Imagining a World Beyond the Grid
Off-Grid Solutions are Flexible, Scalable, and Here to Stay
When Power Africa was launched over a decade ago with the goal of doubling energy access in sub-Saharan Africa, it was already clear that national electric grid-based solutions would only be effective for a portion of the region’s unelectrified population. It was evident that thinking “outside the box” — or more accurately, “beyond the grid” — would be necessary. Now, more than ten years later, this has proven truer than anyone could have expected.
In advanced economies, “decentralized” power — electricity generated at distributed locations instead of centralized, utility-scale power plants — has taken off rapidly. In the U.S., for example, 20 percent of the country’s total solar capacity corresponds to residential installations. This segment has grown significantly in recent years, with approximately six gigawatts of residential solar power installed across the United States in 2022 alone.
Meanwhile, in many emerging economies across Africa, this trend has exploded. Over the past two years alone, 65 percent of new solar capacity brought online in Africa has come from smaller-scale installations selling directly to companies who urgently need reliable, affordable electricity to run their businesses. In addition, today, more than 400 million Africans get their electricity from solar home systems, according to industry members
The Vision
The World Bank found that this type of distributed (or decentralized) energy has the potential to become one of the most cost-effective and efficient ways to bring electricity to those who still need energy access due to factors such as distances between communities and population densities. Governments can now carry out “least-cost” analyses of electrification options in their countries, allowing them to decide whether it is more cost-effective to expand access to households and businesses by extending the national grid or through an “off-grid” option. One such study found that by using a mix of grid- and non-grid-based solutions in Kenya, electrification rates could have been 10 percent higher over the past 25 years for the same amount of investment.
In many sub-Saharan African countries the opportunity exists to build the “future grid” now: a combination of national grids, “mini-grids,” standalone solar installations, mobile batteries in electric cars and buses, and more. The insights from Power Africa’s extensive network of partners confirm what many observers have already noted, that the world’s future energy ecosystem will be extremely distributed and that this will be most true in sub-Saharan Africa. Research has shown that regions around the world will take diverse pathways to universal energy access and abundance, from gradual grid improvement solutions in countries like India, to mixed grid evolutions in Nigeria, and decentralized renewable mixes in the Democratic Republic of the Congo.
Where once these off-grid technologies may have been considered as “temporary” solutions until the national grid arrives, they are now widely seen as an end in themselves. In advanced economies like the United States, decentralized residential solar installations or companies that “self-generate” their own energy will likely still be part of a much larger grid-connected system, in which virtually all households and businesses already have access to grid electricity and are able to consume it in large amounts. But the vision of the “future grid” in countries still building out their electricity infrastructure will look different due to advancements in technologies and energy generation and distribution business models.
Currently, in many sub-Saharan Africa markets, even households and businesses that do have an electricity source (whether on- or off-grid) consume comparatively very little electricity, often limited by purchasing power. A criticism of the off-grid sector is that it caters to these lower levels of electricity consumption (for example, energy to power household lighting, phone charging, and a radio), while research has shown that high energy consumption is a prerequisite to widespread economic growth. But in reality, off-grid technology options are available to grow alongside household and business energy needs and purchasing power. Research shows that 50% of customers who have purchased off-grid energy products have already moved up at least one level higher of service since their purchase.
The Impact
The emergence of off-grid energy has the potential to generate a major positive impact across the African continent. In terms of employment alone, decentralized energy companies show promising statistics: in Kenya these firms employ more than six times as many people as the largest utility, and in Nigeria they have created almost as many jobs as the oil and gas industry (50,000 jobs each in both countries, as well as 30,000 in Uganda and 14,000 in Ethiopia).
In terms of quality of life, the impact is clear. From research conducted with over 79,000 off-grid energy customers across a range of technologies (predominantly users of standalone solar home systems, but also including technologies like solar pumps, refrigerators, and larger mini-grids), the results show that over half of all customers reported that the quality of their lives improved significantly as a result of their new-found energy access. Nearly all (93%) experienced at least moderate improvement. Worldwide almost 500 million individuals are using distributed energy technologies that support more than ten million businesses and power hundreds of thousands of smallholder farms. Critically, energy access solutions beyond the grid have the potential to best serve those individuals, businesses, and communities that are most at risk of being left behind in universal electrification efforts. Research has shown that in the most low-income and conflict-affected regions, as much as 89 percent of the population can benefit from off-grid energy.
Looking Forward
The International Energy Agency estimates that decentralized solutions are the least-cost way to electrify 56 percent of those currently seeking electricity access. Power Africa’s goals, like those of its partners, are ambitious, and cannot be achieved through any one technology or type of connection alone. To achieve Power Africa’s goal of bringing reliable, affordable, sustainable electricity to 60 million households and businesses, we will look for ways to continue to scale up our off-grid efforts with our partners. We are pursuing all of the ways in which energy is generated and the ways in which it reaches consumers, whether through national and regional grids, or standalone systems, mini-grids, e-mobility, and more. Off-grid solutions are no longer temporary fixes. Rather they are essential to the present and future energy landscape. We invite others to partner with us to scale our efforts to bring reliable energy access to millions more across the continent.
About the authors:
Richard Nelson is Coordinator for Power Africa, a U.S. Presidential Initiative to double energy access in sub-Saharan Africa. Richard holds a JD from Harvard Law School. Claudia Schwartz is Power Africa’s energy access advisor. Claudia holds a bachelor’s degree magna cum laude from Brown University and a master’s degree with a thesis on private energy infrastructure investment from the Fletcher School at Tufts University.
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