As solar falls in price, innovators see opportunities to create off-grid energy solutions for the millions without access to power. Entrepreneurs have identified ways to leverage these technologies to build businesses addressing energy access in emerging markets. This week’s articles take a look into recent developments in the market. Why solar costs will fall another 40% in just two years by Giles Parkinson on Renew Economy The World Energy Future Conference took place in Abu Dhabi from January 19th to January 22nd. One of the big themes was the idea that alternative energy technologies like solar and wind power are no longer more expensive than traditional fossil fuels; in many parts of the world they are cheaper. Dr. Adaba Sultan Ahmed al Jabber, the minister of state of the United Arab Emirates, suggests that the cost of solar is competing with traditional sources of energy and will not be derailed by the drop in oil prices. Further, this opportunity can be the basis of a call to action for the removal of fossil fuel subsidies. In the same week, the International Renewable Energy Agency (IREA) predicted that solar costs would fall substantially in coming years based on its report, IREA concluded that solar photovoltaic (PV) is leading the cost decline for renewables followed by biomass, hydropower, geothermal and onshore wind which are all now competitive with or cheaper than traditional fossil fuels. What does this mean for the future prices? Vishal Shah, analyst for Deutsche Bank, predicts that there will be another 40% cut in solar costs by the end of 2017. Shah predicts that reduction in processing, installation, and sales/customer acquisition costs will be the main drivers for overall solar cost reduction in the next two years. Africa’s new breed of solar energy entrepreneurs by Tom Jackson on BBC News The International Energy Agency (IEA) estimates that 585 million people in sub-Saharan Africa lack access to electricity. The problem is particularly acute in East Africa where only 23% of Kenyans, 11% of Rwandans, and 14% of Tanzanians have access to electricity. Population growth has kept electrification rates steady despite efforts to expand the grid. Today, a number of companies and organizations on the continent, such as our portfolio company EGG-energy in Tanzania, have identified solar as the solution. A new breed of “solar-preneurs” is emerging, and they are simultaneously increasing access to electricity and generating revenues. East African governments are beginning to recognize the potential for solar and are offering support to the industry to help increase access. These “solar-preneurs” are leading the way in off-grid solutions for universal energy access. Off-grid solar firms should focus on customer experience, not just energy access by Daniel Tomlinson on Greentech Media Daniel Tomlinson, co-founder of Frontier Markets, a distribution company aiming to bring scalable clean energy access to last-mile markets, believes that in order to attract real venture capital investment, off-grid startups must think more like tech firms. This means providing seamless services to customers who are some of the most-price sensitive and difficult-to-reach consumers on the planet. “It means brining Apple-level service delivery to those who don’t even have working toilets,” says Tomlinson. Achieving this will mean focusing on what has driven success in consumer electronics: value, quality, access, seamless use, and cheap financing. Think “energy-as-a-service.” According to Tomlinson, the biggest hurdles will be financing and finding ways to understand customers’ wants in order to build successful services. The companies who are able to focus on high-quality customer experiences rather than just basic energy access will be most competitive in serving emerging markets. New Here?
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