Wesseler: What would it take to close this gap?

Wakoli: Well, we need more investment at all levels of solar appliances. We need to invest in people who can support the sector: students, researchers, manufacturers, distributors, maintenance people. Companies need money to build these appliances, to test business models, to scale. We also need money for governments to conduct awareness campaigns. People need to go into communities to let them know about these appliances and demonstrate how they work.

We also need more cross-disciplinary dialogue. Lifting people out of poverty requires more than electricity or appliances; the solution has to involve people who work in agriculture, environmental advocacy, etc. A practical example is solar water pumps, which make it easier for farmers to generate income. But productivity is not only a function of water; farmers also need good seeds, fertilizer, and good soil. So people outside the energy sector need to be involved as well.

Ultimately, we need to build a market that can exist without external support. Think of Coca-Cola. Soda is the one thing that is ubiquitous in every place I have been, even where people don’t have high incomes. Coca-Cola has figured out how to reach the last mile in countries like Kenya and India. The solar appliance sector needs to get to the same place.

Developing a self-sustaining market for solar appliances will require collaboration across governments, the private sector, and development partners. Governments need to prioritize solar appliances and other energy-efficient solutions as part of their national electrification strategies, and the appliance sector needs to build muscle in distribution and consumer awareness. What’s more, all these actors need to prioritize ensuring that solar appliances support increased productivity, driving up incomes for communities living below the poverty line.

Many critical pieces of this puzzle are currently missing. Right now, a lot of the money in the solar appliance sector comes from European governments as part of their international aid programs. But if we’re thinking about a sustainable solution for more than 50 countries and more than half a billion people, it cannot be contingent on well-wishers alone.

Interview edited and condensed.

“Naija no dey carry last” in Pidgin means Nigerians always aim to finish first. This spirit is reflected in the country’s focus on innovation, driven by creativity and passion. However, for over 86 million Nigerians without reliable electricity, the struggle to keep businesses running means often relying on costly, polluting diesel generators. This added expense and the uncertainty brought on by regular power cuts place a significant burden on the country’s people, economy, and environment.

Affordable, solar-powered refrigerators are an elegant solution with the potential to transform small businesses in Nigeria’s rural, off- or weak-grid communities.

Solar appliances for any wallet

Solar refrigerators are efficient and effective but high costs and limited financing keep them out of reach for many Nigerians who could benefit from their impact. Recognizing this gap, CLASP’s Productive Use Financing Facility (PUFF) stepped in, offering grants, subsidies, and business support to companies such as Consistent Energy Limited to put affordable, life-changing technologies into the hands of those who need them most.

“The grant that was given to us by CLASP under this project really helped us building our capacity to reach last-mile distribution chain. The landed costs of the fridge to a customer in Nigeria will have been very high if not for the subsidy that we received,” says Segun Adaju, the CEO of Consistent Energy.

Solar refrigerators: A boon for businesses and customers 

Solar refrigerators keep food cool, safe, and marketable and reduces waste. Without reliable refrigeration, shopkeepers spend more time and money on temporary cooling options such as ice and coolers and are forced to raise prices to do so, hurting both the business and their customers. This cycle was no longer viable for small business owners such as Abibat in Nigeria.

“We were buying ice blocks which led us to some debt, and after a while, the block would melt. We no longer had cold items for sale,” says Abibat Akinwale, a shopkeeper and Consistent Energy client. “The solar fridge has really increased sales. Business is very good now because I’m able to sell cold drinks.”

Consistent cooling creates opportunities for growth 

Reliable, long-term cooling keeps food prices stable, meaning that Abibat’s customers have good reason to return to their shop. In Nigeria, the appeal of solar refrigerators lies in their reliability, a quality that resonates with businesses that refuse to “carry last.”

In a country where every Naira counts, solar-powered refrigerators are a game changer for small business owners in Nigeria. Because they are powered by renewable energy, solar refrigerators provide cooling without the cost of constant refueling. This switch to solar means that entrepreneurs save thousands each month that would otherwise be spent on generator costs, fuel, and maintenance. Instead, they can channel those funds to more productive uses and fully participate in the country’s growing economy.

