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Besides being a growth driver, the model of partnerships and\nspecialisation has enabled smaller companies enter the solar field without\nbuilding everything from the ground up, industry players shared at the forum.<\/p>\n\n\n\n
It means both new businesses and established ones can foray into the green energy space by simply focusing on a single component of the solar value chain. For startups, this specialisation lowers the entry barrier in terms of costs, expertise and turnaround period, while allowing them to perfect their craft, leading to efficiency.<\/p>\n\n\n\n
For established businesses, partnerships enable them branch out into the off-grid renewable energy space by providing a service needed by solar practitioners, for instance telcos offering data analytics, remote monitoring and mobile payment services.<\/p>\n\n\n\n
This convergence has resulted in faster production of solar\nlighting and irrigation devices at relatively lower costs and with a great deal\nof efficiency as firms narrow their focus on one aspect of the value chain.<\/p>\n\n\n\n
\u201cThe convergence of business models into one through\npartnerships and specialisations is helping drive off-grid solar and enabling\nbusinesses to balance between profit and growth,\u201d said Mansoor Hamayun, CEO of\nBboxx \u2013 a UK-based home solar systems provider with a market footprint in East\nAfrica.<\/p>\n\n\n\n
\u201cYou don\u2019t have to do everything yourself as a solar company.\nBuilding partnerships across the entire value chain leaves you to do best at what\nyou\u2019ve specialised in. Actually building everything from scratch could be\nunsustainable,\u201d he added.<\/p>\n\n\n\n
Bboxx, whose head office is in the UK, has raised $150\nmillion over the past 10 years with its products manufactured in China.<\/p>\n\n\n\n
Hamayun cited Kenya\u2019s largest telecommunications firm,\nSafaricom, as an example, having entered into pay-as-you-go home solar service\nthrough a partnership deal with solar vendor M-KOPA.<\/p>\n\n\n\n
The global off-grid solar market has witnessed rapid growth\nover the past 10 years when it started off. More than 180 million off-grid solar units have been sold worldwide and the\nsector saw $1.5 billion in investments since 2012, according to the Market\nTrends Report<\/em> jointly authored by the World Bank and GOGLA.<\/p>\n\n\n\n Despite the gains made, some 840\nmillion people still lack access to electricity globally, and condemned to\nenergy poverty. A further growth in the solar market is expected to absorb this\nmarginalised global population, most of whom are located in remote backwater\nvillages.<\/p>\n\n\n\n \u201cWith\na 17 percent market penetration of solar in Africa, coupled with the estimated\n$6 billion in financing needed to reach universal electrification targets, the\nopportunities and need for accelerating investment by the private sector,\nincluding financial institutions, are immense,\u201d said Jumoke Jagun-Dokunmu, International Finance Corporation (IFC) regional\ndirector for Eastern Africa.<\/p>\n\n\n\n \u201cAs the\nsector matures with the financial transparency of firms in the sector,\nstrengthened by efforts such as the paygo (pay-as-you-go) platform, and as the\nindustry\u2019s bankability continues to improve, IFC is bullish on the opportunity\nat hand to build on our previous investments in the early stage market.\u201d<\/p>\n\n\n\n Market\nwatchers reckon that the solar industry has evolved quickly over a relatively\nshort period, from the earliest days when traditional solar companies pursued\nvertically integrated models \u2013 covering the entire value chain from\nmanufacturing to retail.<\/p>\n\n\n\n Much as\nthis model helped such firms gather insights across the value chain and have\ncontrol over their operations, it proved too capital-intensive, with only a few\ndeep-pocketed players entering the field.<\/p>\n\n\n\n Then the\nmodel changed and smaller yet nimbler firms joined the fray in droves,\nresulting in the explosion witnessed currently. This unbundling was only made\npossible by the value chain being broken by the forces of demand and supply\ninto various segments, around which different firms specialised in. <\/p>\n\n\n\n \u201cYou don\u2019t have to own the entire\nvalue chain. Nowadays you find manufacturing of solar equipment being done by a\ndifferent company that has specialized in that, another firm providing\nsoftware, and others doing vending and installation of solar lighting and\nirrigation kits in a seamless chain of coexistence. Basically different\ncompanies with different areas of specialisation and strengths but same cause \u2013\nsolar electricity access,\u201d said Emmanuel Beau, the CFO at Energy Access\nVentures.<\/p>\n\n\n\n \u201cInitially, when off-grid solar was\nnascent, it wasn\u2019t about profit-making but proving the business model. Now that\nwe\u2019re past the experimentation phase, investors have quickly found out that\npartnerships and specialisation are the keys to creating an impact through\npower access while making money at the same time,\u201d he added.<\/p>\n\n\n\n Partnerships, be it B2B or between\npublic and private entities, are leading to\nrapid business scale-ups.<\/p>\n\n\n\n \u201cThe interplay between mobile network\noperators and pay-as-you-go (PAYG) solar providers is a good example of how\npartnerships are fuelling scalability especially in Africa,\u201d said Nicolas Snel,\nsenior insights manager at Mobile for Development Utilities.<\/p>\n\n\n\n President Uhuru Kenyatta, who opened\nthe solar forum in Nairobi, said that off-grid solar solutions would help Kenya\nachieve 100 percent power connectivity by 2022.<\/p>\n\n\n\n Kenya\u2019s electricity access currently\nstands at 75 percent of the population.<\/p>\n\n\n\n \u201cThis\nforum comes at a time when Kenya has been recognised as the world\u2019s second\nlargest standalone solar market after India and we\u2019ve achieved this feat on the\nbasis of 6.2 million verified sales of solar products since 2009 and 14 million\npeople accessing improved energy through off-grid solar solutions between 2006\nand 2019,\u201d President Kenyatta said at the forum.<\/p>\n\n\n\n \u201cIn fact, in 2019 we continued this upward trend, achieving\ntwo million sales of solar products. This tremendous growth in the uptake of\noff-grid solar solutions is an intricate part of my administration\u2019s strategy\ntowards realization of universal access to electricity by 2022,\u201d he added.<\/p>\n\n\n\n President Kenyatta said his government was working closely\nwith the private investors to unlock a new wave of green financing and achieve the\ncountry\u2019s ambitious connectivity goal.<\/p>\n\n\n\n \u201cTo achieve our goals for off grid solar solutions, we also\nrecognise the importance of partnering with the private sector. In this regard\nwe as government have provided an enabling environment for private sector\ninvestments. In deed we have given import duty exemptions on a range of solar\nproducts to ensure more solar investments as well as affordability to high\ncosts products for our consumers.\u201d<\/p>\n\n\n\n According to Radhika Thakkar, Greenlight Planet corporate\naffairs vice president, for off-grid solar solutions to achieve universal\naccess by 2030, it will require a $7.7 billion bump in investments through a\nmix of climate finance products and local currency loans.<\/p>\n\n\n\n