SolarAid Partnerships Manager, Charlie Miller (pictured), has published a piece on the role aid agencies should play in meeting the energy needs of off-grid communities.
He believes that there are two main objectives agencies should focus on in order to foster the necessary conditions for an effective and sustainable solar market to develop.
Results-Based Financing to Build the Market from the Bottom Up
Charlie sees results-based financing as an effective way of ensuring more organisations enter the market. With results-based financing the risk is transferred on to the agent rather than the agency. With fewer risks, aid agencies are more likely to sanction projects.
He points to the necessity of continuing with the SolarAid model of ensuring the availability of small, hand-held devices (like that pictured) which establish trust in solar products and act as a first step on an ‘energy escalator’, providing the necessary savings to afford bigger and better solar devices.
Charlie believes that it is crucial the most affordable products are made available first, ensuring energy access for low income families. He believes that distorting the market with mid-range, more expensive products would prove counter-productive.
Strengthen Industry Voice and Policy Influence
Charlie points to a number of obstacles still hindering solar markets in many African counties, most notably high VAT tariffs – in some countries as high as 50%. He believes that organisations should concentrate on lobbying governments to alleviate this burden. They must set-up associations, alliances and forums to publicise the benefits of solar to off-grid communities and encourage further investment in the market.
Click the link below to read the full paper and tweet @SolarAid if you have any further thoughts on how to help develop market channels for off-grid communities.