$21 Billion Investment Needed to Unlock Off-Grid Solar’s Potential in Global Energy Access by 2030, Warns New Report

Off-Grid Solar Poised to Connect 398 Million People, but Urgent Action Required to Reach Universal Energy Access, says World Bank and GOGLA Report.

The Off-Grid Solar Market Trends Report (MTR) 2024, published today by the World Bank’s Energy Sector Management Assistance Program (ESMAP) and GOGLA, highlights the critical role off-grid solar (OGS) plays in connecting millions of people to electricity. The report emphasizes that off-grid solar is the most cost-effective solution for 41% of the global population still without energy access, but warns that a six-fold increase in investment—$21 billion—is needed to realize this potential and achieve universal energy access by 2030.

Between 2020 and 2022, off-grid solar was responsible for 55% of the new electricity connections in sub-Saharan Africa, a region where over 80% of the global unelectrified population lives. Despite this progress, the current investment trajectory falls short, leaving an estimated 660 million people without access to electricity by the 2030 deadline set by Sustainable Development Goal (SDG) 7.

“We must rewrite this story,” said Qimiao Fan, the World Bank’s Country Director for Kenya, Rwanda, Somalia, and Uganda. “Providing affordable, clean electricity is essential to lifting people out of poverty and protecting the planet. Through partnerships like the Mission 300 initiative with the African Development Bank (AfDB), we aim to connect 300 million people to electricity across Africa over the next six years. Off-grid solar will be instrumental in reaching households, businesses, schools, and health centers.”

Off-Grid Solar: Resilience and Challenges

The report shows that the off-grid solar sector has demonstrated resilience despite facing difficult macroeconomic conditions, including inflation and currency devaluation. As of 2023, off-grid solar solutions have benefitted over 560 million people, with more than 50 million solar products sold between 2022 and 2023. Market turnover reached $3.9 billion in 2022 and $3.8 billion in 2023, reflecting the sector's ability to navigate financial headwinds.

However, affordability remains a significant barrier to wider adoption. Only 22% of households without electricity can afford a basic Tier 1 solar energy kit through Pay-As-You-Go (PAYG) financing. In conflict-affected regions, where 64% of the unelectrified population resides, the cost of offering PAYG services is 57% higher, making access even more difficult.

“The OGS sector is clearly the most effective way to deliver energy access to 398 million people, but companies, investors, governments, and development partners must work together now to unlock the $21 billion needed to scale the sector and reach those who are hardest to connect,” said Sarah Malm, Executive Director at GOGLA.

Investment and Future Opportunities

The report points out that while investment in the off-grid solar sector reached a high of $1.2 billion between 2022 and 2023, largely driven by debt financing, a massive increase in funding is required to meet global targets. To electrify the 398 million people most efficiently served by off-grid solar, $21 billion is needed. In addition, $74 billion would be required to cover adjacent markets, including solar water pumps, cold storage solutions, and higher-tier solar systems for micro, small, and medium-sized enterprises (MSMEs).

Initiatives such as Mission 300, led by the World Bank and AfDB, aim to electrify 300 million people across Africa, with off-grid solar as a cornerstone of this ambitious goal. The integration of off-grid solar into national electrification and energy transition plans signals a growing recognition of the sector’s role in meeting both energy and climate targets.

Broad Sector Collaboration Needed

The Off-Grid Solar Market Trends Report 2024 underscores the need for collaboration among companies, investors, governments, and development partners to ensure off-grid solar fulfills its potential. With the right investment and support, the sector can have a transformative impact on households, farmers, businesses, and social infrastructure like schools and healthcare facilities.

The report was presented at the Global Off-Grid Solar Forum and Expo in Nairobi, attended by over 1,500 participants, including more than 100 policymakers, investors, and development actors, as well as hundreds of companies from the distributed renewables sector.

“Off-grid solar is not just about energy access—it’s about driving economic growth, improving health outcomes, and enhancing education,” Malm emphasized. “We have the solutions; now, we need the financial commitment to make this vision a reality.”