Harnessing solar energy bridges energy access gaps for Africa’s future

By Chipo Maziva

Analysis in brief: Africa holds the greatest potential for solar energy, yet this enormous potential remains largely untapped. Solar energy represents a unique transformational opportunity that can provide reliable, affordable and sustainable electricity supply and improve economic prospects and the quality of life for all Africans. To this end, Africa needs to reconsider its approach through credible action and accountability in the use of its abundant indigenous energy resources.

Africa’s crippling electricity problem

As Africa’s economy continues to expand, access to sustainable and affordable energy is becoming increasingly essential for supporting robust economic growth and improving the livelihoods of all Africans. In 2021, an estimated 600 million Africans did not have access to electricity. Compared to the rest of the world, Africa generates only 4% of the global energy. Despite the tremendous potential that Africa’s energy sector holds, private sector investment in energy infrastructure and service delivery remains minimal.

Power outages disrupt households and businesses for hours, if not days. In particular, Zimbabwe is experiencing an unprecedented electricity crisis, with up to 20 hours of load shedding a day, due to old equipment at power stations, lower water levels at the country’s main hydropower plant at Kariba Dam and corruption. Similarly the country’s neighbour, South Africa, is enduring prolonged daily power cuts owing to a history of corruption, mismanagement of resources and poor planning. Moreover, the state utility Eskom is hampered by debt, endemic misconduct and sabotage, hindering its ability to meet the nation’s rising energy demand. The failure to modernise the nation’s aging coal plants contributes to the power crisis. Nigeria’s national grid is underpinned with chronic instability, exemplified by the February 2024 national grid collapse, the latest in a series of similar incidents, resulting in widespread blackouts that disrupted homes, businesses and essential services. These stark realities underscore a critical need for credible action and accountability to ensure equitable access to power across various African states.

Inside the Tutuka Power Station in Standerton, Mpumalanga, Eskom’s worst-performing plant
Image courtesy: Deon Raath/Rapport/Gallo

The implications of social vulnerability due to prolonged power outages

The provision of electricity is a critical step in expanding people’s opportunities and choices. Access, coupled with increased economic activity and the betterment of livelihoods, is an investment in a country’s potential. In the context of persistent inflation, a lack of reliable and cost-effective energy sources tends to hinder industrial expansion and production opportunities, having a detrimental impact on employment, food security and health services, among others. As the COVID-19 pandemic has demonstrated, restricted energy supply hinders hospital and emergency services, puts patients at risk and spoils valuable pharmaceuticals. The power outages plaguing the Sub-Saharan African region have also caused staple food shortages, fuelling inflation and potentially pushing basic goods beyond the reach of impoverished households. This highlights the need to invest in alternative energy, such as solar energy, to sustain the livelihoods of all Africans. While the economic ramifications of prolonged power cuts on local economies are undeniable, the ensuing human catastrophe triggered by the failure of essential services can far outweigh any financial losses.

The transformative power of off-grid solar energy in expanding Africa’s electrification

Africa is endowed with significant indigenous energy sources, with solar being one of them. Despite presenting major investment opportunities, this alternative energy source remains heavily underutilised. Given the ongoing electricity crisis and the parallel increasing costs of generating the same electricity, solar energy is a potential solution to powering the continent efficiently and could enhance the lives of Africans currently without access to electricity. A solar system operating independently from a national electricity grid, produces energy from the sun’s rays during the day, storing it in batteries, so it is not affected by grid failures or shutdowns. At present, decentralised solar systems are contributing immensely to electricity generation in places where grid or mini-grid connections are neither economically nor technically feasible or in towns and cities where power outages are frequent.

Data source: World Bank, based on data from Lighting Global/ESMAP, GOGLA, Efficiency for Access, Open Capital Advisors
(2022), Off-Grid Solar Market Trends Report 2022: State of the Sector

The failure of national power grids across Africa has seen an increase in the market for solar installations. Estimated at US$1.75 billion annually, decentralised solar is generating long-term investments. South Africa leads the surge in imports of Chinese solar panels to Africa, doubling its intake with a 187% increase, from 2022 to 2023. As more homes and businesses shift to solar, capacity is projected to pave the way for a future less reliant on fossil fuels. Notably, South Africa’s leading solar player Scatec recently launched the world’s largest solar battery, promising to bring relief to a nation plagued with electricity woes as it has recently begun feeding power to the national grid.

Notably, high initial costs for solar energy production present a challenge to low-and medium-income households but also an opportunity for alternative-energy companies to address the electricity crisis innovatively and sustainably. Companies like ENGIE, Azuri Technologies and Lumos Global are capitalising on mobile money and pay-as-you-go solutions to provide sustainable and affordable solar electricity. ENGIE empowers over nine million lives with microloans as low as US$0.19 per day, allowing clients to spread the costs of solar systems over time. Similarly, Lumos Global, an off-grid solar provider operating in Nigeria is also leveraging the nexus between the mobile revolution and solar energy. Lumos offers a game changer: patented, self-deployable home solar systems for less than US$15 per month. This offer excludes setup and significantly cuts costs compared to the US$70 monthly expense households face with generator fuel. Azuri is another pioneer of pay-as-you-go solar, with over 200,000 solar systems sold across Kenya, Nigeria, Tanzania, Uganda and Zambia. These examples demonstrate how innovative financing bridges the affordability gap between high upfront costs and the long-term benefits of solar energy, ultimately empowering lives with access to reliable energy.

The African energy sector is expected to witness accelerated innovation in 2024. The solar energy industry in particular, is likely to witness a trend in consolidation as large players will potentially merge or acquire smaller players to achieve economies of scale, increase market share and foster further innovation. However, the focus should remain on affordability and sustainable impact.

Solar power offers a decentralised solution to the energy crisis. In essence, effectively expanding electricity access to the 600 million Africans currently living without, necessitates infrastructure development, the establishment of an attractive investment environment through sound legal frameworks and achieving end-user affordability. This also requires the collaboration of multiple governments and partners.

The critical points:

  • The persistent limitations of Africa’s national grids create a significant opportunity for decentralised solar solutions to provide access to reliable and clean energy, particularly in underserved areas
  • The market for off-grid solar installations is fast expanding, fuelled by mobile banking and affordable financing solutions that enable households to lease solar panels on a pay-as-you-go basis
  • With approximately 600 million Africans lacking access to electricity, alternative-energy companies have the opportunity to fill this gap innovatively and sustainably