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BUSINESS

Off-grid solar investment needs hit Sh1.47 trillion

By admin
October 27, 2026 4 Min Read
0

The number of people using off-grid solar products globally has increased by 26 percent in two years to 149 million, as the technology increasingly powers businesses, farms and essential services in areas beyond the reach of national electricity grids.

However, expanding access to the technology among millions of people still living without electricity will require an estimated $11.4 billion (Sh1.47 trillion) in investment between 2027 and 2030, according to a new report by the World Bank Group and the Global Off-Grid Lighting Association (GOGLA).

The Off-Grid Solar Market Trends Report 2026, released at the Global Off-Grid Solar Forum and Expo in Kigali, Rwanda, shows that the number of people using solar home systems, lanterns, water pumps, generators and other off-grid solar products rose from 118 million in 2023 to 149 million in 2025.

The report identifies off-grid solar as the least-cost electricity solution for at least 398 million people without access to power, highlighting its growing role in closing the energy access gap.

Beyond lighting homes, the technology is increasingly supporting economic activities, including agriculture, retail and small businesses, while providing electricity to schools and health facilities in remote areas.

An estimated 7.4 million people now use off-grid solar to run microenterprises or support income-generating activities. Over the past 15 years, the products have generated an estimated $28 billion in additional income and savings for customers.

The sector is also creating jobs. Companies surveyed for the report employed 219,000 people, representing a 29 percent increase over the past two years. Most of the jobs are held by agents and technicians working in the communities where the products are sold and maintained.

“Off-grid solar has proven it can deliver at scale, through shocks, and in places the grid has not reached. It now irrigates farms, keeps clinics open, and powers the businesses that hold rural economies together: these are the functions of economic infrastructure,” said Sarah Malm, executive director of GOGLA.

“Yet financing has not kept pace with what off-grid solar is being asked to do. Until governments, investors and development partners treat it as the infrastructure it has become, hundreds of millions of people will wait longer than they should for power,” she added.

Despite its relatively low cost, affordability remains a major obstacle to wider adoption.

Only one in three households without electricity can afford an entry-level solar home system through pay-as-you-go financing, while another third can afford one only with difficulty.

The report recommends targeted measures to lower the cost of solar products, including value-added tax exemptions, import duty waivers and subsidies for low-income households.

It estimates that extending off-grid solar access to hundreds of millions of people by 2030 will require $1.3 billion annually in grants and affordability subsidies, alongside $1.6 billion a year in equity, debt and receivables financing.

The investment would support the expansion of solar systems and help households and businesses overcome the upfront costs that often prevent them from accessing electricity.

The funding requirement comes as governments and development partners seek to accelerate electricity connections across sub-Saharan Africa through Mission 300, an initiative by the World Bank Group and the African Development Bank to connect 300 million people to electricity by 2030.

Distributed renewable energy, including off-grid solar, is expected to play a major role in meeting the target. The report says 80 percent of the 35 national energy compacts developed under Mission 300 include distributed renewable energy in their connection targets.

Public financing is also increasing. World Bank Group commitments to off-grid solar reached $974 million in the 2025–26 financial year, matching the level recorded in 2023–24.

Fanny Missfeldt-Ringius, manager of the World Bank Group’s Energy Sector Management Assistance Program (ESMAP), said the technology had evolved from a basic lighting option into a critical source of electricity for millions of people.

“Off-grid solar has grown from a basic lighting solution into a critical source of electricity for hundreds of millions of people, strengthening energy security, resilience and affordability while creating jobs,” she said.

The report also points to the durability of the technology, with 95 percent of surveyed customers reporting that their solar home systems remained functional four or more years after purchase.

However, the report warns that reaching the remaining unserved population will require governments to combine public funding with private investment and policies that make solar products more affordable.

The estimated $11.4 billion needed by 2030 represents a relatively small share of the $3 trillion to $5 trillion in annual investment estimated to be required globally for the energy transition.

The report argues that treating off-grid solar as essential infrastructure, rather than simply a temporary alternative to conventional electricity, will be critical to expanding access and supporting economic activity in underserved communities.

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Newswire is a Kenyan digital news outlet providing timely, factual and accessible news on the issues shaping Kenya. We cover business and the economy, politics and governance, technology and innovation, sports and regional events, alongside practical guides that help Kenyans navigate everyday services and opportunities.

Recent Posts

  • Don Julio, Nairobi Polo Club Host Lagos Team Ahead of Simon Kuseyo Cup
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