Sizing Up Africa's Off-Grid Electricity Market

Under current projections, in 2030, 80% of the world’s un-electrified population - 500 million people - will reside in rural Africa. Bringing electricity to this population will require an unprecedented use of mini-grids and standalone solar home systems. This analysis compares household demand for power in rural Africa with the estimated cost of supply from off-grid systems. Based on current conditions, it will be difficult to meet international goals of providing households with a basic level of power at an affordable price. However, a large percentage of households should be able to obtain enough power to meet their highest priority needs - lighting, communication, and entertainment. Refrigeration will be a tougher challenge. Solar home systems (SHS’s) will likely meet the needs of many more African households than mini-grids. For small household loads, they are a cheaper option than mini-grids, particularly pure solar mini-grids, and face few of the regulatory and financial barriers that have stymied mini-grid deployments. Technology developments, such as cheaper battery storage and more efficient appliances, could provide greater advantages to SHS’s. Biomass currently accounts for 90% of household primary energy demand, and there should be significant potential for its greater use for power generation.