Such opportunities for growth are especially important for women like Helen Obina, who make up a large percentage of the small business owners in Nigeria. For her, business was “not really moving” because she relied on the grid and generators. Installing her solar refrigerator relegated those worries to the past. “Having a solar fridge has really changed my business. The sales have really increased, and the business is moving,” she shared. Helen’s story is not isolated, it is an example of a growing trend for those who are able to access life-changing solar appliances.

Solar solutions bridge the energy gap 

Refrigerators are an essential appliance for sustainable development, but 60% of the population in Africa does not own one. For nearly a decade, CLASP has been working to bridge this energy access gap by improving access to efficient appliances that work in off-grid or weak-grid areas.

“Over 600 million Africans don’t have access to electricity. Efficient appliances are an affordable and clean option for these cut-off communities who are otherwise forced to use polluting and expensive alternatives to maintain a good standard of living and actively participate in their economies,” says Ruth Kimani, a Senior Associate at CLASP.

These productive-use appliances (PUAs), such as solar-powered refrigerators, solar water pumps, and solar milling machines are technologies that have a direct, transformative impact on local communities, small businesses, and people’s livelihoods. They are also a necessary shift toward clean energy and reduced reliance on diesel-powered generators.

Shift to solar signals promising future 

CLASP and companies such as Consistent Energy have helped small business owners in Nigeria gain independence from unreliable and costly energy sources through renewable appliances. They are now free to chase their dreams and ambitions with renewed fervor, which will have a positive impact on the economy, people, and the planet.

About The Productive Use Financing Facility

CLASP’s Productive Use Financing Facility, is supported by The Global Energy Alliance for People and Planet (GEAPP). It has provided financing to 24 companies in six countries, to enable the distribution of over 13,000 productive-use appliances, directly impacting more than 58,000 households.

Millions of people lack access to the power grid, particularly in low-income rural areas of Africa and South Asia. If the current slow pace of electrification continues, 660 million people – most of them in Africa – will remain without electricity in 2030. Due to numerous challenges, people in off-grid settings typically have a lower quality of life, worse health outcomes, higher energy costs, and fewer economic opportunities than their grid-connected peers. High-quality, efficient off-grid solar appliances are a proven solution to these challenges.

This report – the third in the State of the Off-Grid Appliance Market series – finds that while the sector has strong fundamentals, it must rapidly grow in scale and ambition to avoid leaving people behind.

Key Findings: 

• Approximately 159 million off-grid solar fans, water pumps, refrigerators, and grain mills are needed to serve people who lack access to the electric grid. Less than 2% of this demand is being met, leaving more than half a billion people without life-changing appliances.

• There is a significant market opportunity of $58 billion USD for off-grid solar appliances like fans, water pumps, refrigerators, and grain mills.

• The off-grid appliance sector is characterized by a multitude of business models, reflecting a diverse range of technologies, end users, and operating environments. There is no one right business model; rather, chosen models need to be managed appropriately.
• Closing the energy service gap in sub-Saharan Africa and South Asia requires exponential growth in the appliance sector. This can be achieved by deploying significantly more capital, strengthening cross-sectoral collaboration, and developing coherent policies and innovative business models.

Recommendations:  

• Governments should emphasize quality assurance and consumer protection through rigorous quality standards and tax and duty exemptions to make high-quality solar products more accessible; support an enabling environment by incentivizing local manufacturers and launching consumer awareness campaigns; and develop integrated policies by establishing cross-ministry task forces to integrate and harmonize policies and regulations.

• Investors, development partners, and financiers should encourage market entry by increasing the deployment of capital over the next ten years; create public-private partnerships by developing programs that combine public and private funding; integrate with climate finance by leveraging carbon credits and other climate finance mechanisms; and provide innovation funding to local and foreign technology innovators.

• Technology innovators should design appliances that meet the specific needs of local off-grid consumers; and enhance product durability and reliability that focuses on long-term user satisfaction and low maintenance costs.

• Venture builders and entrepreneurs should work to expand pay-as-you-go (PAYGo) models; leverage catalytic grants to innovate business models and build partnerships; and focus on specific market segments to enhance efficiency and increase market penetration.

