Decentralized renewable energy has traditionally been under-estimated in emerging markets as only being capable of delivering electricity for home use, and then mostly for basic lighting. “Productive use”—creating goods and services either directly or indirectly for the production of income or value—has been more elusive.
But the reality is that decentralized technologies such as micro-grids have been powering businesses in remote areas of the United States, Australia and China for years, while micro-hydro is a mainstay of the Nepalese rural economy. Even the smallest solar lights are used to illuminate shops, help farmers tend their cattle and enable mobile phone charging businesses.
With rapid market growth and increased investment in decentralized renewables, many companies are now accelerating their push into productive use solutions. This is resulting in the emergence of a “Micro-Enterprise Economy”.
In Africa, Off-Grid Electric’s ‘business in a box’ is their latest innovation designed to catalyze micro-enterprises, and Mobisol is also extending it products to boost economic activity—a third of its customers already use their system for business purposes creating around $5 million per year in additional income. In Somalia, the Business Opportunities with Solar Systems (BOSS) initiative is focused on powering shops and restaurants with solar, and has moved from providing lighting, fans and blending to support for solar refrigeration, while in Mali, FRES has been using solar PV to develop rural trading hubs, supporting tailors, bakeries, radio stations, banks, game rooms, pharmacies, ICT services and commerce.
In India, the Smart Power India mini-grid development program reported that micro-businesses are the fastest growing customer segment, with 70 percent of businesses reporting increased numbers of customers after signing up to mini-grid services, and 80 percent planning to expand their business with access to reliable power. Because the time required to stimulate micro-enterprise demand is longer than the time needed to build a micro-grid, Smart Power India has launched a micro-enterprise development initiative to address the issue.
With its experience of powering convenience stores, cold storage, welding, repair shops, water pumps and more, mini-grid company Steamaco has also recognized the unique opportunity it has to more actively drive productivity. As Founder, Sam Duby explained:
"Access to productive, grid quality electricity is an extraordinary catalyst. We’ve seen countless businesses and public services, from barbershops to water pumping stations mushroom up in the wake of our village scale micro-grids. We’re working with our clients to accelerate productive energy use, for example by leasing power tools to enable primary production and powering IT centers to tap the online global marketplace."
In Africa and India, entrepreneurship is in strong supply, but what has been lacking is the reliable, affordable, and available power to fuel latent potential and open up opportunity. With decentralized renewables, a new wave of pioneering companies are working to change all that, powering productivity, commerce, and the rise of the micro-enterprise.