Expanded access to solar power in Africa can boost economic development – ​​but there are risks

United Nations Sustainable Development Goal 7 aspires to ensure access to affordable, reliable, sustainable and modern energy for all by 2030. But in Africa, about 600 million people continue to live without access to electricity. Seeking to reach as many of these people as quickly as possible, African governments are signing deals with foreign companies to provide off-grid solar products to millions of homes.

The British company Bboxx, for example, has a OK with the government of the Democratic Republic of Congo to provide solar home systems (SHS) to 10 million citizens by 2024. SHS consist of one or more panels, usually installed on the roofs of houses, capable of providing up to at 300 watts of power. This is enough to power laptops, televisions, LED lights and, in some models, refrigerators and the kitchen.

This process is based on the belief that expanded access to off-grid solar energy can drive economic development by boosting household incomes. According to the African Energy Commission, the process “raise hundreds of millions of people” out of poverty.

Do these claims stand up to questioning?

Increased income, increased risk

In a recent study, Patrick Lehmann-Grube, independent researcher, and I reviewed 56 papers on the impact of access to off-grid solar energy on household incomes in Africa. Initially, the available evidence appears to provide strong support, with almost all articles finding a positive effect.

This was largely based on the discovery that SHS allowed local stalls and kiosks to stay open longer by operating beyond dark. The testimony of a Kenyan fruit and vegetable vendor is typical. After adding an SHS, she said she could add “an additional two hours of trading each day.” In all studies, working extra hours increased household income by around US$20-40 (£17-33) per month.

Greater capacity for worker self-exploitation

Existing studies generally cite longer working hours as a marker of economic progress. However, this finding is ambiguous since the increase in income here requires a greater capacity for self-exploitation. Given the physical limits to the length of a working day, these observed increases can only lead to limited economic gain.

For economic development to be strengthened and sustained, it must be part of a process of increasing productivity. This should be achieved by an increase in output per unit of labor time – not simply through people working more hours or more people working – and supported by capital accumulation.

Existing studies tend not to focus on these dimensions, leaving the true economically transformative nature of off-grid solar products unclear. The low energy capacity of SHS should nevertheless caution against any great enthusiasm that they can generate such transformative economic progress.

Short-term gains, long-term losses?

The shift of energy supply through SHS away from centralized public governance to a privatized model has also, in many cases, shifted the financial burden of maintenance onto local communities. Several studies have noted that maintenance costs for off-grid solar products often exceed what rural households and communities can afford.

Yet most studies focus on short-term impact, typically within two years of a household or business gaining access to off-grid solar power. However, short-term income gains will prove to be wasted in the future if communities are unable to maintain the equipment.

Several studies have also documented the recent introduction of a pay-as-you-go model. The model aims to extend low-power solar products to low-income rural African households, who are often unable to afford the full upfront cost. Already, pay-solar companies are starting to push a range of other products to their customers, such as irrigation pumps and equipment rental.

This gives another note of concern, because studies on financial technology (or fin-tech) services have demonstrated their frequent association with rising indebtedness. Debt constrains rather than frees households, a process not conducive to economic development.

Solar mini-grids are capable of powering entire rural communities or urban suburbs.
Sebastien Noethlichs/Shutterstock

Can off-grid solar still drive economic development?

One solution to the limited economic impact of increased access to SHS would be to focus on providing mini-grids. Capable of powering entire rural communities or urban suburbs, to research demonstrates that they support a much wider range of activities, extending to productive and industrial use.

Another path will be to develop the national capacity for the design and manufacture of off-grid solar energy. This has the potential to generate productive employment and help stimulate a change towards industrial development.

Here, Kenya was a forerunner through the selective use of a strategic industrial policy. Many other countries, such as Nigeria, Ethiopia, Tanzania and Rwandaseek to follow suit.

Existing studies have proven adept at identifying households that appear to have benefited financially from access to off-grid solar energy through increased income. But they were less attentive to the disadvantages.

In addition to growing indebtedness, these include the more general processes of polarization, marginalization and exclusion that inevitably accompany any process of capitalist economic development.

If, like the Brazilian economist Celso Furtado wrote oncecapitalist development is “an accumulation-based process of reshaping social relations,” future research would do well to focus on how social relations are reshaped by off-grid solar expansion – and with what consequences.

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