• All market actors should prioritize user-centric data that directly benefits appliance users; harmonize methodologies that establish standardized tracking systems for assessing progress and informing policy decisions; and facilitate data sharing to inform decision-making and policy development.

Read the “Leave No One Behind: Bridging the Energy Access Gap with Innovative Off-Grid Solar Solutions” report.

About Efficiency for Access 

Efficiency for Access is a global coalition working to promote renewable and energy efficient appliances to deliver clean energy to the world’s poorest people. It is coordinated jointly by CLASP and the UK’s Energy Saving Trust.

Commercial beverage coolers, or visi coolers, are glass-fronted refrigerators used in stores and restaurants to display bottled and canned drinks. According to the India Cooling Action Plan (ICAP), this sector will grow 2-fold in the next decade and 6-fold in the following one, increasing energy use by 2.2 to 6 times.

While domestic refrigeration in India is regulated for energy efficiency, many commercial refrigeration products are not yet covered by the Bureau of Energy Efficiency (BEE) standards and labeling program. Given the growing market, BEE plans to introduce energy efficiency labels for visi coolers to promote more efficient models. CLASP supports BEE by conducting market assessments and developing efficiency policies for these appliances.

CLASP’s market analysis of visi coolers in India revealed several key findings:

• In India, visi coolers vary widely in demand and popularity across the market.
• About 75% of manufacturers specialize in models with capacities ranging from 200 to 500 liters, expected to last around 7 years on average.
• International suppliers play a significant role in the visi coolers market, with 30% of parts imported from countries like China, South Korea, Thailand, and Slovakia.
• Many visi coolers in the market remain in use for more than 7 years, indicating their longevity.
• Different types of stores use visi coolers differently; for example, dairy shops use coolers to keep milk and dairy products cool, while smaller stores may switch the coolers off when product is cold.
• Overloading of shelves and frequent opening can reduce cooling efficiency and increase energy consumption.
• Single-door visi coolers are prevalent due to space constraints in stores.
• Furthermore, single-door models constitute almost 90% of production, while nearly 100% of respondents manufacture floor-standing, vertical visi coolers.

The labeling program for commercial beverage cooler was launched under voluntary phase by BEE on 1st March, 2024. The validity of the program will be from 1st March, 2024 to 31st December, 2026.

The program is expected to reduce energy expenditure by 11.67 billion kWh from 2024–2034, and reduce CO2 emissions by 8.35 megatons (Mt) CO2.

The recent China Refrigeration Symposium 2024 and the China Cooling Expo 2024 took place in Beijing. China also announced it will promote the use of CO₂ and other natural refrigerants to reduce the harmful environmental impact of cooling systems.

CLASP was there too, to present our global research on the interlinked climate and sustainable development opportunities affordable, efficient cooling appliances can bring, as well as the policy mechanisms that can expedite a country’s transition to efficiency. CLASP research indicates that improved appliance efficiency policies in China would reduce 500 million tons of CO₂ by 2040.

CLASP has supported data and analysis to support China’s policy upgrades for commercial refrigerators, room air conditioners among other appliances. The China Labeling Program covers more than 150 appliances and emphasizes high efficiency standards.

The China National Institute of Standardization (CNIS) and leading universities like Southeast University develop frameworks for improved efficiency policies.

“CLASP has provided international best practices to CNIS and immense support to our technical teams, helping us make significant progress in improving appliance energy efficiency in China. Our efforts will help the country meet its commitments of peaking carbon emission by 2030, and reaching carbon neutrality before 2060,” said Liqiang Xing, Director of Resource & Environment, CNIS.

CLASP’s research highlights the opportunity and urgency needed for concerted global efforts to achieve high-efficiency cooling solutions. “The critical role of policymaking in implementation of high-efficiency technologies cannot be overstated. Chinese leaders who set strict standards for energy efficiency are a beacon for the global community”, said Steven Zeng, CLASP’s Program Lead in China.

As CLASP continues to collaborate with international policymakers, industry stakeholders and global partners, momentum for high-efficient cooling is picking up pace. By leveraging collective expertise and shared goals, the path to a more energy-efficient and environmentally sustainable future for cooling systems is increasingly attainable.