Executive Summary In the second half of 2021, the off-grid solar industry continued its recovery from the COVID-19pandemic. Although this has overall been slower than originally hoped, some segments of the market are now back on an overall upwards trajectory. Underneath these general trends, however, remain large disparities between individual markets. The global highlights from the sales data presented in this report paint a cautiously positive picture of an industry on a slow path to recovery despite headwinds including supply chain disruptions, increased costs and lower ability to pay among consumers in key markets. Looking beyond the headline figures reveals that there is in fact a vast disparity of trends in each country, product category, business model or individual company. Yet, whether at the global or granular level, one fact remains clear, the number of sales still lag behind the amount needed for the off-grid sector to maximize its contribution to meeting SDG7: electrification for all.
Global Insights Background The last two years have been dominated by the COVID-19 pandemic and its effects on global health and the economy. While the entire world has been affected by the pandemic, low income countries, and the most vulnerable within these countries will have most particularly felt the economic impact. Surveys show the poorest households in the world are also those that, on average, saw the largest relative income losses in 2020 and 20216. Economic outlooks for emerging and developing markets also forecast a slow and fragile recovery-slower than in advanced economies. The consequence for years to come will be increased global inequalities and a struggle to compensate for the unraveling of years of progress on economic development in the Global South8&9. The global economy, including developing markets, began to recover in 2021. Yet, the off-grid solar industry remained affected by the aftermath of the pandemic. As highlighted in previous reports, the pandemic has caused adverse effects on both supply and demand for the industry. In 2020, issues were often linked to restrictions affecting companies’ ability to operate or potential customers’ ability to go out and purchase products. In 2021, it is the disruption of supply chains, rising prices and slow recovery of income losses10 that have slowed the growth of many off-grid solar companies.
Off-grid lighting products Global affiliate sales of lighting products between July and December 2021 stand at almost 4 million units. This is a 15% increase compared to the first half of 2021. Before COVID-19, global sales reached 4.4 million units in the second half of 2019. While global volumes remain 10% lower than this pre-COVID benchmark, it is the first time in two years that sales are close to pre-pandemic volumes. Of the 4 million units sold, 2.44 million were sold cash and 1.53 million products were sold PAYGo. Cash sales have increased by 8% compared to the first half of 2021, but are still 25% lower than the 3.1 million units sold in the second half of 2019. The global value of cash sales for the first half of 2021 is close to US$60 million17. Despite cash sales having increased compared to the previous round, the total value of cash sales has decreased due to lower cash sales of SHS. Anecdotal evidence points at bulk procurements having contributed to higher cash sales of SHS in the first half of 2021.
Off-grid solar appliances21 In the context of this series of sales reports, the appliance section focuses on reporting sales of appliances which have reached mainstream levels of production22. These are currently regarded as: TVs, fans, RUs and SWPs. These are collectively referred to as “key appliances” when reported in aggregate, and these separate appliances are reported individually where sufficient sales warrant it. Between July and December 2021, affiliate companies reported total global sales of 338,000 units of the key appliances represented in this report. TVs represented 58% of these sales, with 196,000 units. This was followed by fans with 144,000 units (40% of the global total). SWPs and RUs represented 2% and 1% of these off-grid appliance global sales, with 6,600 and 2,200 units, respectively.
East Africa Insights Off-grid lighting products Sales of off-grid lighting products in East Africa between July- December 2021 reached almost 2.1 million units. This is a 4% increase compared to the first half of 2021 and a 15% decrease compared to the second half of 2019. Cash sales further decreased while PAYGo returned to growth. Cash sales decreased by 8% compared to the first half of the year, and 32% lower than during the second half of 2019. PAYGo sales on the other hand grew by 20% compared to the previous reporting round and are now 14% higher than during the second half of 2019 before the COVID-19 pandemic.
West Africa Insights Off-grid lighting products Sales of off-grid lighting products in West Africa between July and December 2021 reached 586,000 units. This is a 23% increase compared to the first half of 2021 and a 60% increase compared to the second half of 2019 and signals a potential acceleration in the sector’s positive dynamic in the region. Both cash and PAYGo sales grew compared to the previous reporting round. Around 243,000 units were sold on a cash basis. This is an 11% increase in volumes compared to the first half of 2021 and 39% more than the second half of 2019. 343,000 units were reported sold via PAYGo in the second half West Africa Insights NOTE: Products are classified as ‘Cash’ when sold in a single transaction (including products purchased via tenders), or as ‘PAYGo’, when the customer pays for the product in installments over time or pays for use of the product as a service. of 2021. This is a 33% increase compared to the last reporting round, and 79% higher than in the second half of 2019.
Central Africa Insights Countries Overview Both Cameroon and DRC have seen strong growth in sales compared to the first half of 2021. Unfortunately, not enough companies reported data in other markets for them to be included in this report. Off-grid solar appliances 97% of sales of appliances reported in the region are from the DRC. The vast majority of these are TVs and fans which are sold bundled with SHS. Therefore, trends in lighting products for DRC are reflected in the appliance data. Total volumes of key appliances sold increased by 59% compared to the second half of 2020. Product Trends Limited data is available on appliance sales per appliance type due to the number of companies reporting appliance sales in the DRC.
South Asia Insights Background India had been particularly hard-hit by the pandemic during the first half of 2021 with companies struggling with supply chain disruptions and COVID-19 related restrictions affecting their ability to operate. Insights shared by companies highlight that there are some positive signs from distributors, including MFIs, which play a key role in the Indian market. Supply chain issues remain an obstacle. However, despite positive signals for 2022, sales reported in India have been on a structurally declining trend as the product mix is evolving away from traditional off-grid products like solar lanterns towards weak-grid products which this report does not aim to capture. Companies in the off-grid sector are adapting to this progressive pivot and diversifying to include weak grid products in their portfolio. Nonetheless, lanterns and other off-grid solar solutions remain relevant for the Indian market for outdoor usage, as a back-up to the grid or as a primary source ahead of the grid.
East Asia & Pacific Insights Off-grid solar appliances Appliance sales in the East Asia and Pacific region seem to be slowly building back up after falling below 4,000 units in the first half of 2020. Between July and December 2021, over 10,000 units of key appliances were sold in the region. The vast majority were sold in cash. Volumes reported for the second half of 2021 are on par with volumes reported in 2019 before the pandemic. The sales include 8,600 fans and 1,100 TVs. The majority of all appliances are reported as being sold bundled with a power system.Unfortunately data on sales of RUs and SWPs cannot be shared due to the number of companies participating in the data collection.
Energy Access GOGLA affiliates have cumulatively provided access to energy to over 380 million people based on sales reported to GOGLA alone. Currently, 101 million people benefit from improved energy access through an off-grid solar product. Of these 101 million, 55 million are currently accessing Tier 1 systems and 14 million are accessing larger SHS, Tier 2, solutions55. The prolonged fall in sales volumes caused by the COVID-19 pandemic along with past sales reaching their expected lifespan had led to a stagnation in the number of people currently benefiting from energy access. However, with the progressive return to growth, energy access metrics are slowly gaining pace again. Nonetheless, more than 700 million people are still living in energy poverty56, and population growth means that millions more will need to be reached by 2030. COVID-19 has slowed down the progress made by off-grid solar in reaching the unserved. It is estimated that during the last two years an additional 31 million people could have been reached if the industry had remained on its 2019 growth trajectory.
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