REACT Household Solar Funding: Transforming rural households with off- grid solar power solutions

With the AECF REACT Household Solar (HS) competition now closed we expect the companies selected will revolutionise the solar industry in Malawi, Zambia, Zimbabwe and Sierra Leone respectively as well as stimulate access to solar home systems by rural households in the region.

Like the rest of Africa, the target countries, face a rapidly increasing energy demand due to a range of demographic, socio-economic and resource related factors.

Most rural populations, the fastest growing segment of the regional population, have no access to electricity and will not get grid access in the foreseeable future, resulting in a steady increase in the number of people without electricity until at least 2025.

Slow access to electricity is a great constraint to human development. In Zambia the current power generation capacity does not meet the demand from urban areas thus contributing to the limited supply in rural areas, and high costs for grid extension to remoter areas of the country. The provision of electricity services is skewed greatly towards higher-income households and urban areas, leaving out a large proportion of the target population. In addition to efforts by the Beyond the Grid Fund for Zambia (BGFZ) which is also tailored to improve access to reliable renewable energy by rural communities, REACT HS Funding is expected to realize a greater extension of off-grid power to rural communities, not only in Zambia but also in other countries in the Southern Africa region.

In Zimbabwe, demand-side barriers have contributed to low electrification rates as many rural households that live close to existing grid networks still have no power. This questions their ability to connect to, or afford grid electricity. Hence, middle and low-income populations miss the opportunity to improve their living standards with access to affordable and reliable electricity. REACT is seeking to increase penetration of off-grid solar power to rural areas in Zimbabwe with the most needed funding for private sector companies to provide affordable solar systems to households.

On a wider scope, the economic, social and policy rationales justify investment in renewable energy for Africa – more so for the provision of solar power. Providing clean energy to households will reduce the binding constraint to growth that a lack of power represents in rural areas. Alternatives to grid power are essential to promote economic activity and to raise productivity at the household level and for small businesses. This is particularly true for women and children as a means to diversify income, health and improve education outcomes.

REACT HS Funding will catalyse private sector participation to increase the supply of solar systems and raise awareness of the dangers of indoor air pollution caused by conventional energy sources. Providing low cost, clean energy will help improve the lives of the poor as their children will be able to read, write and study using cost effective lighting, as well as powering other household equipment. REACT HS Funding is tailored to support activities that demonstrate how new knowledge in solar technologies can be put into practice in ways that benefit the poor, especially women.

Women remain under-served and under-represented within various off-grid power supply value chains. Notably, only 20% of the modern, renewable energy workforce is made up of women. Structured distribution of household solar power products will create job opportunities for both the youth and women.

Women entrepreneurs have enormous potential to create distribution and servicing networks in rural areas due to their proximity to their customers, thus lowering customer acquisition costs and credit repayment risks. Access to household owned solar systems will increase women’s long-term material endowments.

Overall, we expect that 300,000 rural people will benefit from the distribution of high quality and affordable home solar lighting systems in Sierra Leone, Malawi, Zimbabwe and Zambia.