other development goals. Data from July - December 2020 reveals that off- West Africa and Central Africa showed a 19% and grid solar lighting sales grew by 19% compared 40% increase, respectively. At the national level, to the first half of the year, totaling 3.6 million examples of countries benefiting from growth in products sold. Yet sales are still at the lowest level lighting sales compared to the same period in 2019 since 2015. The sector’s growth is far from the rate were Somalia and Nigeria, where the industry needed to achieve universal electrification targets benefited from strong government support. by 2030. Appliance sales, meanwhile, plateaued at Declines compared to the second half of 2019 were 470,000, with numbers failing to reach the levels seen in countries including Uganda, Zambia and of growth anticipated before the global health Ethiopia, linked respectively to extreme weather, and economic crisis. Looking at 2020 as a whole, retroactive import payments and a shortage of the drop in market growth due to the impacts of FOREX to import products. Appliance sales in COVID-19 resulted in an estimated 10- 15 million SSA also saw a decline compared to the second people and 300,000 - 450,000 enterprises missing half of 2019, however, this was noted across all out on improved energy access.1 regions. East Africa saw the smallest dip (5%) whilst bigger drops were seen in West Africa (11%) and The easing of lockdown restrictions in many Central Africa (32%). However, looking at specific countries in the second half of 2020 contributed technologies, positive signs also emerged, such to increased sales volumes compared to the first as the increase in the sale of solar water pumps in half of the year. Strong consumer demand in many West Africa. markets, despite the additional cash constraints placed on off-grid households as a result of the In contrast to the more positive overall picture pandemic, also demonstrated the importance that in SSA, sales of off-grid lighting in South Asia energy poor homes and businesses continued to remained 43% lower than those seen in the place on off-grid solutions. second half of 2019. This is in large part due to the continuation of low sales rates in India. Key drivers However, while this led to stability in some for these were the extension of localized lockdowns markets, this was not universal. The impact of the until the end of August, and difficulties faced by pandemic - as well as other local and regional microfinance institutions (MFIs) - the main sales factors - led to a wide variation in sales levels. channel for off-grid products in the country.2 Across Aside from the COVID crisis, challenging conditions the region, the industry saw a growth in the sale of such as extreme weather, political events, and fans but a decrease in the sale of televisions and fiscal changes on one hand, and positive initiatives solar water pumps when compared to the second such as relief funding and new programs on the half of 2019. other, added to the complex picture behind the global headlines. Only a third of solar lighting companies reported stable or increased sales compared to the second Looking at sub-Saharan Africa (SSA), sales of half of 2019, with more than half reporting sales lighting products in the second half of 2020 were decreases of over 25% and a third reporting sales only 4% below the levels seen in the second half reductions of more than 50%.3 These reduced sales of 2019, but regionally and nationally there was volumes and the wider impacts of the pandemic significant diversity. In the largest, East African, continued to add pressure on off-grid companies, market, sales volumes were still 10% below those with some previously buoyant enterprises reporting seen in the second half of 2019, while sales in zero, or low, sales in the second half of 2020.4 1 High level estimate based on access rates if sales numbers had been similar to numbers seen in 2019 (lower bound) or had risen by the same 13% increase as they did between 2018 and 2019 (upper bound), using the Standardised Impact Metrics. 2 MFIs in India MFIs in India were not eligible for the 3-month loan moratorium that the Central Bank provided for bank borrowers. This ag- gravated the economic situation for MFI borrowers, already suffering from losses of jobs and income, and meant that MFI lenders needed to focus on their current loans rather than the provision of any new loans for off-grid solar purchases. 3 Ibid. 4 Bespoke analysis of the sales volumes of off-grid solar manufacturers and distributors reporting in H2, 2019, H1, 2020 and H2, 2020. 