Renewables are getting cheaper but there’s still a huge investment gap. Here’s what our expert panel said in a recent debate on clean energy
At the Paris climate talks last December, governments agreed to work towards limiting global warming to 1.5C above pre-industrial levels. But the topic of financing developing countries to help them adapt to climate change and transition to clean energy became a sticking point during the negotiations.
We recently brought together a panel of experts to debate how developing countries can reach 100% renewables. Here’s what we learned:
Businesses providing these systems are using pay-as-you-go approaches that allow households and businesses to pay a small amount each month. Some allow you to eventually buy and fully own the system; others have a ‘perpetual lease’ where it is somewhat like paying for a utility.
Mobile payment schemes have been critical in driving the roll-out of off-grid solutions. This has enabled more than 300,000 households [across East Africa] to get access to electricity, including about 30% of the Kenyan population, 40,000 in Uganda and 20,000 in Tanzania. These numbers are growing rapidly.
In the most remote and low income communities, mobile networks don’t invest in telecoms infrastructure (it’s not worth it for them) so relying on mobile money to reach these really challenging communities may not be sufficient.
The boom in pay-as-you-go household solar in East Africa is very exciting. But it is all based on credit, and the companies have a view to selling other products like TVs. How big is the risk that boom will turn to bust and push the poorest of the poor into unpayable debt?
Related: Investors’ neglect of small-scale renewables threatens universal energy access
Of course, we are all now looking at providing ‘add-on’ products – fridges, internet access, TVs. It is crucial that we manage the ladder of credit in a very responsible manner
With a few exceptions, we haven’t yet seen the levels of investment from development banks (let alone commercial banks) that other kinds of energy and infrastructure projects get. So it’s still down to niche players like us.