A clean, reliable source of energy changes lives. A healthy light to read by allows work, study, and leisure activities to extend past daylight hours. A charged phone keeps loved ones in touch, and households informed. Refrigeration ensures extended shelf-lives, and therefore sales periods for agricultural businesses. These energy-reliant activities – and countless more – help to improve quality of life and allow beneficiaries to climb the energy-access ladder out of poverty. But how can poor, rural and remote populations take the first step when for hundreds of millions even the lowest rung solutions are financially and geographically out of reach?
To date, the majority of successful interventions driven by Lighting Global and other development partners have served to expand access and lower the costs of off-grid energy products to end-users by improving the enabling environment and lowering the cost of doing business for suppliers and distributors. In other words; supply-side interventions. These market support activities, including consumer education campaigns, VAT exemptions, publicly shared market intelligence, and funding financing facilities have been tremendously successful, contributing to the sale of over 53.9 million quality verified off-grid solar products in low and middle-income countries between 2009 – 2021.
But it isn’t enough. While hundreds of millions of lives have been energized by off-grid solar, hundreds of millions more are in danger of being left behind. Even pre-COVID, 230 million people were projected to be missed in our drive towards SDG7 – clean energy for all. To close this remaining gap, we must work to make off-grid solar products affordable to even the poorest people on the planet. End-user subsidies, which bring down the cost at the point of purchase, can do just that. At the same time, caution must be used when applying such subsidies, so as not to undermine the market – and thereby undo the tremendous success the sector has had in expanding access thus far.
To address this issue, together with GOGLA, EnDev, and ACE, we have created the End User Subsidy Lab, which serves to pool knowledge, technical expertise, and funding to enable stakeholders to design and apply effective subsidies for off-grid solar and clean cooking products. Among our key activities are:
- Hosting the go-to knowledge hub on subsidies: collecting and curating insights from the sector and making them available online. Case studies, such as these, further help decision makers to hone lessons learned and improve outcomes of subsidy programs:
- Kenya – Conditional Cash Transfers in Kenya for Off-Grid Solar Energy Cash Plus / Mwangaza Mashinani Programme
- Bangladesh – How IDCOL Addressed the Affordability Gap: Lessons from Bangladesh’s Solar Home System Program
- Togo – Togo CIZO Cheque Program
- Rwanda – EnDev’s Pro-Poor Results-Based Financing in Rwanda
- Creating a pipeline of ‘ready to fund and roll out’ country pilots: supporting country teams with guidance and expertise in developing and testing end user subsidy designs.
- Enabling transformative thought leadership: to stimulate the development of innovative and impactful designs, and ideate new frameworks and approaches that can help to reduce the affordability gap and promote inclusive and holistic market development.
Despite the setbacks COVID has brought, we remain committed to reaching everyone in need with off-grid energy products. We hope you will join us in exchanging knowledge and experience so that we can continue to adapt our approaches to have the biggest possible impact and reach even the hardest to reach.