ew of Off-Grid Trends and mmatic Support Leo Blyth January 2018 Lighting Global Program

ew of Off-Grid Trends and mmatic Support Leo Blyth January 2018 Lighting Global Program

Some 600 million people in Sub-Saharan Africa remain unelectrified (and growing), while slightly decreasing in Asia. The problem AND opportunity are structural and here to stay Bubble size represents the absolute size of un-electrified population

Convergence of technical innovations Gap in business models & human resources Energy Appliances Finance Connectivity

Off-Grid Market Projections

Market Summary Over 130 million devices sold since 2010 ~17% penetration of the global potential market Total revenue of over USD 3.9 billion Emergence of 3 product categories pico, plug-and-play SHS, and component-based systems Increasing interest and commitment from investors, with over USD 900 million raised to date

Catalyzing market development Framework Lighting Global operates along the market transformation curve, focusing on specific market support/development activities along the supply chain Market introduction stage Market growth stage Maturity Self sustaining Market *20-25% Inflection point Technology/business model advancement Advisory services Investment MARKET INTELLIGENCE CONSUMER EDUCATION QUALITY ASSURANCE SUSTAINABILITY BUSS DEV SUPPORT WORKING CAPITAL DEBT FINANCING IFC INVESTMENT Addressing regulatory constraints * The objective of a market transformation program is to reach a 20 25% market penetration which is the inflection point at which the market gathers its own momentum and on a path towards sustainability 6

Lighting Global Opening up markets through a commercial model approach The overall approach of the program is to accelerate the development of off-grid lighting markets by: 1. Demonstrating the viability of the market to companies and investors through market intelligence on various aspects of the market and on base of the pyramid business models and distribution channels to inform decision making. 2. Improving the enabling environment for the sector by developing a quality standards, addressing regulatory policies that may impede the sector, and facilitating business to business interactions through conferences, workshops and a dedicated web-platform. 3. Supporting the scale up and replication of successful businesses by providing targeted business development services to the private sector and facilitating access to finance.

THANK YOU! Please contact us for further information Lighting Global (IFC/ESMAP) booths A6/7 www.lighting global.org bds@lightingglobal.org

Off-grid pico-pv lighting products have rapidly become a lot more affordable 2009 - CFL and lead acid battery 2009 - LED and lead acid battery 2012 - LED and NiMH battery Light Source Battery PV Balance of System 2014 - LED and Lithium battery 2017 projection - LED and Lithium battery 60% decline in five years Source: Schatz Energy Research Center $0 $10 $20 $30 $40 $50 Retail Price by Component (US$) 9

$0 $200 $400 $600 $800 $1,000 $1,200 and so too have Solar Home Systems. Lights Battery PV Balance of System Appliances 2009 - SHS with standard appliances 2014 - SHS with standard appliances 2014 - SHS with super-efficient appliances 2017 projection SHS with super-efficient appliances 60% decline in five years Retail Price by Component (US$) Source: Schatz Energy Research Center 10

TBD 1 THE ENERGY LADDER COMPANION 2 THE BANKER 3 THE FAST FOLLOWER 4 THE VALUE CHAIN SPECIALIST

Programmatic Response Lighting Global works on multiple levels to scale up clean energy Activities & Examples Firm Provide B2B linkages Outcome: enhance business opportunities to facilitate rapid scale up Provide dedicated business development support to companies. Outcome: Enhance the business development and marketing strategies for companies and overall success of their market entry and expansion Sector Provide market intelligence. Outcome: Companies design products & business models that are appropriate for the BOP in Africa and enhance decision making process Capacity building. Outcome: working with MFI to enhance their capacity to understand this new market segments and to finance the last mile distribution/supply chain to deepen distribution. Mobilization of commercial and concessional financing, Outcome: Attract additional players in the market due to availability of financing facilities for scale up Standards & Practices Develop product quality standards : Outcome provide a platform that provides confidence to investors to mobilize investments & mitigate market spoilage. Market check testing: setting up testing facilities in selected countries in Africa to enhance capacity of standards bureaus to undertake surveillance and address influx of low quality products Policy & Awareness Policy: adoption of Lighting Global/IEC quality standards in Africa Develop national consumer education and communication programs. Outcome: Platform for developing demand and awareness and adoption of new products/ addressing high first mover costs 12

= $600/ year

Extra $600/year Extra $1,387/year Extra $6,000/year

Source: Ministry of Water and Irrigation, Nairobi Office

What s needed to reach scale? Regionally-specific needs assessment / market segmentahon Market educahon & teshng standards PaHent R&D money

An Introduction to Off-Grid Appliances Off-Grid Solar and Appliance Industry Networking Event Jeff Stottlemyer CLASP 24 January 2018

What Is An Off-Grid Appliance? Refrigerators Ceiling, Pedestal & Table Fans TVs and more! 2

Global Off-Grid Appliance Market Potential 3

Super-Efficient Appliances Enable Off-Grid Energy Systems to Provide More Service 4

Super-Efficient Appliances Reduce the Cost of Off-Grid Energy 5

Super-Efficient Appliances Reduce the Cost of Off-Grid Energy (Cont.) Solar Home System (SHS) Purchase Price (2016 data) 6

Appliances Spark a Virtuous Circle in Clean Energy Access Markets 2 Increasing demand for energy services More households demand energy to power improved, high-quality, off-grid appliances 1 Improvements in performance & availability of appliances Scaling market improves affordability, efficiencies, and value for money, making appliances more accessible 3 Energy access markets scale up Heightened demand for energy helps offgrid businesses diversify revenue streams and scale, improving sector economics 4 4 Increasing demand for appliances More households demand appliances to take advantage of improving energy access ecosystem. Source: Global LEAP. The State of the Global Off-Grid Appliance Market. 2016. 7

Resource Snapshot: Global LEAP Awards for Outstanding Off-Grid Appliances 2013-14 (33 nominations) 2015-16 (53 nominations) 2016-17 (128 nominations) 8

2017 2016 RESOURCE SNAPSHOT: GLOBAL LEAP OFF-GRID APPLIANCE PROCUREMENT INCENTIVES 5 companies 12,000 televisions Bangladesh 27 companies 60,405 televisions + 225,825 fans Bangladesh, Kenya, Tanzania, Rwanda, Uganda 9

Q&A Thank you! If you have additional questions or need any other information, contact us at any time. jstottlemyer@clasp.ngo info@globalleap.org GlobalLEAP.org @GlobalLEAPaward 10