Development bank support is gradually allowing specialist solar-plus-storage companies to target a market with 1.2 billion customers.
Cost-effective advanced battery technology is helping solar companies tap into the rural electrification market, which covers 18% of the world’s population. One start-up, Hong Kong-based Plug the Sun, is aiming to install 25,000 rural electrification systems over the next year within two projects alone.
The company will be selling the systems for USD$600 each, which includes Chinese-made solar panels and batteries plus power systems, cabling, lights and more. The systems typically provide between 1 kWh and 5 kWh of energy, said Walter Marin, CEO of Plug the Sun, a joint venture by technical services provider Enerray and Fast Power.
This puts Plug the Sun’s offering at the top end of rural electrification systems, which may cost as little as $50 to $100 and deliver just 50 W to 300 W. The higher specification makes sense for rural electrification programs seeking to provide more than simple lighting, though.
Plug the Sun aims to provide advanced lead or lithium-ion batteries that can store enough solar energy to power appliances ranging from TVs to fridges. In the past, Fast Power has even used similar setups to school computer rooms in sub-Saharan Africa and Myanmar.
Today sub-Saharan Africa is ground zero for rural electrification: 95% of the 1.2 billion people worldwide who do not have grid access live there or in the developing countries of Asia. Solar power is bringing hope to many of these communities. According to Electricity Beyond the Grid, a report by the accountancy firm PwC: “Falling costs have led to solar playing a centre-stage role in providing many households with a first rung on the energy ladder.”
Finding funding for rural electrification programs remains a challenge, however. Walter Marin said the two projects Plug the Sun is working on, in Argentina and the Philippines, respectively, are only possible thanks to World Bank funding. A third project has stalled due to lack of finance. Rural electrification “goes to the bottom of the pyramid” in terms of investor interest and appetite, said Walter Marin.
There are signs this may be changing, however. In March, for instance, investors joined the Alliance for Rural Electrification, Energias de Portugal and the Africa-EU Renewable Energy Cooperation Program to investigate ways supporting off-grid energy programs.
Even so, the World Bank believes current progress is not rapid enough to meet a global energy goal of 100% electrification by 2030. That is why the involvement of dedicated players such as Plug the Sun is key. While for now Plug the Sun is mostly aiming to meet demand from tenders by the World Bank and other development bodies, in time it is hoped that moves towards rural electrification will unlock private finance as well.
When that happens, said Walter Marin, his company will be waiting with a solid knowledge of the market and a product that has been tried and tested in the field. “We want to share our vision of providing energy access to all people by 2030,” he commented.