The dramatic drop in the price of solar panels and lithium-ion batteries, other advances in energy storage, and new business models are driving surging market demand.
The number of off-grid solar systems around the world grew by 41 percent from 2015 and 2016, according to the International Finance Corp.’s Creating Markets for Climate Business report.
Bloomberg New Energy Finance predicts that fully one in three households globally will use off-grid solar by the end of this decade.
Investment in micro- and mini-grids has accelerated, with the global market expected to reach $200 billion by 2025. That counts as exponential growth. In 2015–2016, mini-grids accounted for $68 million of equity, debt, and grants raised. Pay-as-you-go solar business models raised $223 million in 2016.
The key to such off-grid growth are battery and other storage technologies that make mini-grids increasingly reliable and cost-effective.
Annual investments in storage in emerging markets are expected to grow tenfold over the next decade, from about $2.5 billion in 2016 to $23 billion in 2025.
About half of that growth is expected in China, with $7 billion in India, $4 billion in South Asia, $3 billion in North Africa and the Middle East, $2.5 billion in Sub-Saharan Africa, and $2 billion in Latin America and the Caribbean.
Countries are packing promises into their national plans. Sub-Saharan Africahas the greatest growth potential for off-grid solutions, as only 35% of households have grid connections.
Tremendous opportunities also exist in Bangladesh, India, Indonesia, and Pakistan, home to many of the estimated 1.6 billion people globally who still lack access to reliable electricity.