Throughout the developing world, in places like Haiti, Bangladesh, and Sub-Saharan Africa, 1.3 billion people have no access to electricity and another billion get less than four hours of reliable electricity each day. These people are typically among the world's poorest and most vulnerable, as energy poverty dramatically reduces educational, economic, and health outcomes. The fuels available to off-grid households and businesses – for example kerosene, diesel, and biomass – are typically expensive, dangerous, and dirty, and so often make things worse.
Perhaps surprisingly, modern consumer technologies like mobile phones and televisions are proving to be a driving force in delivering clean, reliable electricity to off-grid populations. Demand for modern consumer electronics is extremely high throughout the developing world—and pre-modern fuels like kerosene simply can't power them. Because they require electricity, mobile phones, televisions and other appliances create and sustain demand for off-grid electric power systems like small-scale solar photovoltaic home systems.
Significant Market Opportunity... For the Right Products
The four billion people worldwide who make less $1,500 USD/year are often referred to as the Base of the Economic Pyramid (BOP). Recent studies estimate that the BOP is a $5 trillion USD/year consumer market—and, just like the rest of us, these people want modern consumer electronics. As technology prices fall, credit markets emerge, and developing world incomes rise, companies meeting this demand are positioned to dominate major growth markets.
But simply manufacturing and marketing products isn't enough. Because off-grid households and businesses are typically extremely poor, purchasing a power system and the appliances that accompany it is a major financial commitment. If the products don't deliver as promised, or fail, or disappoint, the customer's bad experience quickly gets spread by word of mouth and the market for that product, and similar products, is spoiled. Product quality is, therefore, essential to the market's development.
Energy efficiency is also essential in BOP markets. Because they use less electricity, super-efficient appliances need smaller – and more affordable – power systems to operate.
The dynamic of creating demand for power systems, and requiring smaller power systems, means that high-quality, super-efficient off-grid appliances are an extremely powerful energy access tool. Initiatives like the United Nations' Sustainable Energy for All campaign, which targets universal energy access by 2030, the International Finance Corporation's Lighting Global program, and the Clean Energy Ministerial's Global LEAP Awards are coordinating to support global markets for quality-assured, energy-efficient energy access products. These efforts are priming major opportunities to manufacturers and distributors, and transforming the lives of people throughout the developing world.
So What Does This Mean for Your Business?
Product developers, manufacturers, and distributors should investigate – and invest in – the off-grid BOP market. There are hundreds of millions of customers out there just waiting for the right product—companies delivering those products will be big players in a massive, dynamic, growing market, and they'll help some of the world's most desperate and vulnerable people radically improve their lives.
The Global LEAP Awards
If you already make high-quality, energy-efficient appliances, I'd ask that you check out the Global LEAP Awards, which will identify the world's best low-voltage DC appliances and then promoting them to the off-grid market.
Global LEAP Awards Winners and Finalists will benefit from a global publicity campaign and business opportunities with leading off-grid retailers like SELCO, Orb Energy, and Rahimafrooz. Nominating eligible TVs for the Global LEAP Awards is fast, easy, and free—no product samples or testing fees are required unless your product is identified as a Finalist.
Matt Jordan is a Program Manager at CLASP, and is responsible for CLASP's off-grid products portfolio. This includes management of the Global LEAP Awards, a Clean Energy Ministerial initiative to identify and promote the world's best off-grid appliances.
in my opinion,for these underdeveloped population, what we need is power generating devices using the conventional fuels such as kerosene, bio gas or just the wood collected from the forests or may be just the animal waste.
Since solar energy has a high initial cost, the technologies based upon usage of the above naturally available fuels should be the priority for electricity generation in these areas.
Some good old technologies like Sterling engines may be a good alternative.
@Prabhakar, I agree with what you say, it makes economic sense for the people, but look at it long term. that means these populations will be looking at long term use of Kerosene (a fossil fuel) or wood (causing deforestation if not very carefully managed). Bio gas is a good idea, especially for heating / cooking for which solar is impractical) but seems difficult to implement reliably.
Solar power on the other hand is a high initial investment but very low running cost. So let governments subsidise or loan the initial cost (which, let's face it, is only a few hundred dollars for something that will light a few rooms and maybe run a TV). It means, for rural populations, that they (the govts) will not have the expense of running mains electricity to these populations - this is often a sizeable expense due to distances involved.
I think schemes like this have been implemented in some places - anyone else got any info?
As we unveil EE Times’ 2015 Silicon 60 list, journalist & Silicon 60 researcher Peter Clarke hosts a conversation on startups in the electronics industry. Panelists Dan Armbrust (investment firm Silicon Catalyst), Andrew Kau (venture capital firm Walden International), and Stan Boland (successful serial entrepreneur, former CEO of Neul, Icera) join in the live debate.