2 Executive Summary The differences in company and market stability To reinforce the sectors’ foundations and propel not only reveal the large variation in impacts that growth, government, development partners, the COVID-19 pandemic has had on the industry, and investors must incorporate lessons learnt they also help to shine a spotlight on the actions and strengthen their support. Governments must or activities that have driven greater resiliency in provide the right environment for businesses to some countries or for some organizations. thrive and for their citizens to access clean, safe energy and appliances, development partners More robust sales levels can be seen where the must adapt and enhance their programmatic and sector has received dedicated support to respond financial support, and the investment community to the crisis: where investors have implemented must continue to work with companies to develop relief funding or worked with companies to help innovative financing mechanisms. Crucially, them to secure and enhance their operations, given the extent of the economic impact of the where government incentives have helped local pandemic on the sector and its customers, there is markets to expand, or where programmatic a role for an immediate increase in the availability innovation has helped the industry to adapt to of grant and concessional financing. the changing market environment. The ability of companies themselves to ‘weather the storm’ of The off-grid sector can help power recovery from the economic and health crisis, and adapt to the the COVID-19 pandemic, drive climate resiliency challenging operating conditions, has also played and enable a billion people to switch to clean a key role. energy technologies. It supports enterprise, boosts household income, and enhances the welfare of some of the world’s poorest communities. If the market is protected and enhanced, the impact and environmental wins will be myriad. They will also be fast. We know what unlocks growth. The time to act is now. Content Team Sjef Ketelaars, Susie Wheeldon and Oliver Reynolds GOGLA Salman Zahir, Leo Blyth and Johanna Galan Lighting Global, IFC / World Bank Andrew Tod, Leo Blyth and Richa Goyal Efficiency for Access Coalition, Energy Saving Trust Makena Ireri, Michael Mwangi and Jenny Corry Smith Efficiency for Access Coalition, CLASP Marlon Drent, Ard Kot, Thomas van Biemen and Charlotte Asma Berenschot Cover © Azuri Technologies 3 Table of Content About the report 5 Authors 5 Global Insights 6 Background 7 Sales and Impact Trends 9 East Africa Insights 26 Sales Trends 27 West Africa Insights 47 Sales Trends 48 Central Africa Insights 69 Sales Trends 70 South Asia Insights 77 Sales Trends 78 East Asia & Pacific Insights 88 Sales Trends 89 Methodology 97 Methodology of Sales Data Collection 98 Scope 98 Data Collection 100 Data Aggregation and Segmentation 101 Product Categorisation 103 Methodology of Impact Metrics Estimation 106 Methodology 106 Limitations 106 Contact Information and Photo Credits 109 4 About the Report Authors GOGLA Efficiency for Access Coalition GOGLA is the global association for the off- Efficiency for Access is a global coalition working to grid solar energy industry. Established in 2012, promote high performing appliances that enable GOGLA now represents over 200 members as an access to clean energy for the world’s poorest independent, not-for-profit industry association. people. It is a catalyst for change, accelerating Its mission is to help its members build sustainable the growth of off-grid appliance markets to boost markets, delivering quality, affordable products, incomes, reduce carbon emissions, improve quality and services to as many households, businesses of life, and support sustainable development. and communities as possible across the developing Efficiency for Access consists of 15 Donor world. The products and solutions that GOGLA Roundtable Members, 10 Programme Partners, members sell transform lives. They improve and more than 30 Investor Network members. health and education, create jobs and income Current Efficiency for Access Coalition members opportunities, and help consumers save money. have programmes and initiatives spanning 44 To find out more, go to www.gogla.org countries and 22 key technologies. The Efficiency for Access Coalition is coordinated jointly by CLASP, Lighting Global an international appliance energy efficiency and Lighting Global is the World Bank Group’s initiative market development specialist not-for-profit to rapidly increase access to off-grid solar energy organisation, and UK’s Energy Saving Trust, which for the 789 million people worldwide living specialises in energy efficiency product verification, without electricity. Lighting Global - managed data and insight, advice, and research. by the International Finance Corporation (IFC) For more information, please visit and the World Bank - works with manufacturers, www.efficiencyforaccess.org distributors, governments, and other development partners to build and grow the modern off-grid The appliances section of this report has been solar energy market.