Impact Amplifier has just released its report: Energy Provision at the Base of the Pyramid – Are there viable business models to serve South Africa’s low-income communities?
This research paper reviews the decentralised renewable energy business models being used in poor communities, if and how they have been tried in South Africa, and the potential these models have for expansion. As firm believers in the power of the private sector to create lasting, innovative solutions to the challenges confronting the poor, this paper is intended to support entrepreneurs, researchers, public benefit organisations, government and other institutions interested in creating economically sustainable energy solutions at the base of the pyramid.
South Africa’s energy generation, electrical infrastructure and renewable energy provision is extraordinary within the African continent. It produces almost 50% of all the energy generated in Sub-Saharan Africa yet its only 5% of the continent’s population. 85% of its citizens have access to the grid as compared to the average 43% in the rest of Africa. Yet, within this backdrop, 60% of South African rural households have no access to electricity, large sections of low income urban settlements have no access, and over 40% of the households that are connected, are considered energy poor spending upwards of 20% of their monthly income on power. The predominant approach to providing new energy connections has been by extending the existing grid network. In many countries throughout Africa both the public and private sectors have realised that building more centralised energy provision capacity and extending the grid system using non-renewable energy sources is both economically unfeasible and environmentally detrimental. What have emerged as alternatives, are a broad spectrum of decentralised renewable energy models to fill the void.
We decided to conduct this research and release this paper because South Africa has the greatest potential in Sub-Saharan Africa to make energy universally accessible. Realising this potential will only be possible however, if the public sector creates the enabling environment, entrepreneurs enter the market with innovative models, and communities are prepared to adapt to alternative solutions.
The full report can be accessed here.