UK Looks to Tap the Burgeoning African Solar Market

The United Kingdom after Brexit faces a challenge in boosting economic growth and has to look for newer pastures apart from Europe where it can generate economic and trade growth. Africa is one of the fastest-growing regions with 8 out of the 15 fastest growing economies located in the continent. Given that the per capita consumption of African countries is quite low, there is a huge potential for growth in almost every arena. Lack of capital and technology is a major factor impeding progress and once those factors are brought in the African countries can grow even faster. China has been the fastest off the racing block and is the largest trade partner to most African countries. It is also the largest investor and aid giver to the continent. Large Chinese companies have managed to capture huge infrastructure contracts financed by its state-owned banks to become the dominant foreign force in the continent.

The United Kingdom can also look to emulate the example of China in some cases to become a big exporter and investor. Energy is one huge area of growth in Africa as the per capita energy consumption remains abysmally low. The lack of suitable generation, transmission and distribution infrastructure in most countries allows the governments to try a different mechanism to use modern technology for a lower and faster rollout of energy access for its citizens.

Off-grid solar energy has become extremely cheap over the past few years with the falling prices of equipment. It is possible to supply solar home systems coupled with storage at a much cheaper cost rather than laying out the whole power supply chain infrastructure. Things like solar lanterns and solar home lighting systems have already found a big market in countries such as Nigeria and Kenya. The business models around lowering the cost of finance such as the “Pay as You Go” models have allowed even people at the very bottom of the pyramid to get access to modern energy through accessible financing options. Startups such as Azzuri and others have already established viable business models around off-grid solar products.

The United Kingdom with its huge service and financing expertise is ideally placed to reap this growth opportunity by working with the government in Africa to support the off-grid solar market which can scale to as big as USD 24 billion over the next 5-6 years.