BLOG | (Em)powering Farmers in Africa
Nearly 600 million people in sub-Saharan Africa still don’t have access to grid electricity, and hundreds of millions more live with unreliable connections, plagued by frequent black-outs. The majority of these off-grid households are in rural areas, and depend on agricultural activities – for sustenance, or income, or both. With so many unable to power or afford appliances, a full 65% of land in Sub-Saharan Africa is tilled, ploughed, and weeded manually, resulting in globally low farm yields – while over a quarter of the adult population in the region suffers from food insecurity.
Electrical appliances, such as irrigation systems and refrigeration, could increase food production and reduce post-harvest losses – but without electricity and adequate financing options these solutions remain out of reach. Diesel-powered applications are used by some mid-sized and larger off-grid farms, but these appliances are typically not sized for small-scale farmers, and have other drawbacks including high pollution levels and high recurring costs.
Fortunately, a new slate of agricultural appliances suitable for small-holder farmers are now emerging in Africa — powered by off-grid solar energy.
Thanks to ongoing innovation in the off-grid sector, a host of productive use appliances that are powered by solar energy (productive use leveraging solar energy, or ‘PULSE’) are being developed, which can provide livelihoods and income-enhancing opportunities for households across the agricultural, industrial, commercial, and public sectors.
PULSE has immense potential in the agricultural sector. The use of machinery in farming can increase efficiency five-fold or more. The UNEP estimates that every 10% increase in farm yield has led to a 7% decrease in poverty in Africa. PULSE appliances can also help to cushion against shocks resulting from climate change and market-price fluctuations.
Given the scope of the opportunity these products bring, a rapidly growing market amongst farmers eager to reap the benefits is already emerging across sub-Saharan Africa – even as many products are still in the pilot stage. A new report from the World Bank Group’s Lighting Global program, “The Market Opportunity for Productive Use Leveraging Solar Energy (PULSE) in Sub-Saharan Africa,” looks at this market for three of the most in-demand and mature PULSE use cases in agriculture: irrigation, cooling & refrigeration, and agro-processing.
The market for PULSE
The report finds that, currently, solar water pumps can be implemented at the largest number of farms as they are relatively affordable as compared to alternatives, and can increase yields for farms starting as small as 0.5 hectares. An estimated 701,000 (of approximately 95 million) rural smallholder farmers in sub-Saharan Africa meet the basic conditions to be able to benefit from these pumps, based on farm size, lack of grid electricity, access to a water source, and adequate income. This represents a $734 million market, which is projected to more than triple to 2.8 million farmers – or a $1.6 billion market – by 2030, due to expected increases in population and income rates, coupled with lowering prices of PULSE appliances.
Despite these promising numbers, solar pumps remain out of reach for an additional 4.7 million farmers whose outputs would benefit from them, but who couldn’t afford the monthly repayments of between $20-$73, even if they had access to credit. And for the 701,000 that could theoretically afford the monthly payments – credit isn’t always readily available.
This financial gap has been a critical bottleneck – and driver for innovation – in the off-grid sector since its advent. The rural population tends to be among the poorest. In the absence of financing, this means that even the up-front cost of a solar lantern remains unaffordable to many, to say nothing of something as transformative – and relatively expensive – as a solar water pump.
Enabling access to finance and increasing affordability will be key in ensuring PULSE appliances reach those that need them most. Since kicking of its first pilot project in Kenya in 2009, creating avenues to finance has been a key pillar of Lighting Africa’s work in building sustainable markets for off-grid solar lighting and energy products. Since then, various financing schemes have been developed to enable access to an ever-wider array of products, including those driven by distributors, such as pay-as-you-go (PAYG) financing for solar home systems (SHS).
Today, over 25.5 million people across sub-Saharan Africa meet their basic electricity needs through quality-verified off-grid solar sources. Without dedicated market building efforts, it is extremely unlikely so many would have gained access, given financial realities.
The future of PULSE
These market-building efforts can now also benefit PULSE appliances, as they are well positioned to build on the existing distribution and financing channels in the off-grid sector. Many off-grid farmers are already using SHS for their household energy needs, so they understand and trust the benefits this technology brings, while manufacturers can tap into existing distribution streams. Pay-as-you-go (PAYG) models are already being adapted and piloted for the more expensive PULSE appliances, while asset leasing, guarantor loan structures and specialist agricultural credit facilities are starting to expand access to financing for PULSE, even as on-going R&D efforts are seeking to bring costs down.
Nonetheless, in order to maximize the impact of PULSE, and help governments achieve ambitious agricultural transformation initiatives and enhance the livelihood and food security of millions, a concerted effort will be needed to bring together the off-grid energy and agricultural sector, as recommended in the report.
Off-grid energy access efforts have long endeavoured to continually expand distribution until the people living at the last inch of the last mile are reached. Continually evolving technologies, resulting in products like PULSE, ensure that when that last mile is reached, lives can truly be transformed.