The second part of the ‘Off-Grid Solar Market Trends Report 2022’, published on October 19 at the Global Off-Grid Solar Forum and Expo in Rwanda, has projected that 624-million people will be electrified by off-grid solar solutions by 2030.

The report is the result of a collaboration between the World Bank's Lighting Global, the International Finance Corporation (IFC), the Global Off-Grid Lighting Association (Gogla), the Efficiency for Access Coalition and Open Capital Advisors.

In addition to people gaining first-time access to modern electricity, millions of households in weak grid areas are also expected to benefit from off-grid solutions and productive use technologies.

Under this scenario, the off-grid solar sector is expected to grow by 5% a year and receive $7.8-billion in investment. However, the projected access scenario is dependent on continued industry support through interventions such as positive fiscal policy, grants and subsidies.

Depending on the development of a range of factors, the industry could grow faster, at 7.2% a year or slower at 2.8% a year.

Despite significant electrification gains through off-grid solar in the projected access scenario, without “game changers”, universal access will not be achieved, with about 526-million people remaining unelectrified in 2030 under the projected access scenario, the majority of whom are located in nascent and emerging markets.

Universal access is a core pillar of the United Nations’ seventh Sustainable Development Goal (SDG7).

“It is essential that we act to accelerate off-grid solar access – particularly in difficult to serve markets where it is needed most, so that the most vulnerable people on the planet can shield themselves against ongoing and future shocks,” World Bank energy sector management assistance programme manager Gabriela Elizondo Azuela said.

Without game changers, the projected investment is also $15.5-billion short of the amount needed to reach SDG7 electrification targets. Of the total investment required to achieve SDG7, $4.5-billion is needed to subsidise access by poor and vulnerable households.

Even greater amounts of investment are needed to reach the 569-million and 192-million smallholder farmers who could benefit from off-grid cold storage and solar water pumps, respectively, in India and sub-Saharan Africa between now and 2030.

The report showed that off-grid solutions will be critical in supporting education and healthcare by providing cost-effective electrification for schools and health centres, and by helping provide cold storage for critical health supplies such as vaccines.

“The IFC is working to leverage investment resources and support local financial institutions to provide the necessary local currency debt into the sector, while piloting and helping to scale new financial instruments that will attract mainstream investors to the sector.

“We need to unlock these game-changing financial models to close the projected $15.5-billion financing gap and enable the commercial market to accelerate the pace of access and deliver SDG7 electrification targets,” said Financial Institutions Group global climate finance head Peter Cashion.

Game changers, such as greater availability of pay-as-you-go consumer financing, strategic investor engagement, diversified business models, and an increase in subsidies and concessional finance are needed to ensure that off-grid solar companies can accelerate the pace of electrification and help meet SDG7 targets.

“The sector remained resilient, thanks to record capital inflows of $457-million in 2021, but it still means we stand to miss SDG7 by 516-million people if we don’t act decisively and urgently.

“This year's Market Trends Outlook Report recommends a number of game changers that require a combination of innovation, financing and policy change. We must act now and act collectively, recognising the critical link between energy access and climate change mitigation and the importance of public-private collaboration,” investment consultancy Open Capital Advisors co-founder Andreas Zeller said.

Gogla policy and regional strategy head Patrick Tonui added that the Off-Grid Solar Market Trends Report shows that – on the current trajectory – the most vulnerable people will be left behind.

“Yet it also lays out the game changers needed to adjust our course and reach universal electrification targets by 2030. We must work together to do this, and achieve a cleaner and more equitable clean energy transition for all,” he said.