Global off-grid solar market report reveals buoyant market despite dip in sales
AA – GOGLA and Lighting Global have launch of the latest Global Off-Grid Solar Semi-Annual Market Report. The report, which covers January to June 2017, includes performance data from 65 companies. Despite a 7% drop in worldwide sales volumes of off-grid solar products since the last report, there remains a buoyant market in which companies are taking an optimistic approach.
Several market drivers have been identified as having a significant influence on the report findings. They include a drought in East Africa, demonetization in India, and increasing commodification in smaller product categories, increasing the amount of poor quality and copycat products. According to the International Energy Agency, the sector needs to grow significantly in order to meet universal energy access targets by 2030—on the order of an additional 195 million people. To realize this goal, critical barriers to growth need to be addressed. However, players within the sector continue to hold a positive outlook. Companies are expanding into new markets, and innovating with different government partnerships that are enabling further expansion.
“The data demonstrates that companies in this sector are operating in difficult and often unpredictable market conditions,” explains Koen Peters, Executive Director of GOGLA. He continues by saying: “As the association representing the sector, we see an increasingly urgent need to work with governments, investors, and other stakeholders to accelerate the development of the off-grid sector. With the right partnerships and a supportive policy environment in place this sector can thrive, and deliver on its role to help meet the 2030 universal energy access target.”
One of the companies to contribute to the latest report is d.light. Its CEO and co-founder Ned Tozun explains there is much to be positive about: “Despite the sector hitting some turbulence recently, we remain very positive about the shape and future of this industry. We’re still in the very early days of the sector, with vast untapped potential in terms of market penetration”
What are the key figures?
- 3.52 million product sales were reported in the first half of 2017.
- Sub-Saharan Africa and South Asia account for approximately 1.77 million (50%) and 1.16 million (33%) of the total reported sales, respectively, with India remaining the highest volume sales market globally.
- 30.7 million products have been sold by Lighting Global associates and GOGLA members since 2010.
What factors are influencing the market?
- The drought across East Africa has continued to impact the region.
- Demonetization that occurred in India in November 2016 continued to negatively impact sales in the largely cash-based Indian economy.
- Commodification of the market for entry-level products has increased competition in the sector from copycat and unbranded, unreported product sales.
What are the estimated social impact findings?
- $5.2 billion has been saved in energy-related spending by off-grid households (due to switching from expensive energy sources such as kerosene).
- Over 120 million people have benefitted from improved energy access due to off-grid solar products.
- Cumulatively, 28.6 million metric tons of CO2 equivalent has been avoided due to a reduction in kerosene use, equal to taking eight coal-fired power plants offline for a year
Following today’s report, the next biennial Global Off-Grid Solar Market Trends flagship report will be published by Lighting Global and GOGLA in early 2018, taking a deep dive into the off-grid solar sector worldwide. The report will look at investment trends, advances in technology, marketing, finance, and policy developments, as well as the nuances of the social impact made by the industry; altogether building an even deeper understanding of the market.
Both reports will be discussed in depth at the up-coming 2018 Global Off-Grid Solar Forum and Expo, co-hosted by Lighting Global and GOGLA and taking place from January 22-24 in Hong Kong. As Russell Sturm, Global Head for Energy Access at IFC notes, “This is the first time that the biennial event, which started in 2007, will take place in East Asia—acknowledging the growing and critical role Asia plays in the development of the off-grid solar market worldwide. As the essential meeting place for the sector, the Forum and Expo is the place where the industry holds its seminal conversations, and the pivot point for the next two years of the market’s development.“
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