2019 State of the Off-Grid Market Report Finds Appliances on the Edge of Transformational Growth
The 2019 State of the Off-Grid Appliance Market Report analyzes major market trends for off-grid TVs, fans, and refrigerators across eight representative markets in South Asia and sub-Saharan Africa. Building on the inaugural 2017 State of the Appliance Market Report, which presented the first-ever snapshot of the off-grid appliance market, this exciting new report indicates continued maturity in the off-grid appliances market, with companies increasingly responding to consumer prioritization of quality and personal need, and demand for financing options. This exciting new report establishes its outlook as a fast-growing and attractive market which needs concerted action to be unlocked; and seeks to mobilize investment and policy support into the sector to accelerate growth.
The broader market ecosystem has seen widespread shifts as well, with policymakers, regulators, investors, and development actors placing a greater emphasis on energy-efficient off-grid appliances and the role they play in delivering higher tiers of energy access.
Key findings include:
- There is a significant potential market for off-grid appliances. We estimate the addressable market for off-grid appliances is large at USD 12.6 at the end of 2018, with the potential to double to over 25 billion in 2030. We predict improvements in affordability due to higher incomes and declining retail prices and better access to consumer finance will drive increases in market potential.
- The range of off-grid appliances available in the market has expanded. The television market shows signs of increased affordability, efficiency, and competition. Variations in product specification and price indicate the off-grid fan market is disaggregated and regionally specific. Finally, the refrigerator market remains nascent and in need of technology and product development to improve price and performance.
- Consumer affordability is the most significant constraint for growth. On the demand side, consumers cannot afford the retail price of an off-grid appliance without financing. On the supply side, producers struggle to lower the retail price due to high distribution costs. Access to finance for consumers, product innovators, and distributors will be critical to achieving scale.
- Many governments recognize the important decentralized energy solutions play in achieving universal energy access, yet off-grid appliances are not explicitly included in national electrification plans. Communicating the value of off-grid appliances and the role they play in enhancing sustainable development can help move governments forward in defining clear regulations that promote appliances and help crowd in donor support for further electrification.
- Accelerating market growth for off-grid appliances will require a concerted effort across a wide array of actors. Governments should further recognize the importance of driving energy demand through weak- and off-grid appropriate appliances within their electrification initiatives and take policy action accordingly. Donors and impact investors should continue to finance off- and weak-grid appliances. Industry players should be required to adopt responsible consumer lending practices. Global white goods players should be supported and incentivized to recognize the large financial opportunity in weak- and off-grid appropriate appliances — in particular, the USD 10 billion television opportunity.
Off-grid solar systems provide an estimated 73 million households with access to modern energy services globally. Energy-efficient off-grid appropriate appliances allow users of decentralized energy solutions to unlock the benefits and improved quality of life that stem from access to electricity by enabling them to increase productivity while maximizing the efficiency of their system. The 2019 State of the Off-Grid Appliance Market Reports demonstrates the opportunity for TVs, fans, and refrigerators to be a turnkey in electrification efforts.
By unlocking latent demand for energy services, off-grid appliances can deliver significant economic, health, education, and quality of life benefits for an estimated 60 million households worldwide. Products today have continued to develop in their efficiency, but the keys to reaching this market potential are greater affordability through financing and economies of scale, broader customer awareness through marketing, and deeper insight into consumer needs. The industry is poised for an exciting growth trajectory and should work together with ecosystem partners to continue proving the demand for energy access and providing off-grid customers access to a better lifestyle.