In a nation of smart homes, Bluetooth, and remote-controlled drones, it’s almost impossible to imagine a world without easy access to electricity. But for more than 1.1 billion people in the developing world, life without power is an unfortunate reality.
Last month, the New Energy Finance arm of Bloomberg published a comprehensive report on this problem, called “Powering the Last Billion.” The results were bleak: Much of the world’s population lacked access to reliable electricity—and 14 percent had no electricity at all.
What’s worse, these results seemed likely to persist: At the current pace of electrical grid extension, Bloomberg predicted, 700 million people would still lack electricity by 2030—the U.N.’s current target year for universal energy access. The majority of these people will live in Africa, where rapid population growth and slow grid extension has stymied efforts to expand electricity access in recent decades. Bloomberg predicts that about as many Africans will lack access in 2030 as they did in 2005.
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“In many places in Africa, the number of people reached by the grid is just so low,” Itamar Orlandi, one of the lead researchers on the report and Bloomberg’s Head of Frontier Power, told The Daily Beast.
But there’s hope. Due to remarkable advancements in at-home solar technology and home appliance efficiency, the traditional electrical grid is no longer the only option for families looking to power their homes. It’s especially true in places like Rwanda, Kenya, Uganda, and Tanzania, where mobile phone usage is high and grid strength is low. In those four countries alone, Bloomberg reports, one in ten residents are now using at-home solar systems.
The logic behind switching from the traditional grid to an at-home solar system is both practical and financial. For many rural families, Orlandi said, it’s logistically near-impossible to connect to the grid.
“If you want to be at the end of a grid line, you have to wait for the utility, and possibly the government to arrange a subsidy to build a grid line, planning commissions, infrastructure builds, permitting, all of these things,” he noted. “With solar, you can go into a store, it comes in a box, you can buy it, you can take it home […] it’s very simple, actually.” He also noted that even if a family manages to connect to the grid line, reliable power is far from guaranteed.
The financial calculus depends on two considerations: how close a family lives to existing grid lines, and how much electricity they use. Connecting to the traditional grid can have an extremely high overhead cost: For the 13 developing countries they analyzed, Bloomberg estimates it as between $355-$2,100, depending on distance. Amortizing this cost over subsequent electricity bills can raise the cost of electricity up to as high as $1 per kilowatt hour for decades (in the US, one kilowatt hour costs about 12 cents). Once that cost has been paid off, however, that price per kilowatt hour drops dramatically.
At-home solar is the opposite, Orlandi said: Panels and batteries are cheap to install (Bloomberg estimates $80 to $250 per unit), but each kilowatt hour of electricity can cost double or triple the traditional price, maxing out at about $1.66/kWh. This used to favor the grid—but as the technology has become cheaper, and LED electronics have reduced the amount of power low-income families need by more than two-thirds, solar power is becoming a much more viable option. Bloomberg reports that families who only use electricity for lighting and phone charging can use fewer than 72 kilowatt hours per year (the average American used nearly 30 a day in 2016), which can drastically shift the balance in solar’s favor.
“The leapfrog is starting to happen now. It’s been talked about for a while that Africa would leapfrog the grid … and I’m seeing it firsthand,” Xavier Helgesen, the founder and CEO of one of the at-home solar companies operating in East and West Africa, told The Daily Beast. “Because it’s cheaper, and more reliable, and you can own it.”
Helgesen’s company, Zola Electric, is one of the pioneers of the at-home solar movement. Zola works with approximately 900,000 families in Tanzania, Rwanda, Côte d’Ivoire, and Ghana to provide solar panels, batteries, and basic appliances for $500-$600, paid over three years in $15-$20 monthly installments.
Zola’s product isn’t much like the solar systems used in America and the rest of the Western world. Those systems are still connected to a major grid—during the day, they provide excess power to the grid; at night, they take it back. Zola’s product, on the other hand, is entirely independent. Excess energy collected during the day is stored in a lithium-ion battery about the size of a coffee table book; at night, the battery is used to power appliances like lights, chargers, and high-efficiency TV’s. Western solar systems are also complicated and time-consuming to set up; Zola’s system, Helgesen said, can be driven to a family on the back of a motorcycle and installed in under an hour.
While experts believe that solar systems make the most economic sense for rural families—for whom connecting to the grid can be incredibly expensive—Helgesen notes that the reliability and ease of solar systems has also attracted urban customers.
“You can even be 50 feet away from a power line, and it’s still extremely expensive and time-consuming to connect to the national grid in these countries. But even when you do connect, the power is not reliable,” Helgesen said. “The number one reason people buy our system is reliability. As long as the sun rises, they can count on their lights working.”
Any family can purchase a solar system from Zola by paying a three-month deposit upfront of approximately $50. They then pay the $15-$20 installments until they have paid off the remainder of their system. This should take about three years—but Helgesen said that many customers finish paying early. As a part of that package, Zola also provides lights, a television, and a radio.
As it stands, the system is far from perfect. The 200-300 watt hours per day produced by Zola’s system can’t power anything with high electrical demands, like a washing machine, dishwasher, or air conditioning unit.
But Helgesen argues that many of his customers would not have the funds to purchase those appliances, or the electricity required to power them, anyway—and that lights, television, and radio are a critical first step.
“A lot of our clients [...] rent for years and years and years while they literally build their home brick by brick,” Helgesen said. “And then when [they’re] done, the most important thing is ‘How do you get some electricity? How do you actually bring some life to the home?’ Because it’s not enough to build a home if you don’t have any lights in it.”
Helgesen also pointed out the public health value of moving away from the common previous light source: burning kerosene. “Indoor air pollution is the second biggest killer in the developing world,” Helgesen said. “It’s a huge issue. And one of the most toxic things you can breathe is fumes from burning kerosene lamps, because kerosene is jet fuel [...] If you’re burning them within an enclosed space, it’s like smoking two packs of cigarettes a night.”
Orlandi agrees with the public health benefits and possible financial benefits of switching to a solar system. He cautions, however, that the economic calculus will not make sense for all families, especially those with higher power demands that live closer to existing grid lines. Currently, he said, “It’s not an endorsing yes. The grid will remain, in terms of money spent, delivering power to a great number of people. It will still be the number one solution.”
But he appreciates the value that solar can add for the families that do not fit those criteria, and notes solar technology’s potential to eventually overtake the grid. “Solar can compliment that access,” he said, “and really bring power to a great number of people in the coming years.” The data from his Bloomberg report supports this: at-home solar is expected to generate over $26 billion in sales by 2030, and reach 72 million consumers.
Helgesen is even more optimistic about solar’s prospects. Once solar has demonstrated its capacity as an easier, cheaper, more reliable source, he said, “it’s an IQ test, it’s a default choice. And we’re seeing that become true for more and more households.”
