Global off-grid solar market. New report by the World Bank Group

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The World Bank has published a new report analysing the world’s markets of off-grid solar energy. This sector still remains largely undiscovered in Ukraine. But as we can see from the report results, for many countries it is becoming one of the core directions of renewable energy development.

We have gathered key highlights from the report, while you can download the full publication here.

US$ 1.75 billion market serving 420 million users

The off-grid solar sector has grown tremendously over the past 10 years into a vibrant, US$ 1.75 billion annual market, which remains on a solid growth curve.1 The sector is currently serving 420 million users. From 2017 to 2019, revenues grew rapidly at 30 percent annually, while salesvolumes grew at 10 percent annually. A shift towards higher-priced Pay-As-You-Go (PAYGo)–enabled products that provide higher levels of energy service has driven this rapid growth in sector turnover. While pico products still comprise around 83 percent of all sales since 2010, the growing reach of larger SHS products means that over half of offgrid solar customers now receive “Tier 1” access or higher to a clean, modern, and reliable source of electricity.

38 percent annual increase in PAYGo unit sales

As the sector matures, companies are increasingly focused on financial sustainability. Companies are moving into new geographies and underserved markets as established markets become more saturated. They are also accelerating the shift towards larger, higher-margin SHS sales in response to growing consumer demand for appliances and backup systems, which dovetails with their focus on financial sustainability. In addition, two new business models are solidifying: (1)“beyond energy” companies using consumer PAYGo data to offer financing for non-energy products and services and (2) next-generation off-grid utilities.

Potential market of 1.8 billion people and over 70 million farmers

The global potential OGS market remains substantial, with 840 million people without electricity access, over 1 billion connected to an unreliable grid, over 70 million farmers who could leverage OGS for productive use and a promising public institutions market. Productive Use Leveraging Solar Energy (PULSE) solutions, such as solar water pumps (SWPs), cold storage, and solar milling, and products servicing public institutions are natural expansions of the traditional OGS market, which serves households and microenterprises. Both of these markets hold tremendous potential opportunities.

US$ 1.5 billion in investment since 2012

Several signs speak to the industry’s growing financial maturity, such as an increase in debt investments and larger ticket sizes. Despite this progress, funding gaps remain, particularly for Second- and Third-Generation companies, which have been unable to raise equity. Investor types are also shifting, with increased engagement from larger strategic investors, specialized debt providers, and crowdfunding, although a lack of local funding sources persists. To accelerate funding for the sector and attract investors will require innovative financing mechanisms, and companies will need to demonstrate profitability and increase transparency around operational efficiencies.

823 million users by 2030

The OGS sector remains on a strong growth trajectory; the sector is projected to serve 823 million users with OGS products by 2030. To sustain the current market growth trajectory, the sector will require an investment of US$ 1.7–2.2 billion in the next five years.

You can download the full Report here.