Pandemic casts shadow on off-grid solar sales in poorer nations

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Wednesday, 14 October 2020 16:49 GMT

Children watch employees of Salpha Energy installing a music player powered by solar energy in their home at Sagbo-Kodji community, amid concerns over the spread of coronavirus disease (COVID-19) in Lagos, Nigeria April 25, 2020. REUTERS/Temilade Adelaja

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Sales of off-grid solar products fell sharply in the first half of the year, even as many poorer households relied on them during lockdowns

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By Megan Rowling

BARCELONA, Oct 14 (Thomson Reuters Foundation) - As the coronavirus pandemic hit trade and incomes hard in developing nations, sales of off-grid solar products fell sharply in the first half of the year, even as many poorer households relied on them during lockdowns.

Data compiled by GOGLA, the association for the off-grid solar energy industry, found global sales of lighting products fell 26% from the same period in 2019, hitting the lowest volume since 2014 and curbing the sector's record-breaking growth.

In a report released on Wednesday, GOGLA noted that before the COVID-19 crisis, the off-grid solar industry had expected to see continued expansion, adding to its 370,000 clean energy jobs in Africa and South Asia, and powering millions more homes and businesses.

But the pandemic now threatens the ability to reach and maintain the 13% annual growth rate needed to meet a global goal to provide sustainable, affordable energy for all by 2030, it said. Growth had been running at 10% over the past three years.

The downturn comes even as the health emergency has made clear the importance of electrification for everything from powering clinics to helping children learn at home and keeping small businesses operating, said GOGLA's research lead Susie Wheeldon.

Expanding access to off-grid solar power also "will be really influential on the speed of recovery more generally for low-income countries", she told the Thomson Reuters Foundation.

The situation so far has varied across regions, largely shaped by government regulations in response to the pandemic.

In about 10 African countries, for example, solar home systems and products were designated an "essential service", enabling companies to continue sales and support during pandemic lockdowns.

As a result, sales of solar lighting products in East Africa dipped just 11% in the first half of 2020 compared to the same period in 2019, with cash sales suffering more than pay-as-you-go systems.

In South Asia, by contrast, where off-grid solar power was not accorded special status and Indian micro-finance borrowers were not given a moratorium on repaying loans for solar products, sales plummeted by nearly 60%.

Many solar companies have tried to ease the burden on low-income buyers in response to job losses and other lockdown-related economic problems, the report said.

The majority have offered grace periods on repayments, rescheduled debt or made minimum payments smaller on products.

Some also reported using their call centres and agents to provide health information to rural households, and to offer health and life insurance. Others provided solar power and other energy products to health centres without electricity.

"They have been using the skills that they have developed in terms of being young and nimble enterprises to try and adapt to the new normal," Wheeldon said.

Sales of solar-powered, energy-efficient appliances also took a knock in the first half of the year, the report noted.

Sales of fans saw the largest absolute decline, while solar water pumps and refrigeration units also saw a halt in growth.

Solar-powered televisions, on the other hand, saw stable sales, likely the result of customer demand for entertainment and information during lockdowns.

Overall, however, the pandemic is slowing already-lagging progress on providing universal access to electricity by 2030, the International Energy Agency said.

It now projects 660 million people worldwide will still be living without electric power by 2030, or perhaps as many as 760 million if the pandemic recovery is delayed, GOGLA said.

Wheeldon said efforts underway by investors, donors and development agencies to provide relief funding to solar companies could help limit the damage, however, and pave the way for getting off-grid solar expansion back on track by 2022.

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(Reporting by Megan Rowling @meganrowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org/climate)

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