An Emerging Market for Off-Grid Solar’s Newest Frontier: PULSE

Ongoing innovation in technology and distribution models continues to be a hallmark of the off-grid solar sector. Having already led to hundreds of millions of people benefitting from off-grid solar products ranging from lanterns to solar home systems (SHS), products are now developing along the sector’s newest frontier – productive uses leveraging solar energy (PULSE). These can provide livelihoods for off-grid households and micro-enterprises across the agricultural, industrial, commercial, and public sectors.
A market for these new applications is emerging, and is explored in our new report, “The Market Opportunity for Productive Use Leveraging Solar Energy (PULSE) in Sub-Saharan Africa.” This report provides an overview of the market for PULSE micro-applications, which can be powered by standalone solar systems of one kilowatt or less. We narrowed the scope to products that largely overlap in size with the off-grid household solar sector in order to explore the opportunity to catalyse growth in the PULSE market and produce similar results to those achieved by Lighting Global’s country programs. The micro-PULSE segment represents a natural extension for off-grid manufacturers and suppliers that have achieved great success in expanding energy access in rural areas. Geographically, the focus of the report is on sub-Saharan Africa with a deeper dive on Kenya, Zimbabwe, and Cote d’Ivoire. It seeks to inform the strategy of industry, government, and development actors and to catalyze the market for PULSE solutions across Africa.

Benefits of PULSE
PULSE appliances can provide significant gains in productivity, especially in agriculture, where PULSE can have a tremendous impact. The majority of Africa’s off-grid households live in rural areas and are engaged in agricultural activities – for sustenance, or income, or both.  Most are smallholder farmers, often without access to electricity, many of whom are already using SHS to meet their household energy needs. Already familiar with the technology, they represent an optimum consumer base for PULSE applications, given the multiplied benefits these products can bring by increasing farming yields.
PULSE can also support government transformation agendas to:

  • Improve food security: 26% of the sub-Saharan African (SSA) population, aged 15 or older suffers from food insecurity. PULSE solutions can help meet the growing demand for food through increased productivity and reductions in post-harvest losses.
  • Increase farm productivity: Most land in SSA is tilled, ploughed, and weeded by human hands (65%) or animal power (25%). The use of machines could increase yields substantially by increasing efficiency up to five-fold or more.
  • Create employment opportunities: Agriculture sustains the livelihoods of more than 50% of the African population. Greater productivity and output can boost job creation, even after accounting for some net job loss from mechanization.
  • Enhance resilience to shocks: PULSE products can reduce vulnerability to multiple shocks by cushioning farmers from the impacts of climate change, fuel price variations, and fluctuations in market prices for agricultural produce.
  • Stimulate growth in the real economy: By increasing agricultural productivity, PULSE products stimulate socio-economic development. UNEP estimates that, for every 10% increase in farm yield, there has been an estimated 7% reduction in poverty in Africa and more than 5% in Asia. 

The Market for PULSE
The potential sub-Saharan African market for PULSE is large and growing, with irrigation applications most ready to scale. Our report estimates the total current “addressable” market in sub-Saharan Africa for three key PULSE appliances – irrigation pumps, cooling & refrigeration, and agro-processing. Considering only farmers that could – with basic access to credit – afford these appliances, the current “serviceable” market is USD 734 million.
And by just extending credit opportunities to include all farmers that would benefit from such a PULSE product, this market would soar to USD 11.3 billion.
PULSE appliances will also become more accessible in the future.  As the technology improves, the cost per unit of performance will go down, even as rural households will have more disposable income to invest due to rising rural incomes. Additionally, as PULSE firms increase their sales, they benefit from economies of scale in manufacturing and distribution.
Taking these expected trends into consideration, the report projects that  the serviceable market for just solar water pumps in sub-Saharan Africa will increase from USD 456 million today to USD 1.63 billion by 2030.
Market Interventions to Grow the Market
To maximize the addressibile market and the life-changing impacts that derive from PULSE, interventions in the sector like the ones Lighting Global has undertaken and supported over the past decade in the household off-grid solar sector, will play a critical role. Growing the PULSE market will require policy action, market development, concessional financing, and greater coordination between energy and agriculture actors. Interventions can help reduce retail prices, improve affordability, and expand distribution of PULSE products.
Two factors will be critical in creating successful PULSE interventions in Africa. First, to unlock market opportunities, agriculture and energy practitioners need to work together to break down constraints that arise in the supply-side energy sector and the demand-side agricultural sector. Secondly, the PULSE sector needs to be viewed across a spectrum of viability, not as one side of a set of binary options; different applications will have different operational and energy requirements.  As such, various solutions need to be considered and understood to find the best response to each particular need.
Taking these factors into consideration when targeting interventions will help successfully grow the PULSE market. At the same time, as the innovation that has always characterized the off-grid sector continues to refine products and delivery models, PULSE is well poised to deliver income generating equipment to millions currently living in energy poverty.