I was in Nairobi last week for the launch of the Africa hub of the STEPS Global Consortium. During the three day event, I learned a great deal about developments in low carbon energy from across the continent.
Reflecting on last week’s launch, I’ve felt a growing sense of excitement at the different forms of innovation that are simultaneously contributing to the global challenge of sustainable energy for all. The impact of low-cost photovoltaics (PV) exports from China are well known, but the ways in which they are combining with new business models from countries like Kenya deserve greater attention.
Most of my work on low carbon energy has been conducted in China, where colleagues Frauke Urban and Sam Geall have documented the of the country’s solar sector as part of our project ‘Low Carbon Innovation in China: Prospects, Politics and Practice’ (pdf).
China commonly exports more than 90% of the panels it produces. Low cost solar PV is making serious inroads into Africa. Chinese enterprises were the top investors in African solar power as far back as 2011. These levels of interest continue to grow, especially as countries outside Africa try to prevent China ‘dumping’ solar PV on their markets, as recently discussed in a great podcast from the China Africa project.
One of the major differences of the African market is the proportion of off-grid installations – necessary due to the high cost of grid extension to rural areas. Solar home systems and other off-grid technologies are likely to meet around 70 per cent of Africa’s sustainable energy needs.
Off-grid systems require users to pay the upfront costs of hardware that (in centralised systems) is often borne by the private sector and large scale loans. On top of struggling to afford the outlay for a solar PV system, users may have less access to credit, making the solar home systems even less accessible in poorer communities. This has led to a number of innovations pioneering a combination of ‘pay as you go’ (PAYG) and ‘hire-purchase’ business models that attempt to cater to the African off-grid solar home system market.
Among the most well-known of these are MKOPA (active in Kenya), Azuri (in Ghana) and Mobisol (Tanzania and Rwanda). Some of these developments have already been studied by my colleagues Paula Rolffs, David Ockwell and Rob Byrne (pdf). Especially interesting is the ways in which these models combine with the raft of innovations emerging from the mobile money boom in Kenya.
A recent STEPS Centre project, seed-funded through the International Social Science Council, has enabled the STEPS Centre to bridge these two nodes in the ‘trans-national innovation system’ around pro-poor solar PV. Last year our partners at Beijing Normal University held a on ‘low carbon energy transitions that serve the needs of the poor’, raising questions about the role of solar PV for poorer rural communities in China. The new financing models mentioned above were also highlighted in a seed-funded event that was held last year in Kenya. Both of these events led to the production of concept notes, available on the project webpage.
Whilst all the countries involved face very different challenges at the domestic level, the novel recombination of different kinds of innovation from various localities presents opportunities for much wider contributions to the global challenge of ‘sustainable energy for all’. The launch of these two hubs in the STEPS global consortium presents the exciting possibility of further conversations bringing together researchers and other stakeholders from China and Africa, with this shared goal in mind.