JOHANNESBURG, March 1 (Reuters) - Togo began offering subsidies to its citizens to cover the cost of off-grid solar power systems on Friday in a move that if replicated elsewhere in Africa, could help accelerate the adoption of the green technology across the energy-starved continent.
Less than 40 percent of African households are connected to a national grid, representing a huge underexploited power market. Off-grid power solutions are now aiming to fill that gap, and have begun to attract the attention of large European power utilities.
“Access to electricity is a basic need and the government of Togo is committed to achieving 100 percent access for all ... by ensuring that no one is left behind,” Energy Minister Marc Ably-Bidamon said in a statement with partner company BBOXX.
Some 285,000 solar home systems were sold in Africa in the first half of last year alone, according to the latest data from GOGLA, an independent off-grid industry association. Global revenues from the pay-as-you-go systems are expected to reach $6 billion to $7 billion by 2022.
Such household kits form a cornerstone of Togo’s strategy to bring electricity to all of its nearly 8 million people by 2030.
UK-based BBOXX won a tender to electrify 300,000 Togolese households without access to the national grid. France’s EDF Group took a 50-percent stake in BBOXX’s Togo operation last year.
A second company, Soleva - a consortium of Aphlion Energy and Wawa Energy Solutions - signed a similar agreement with Togo in August.
Under the programme, the government will issue monthly vouchers to households operating a BBOXX or Soleva system.
The subsidy is meant to cover the relatively hefty price of the hardware, leaving customers to pay only the cost of the energy consumption.
“This pioneering initiative is a major stride forward in tackling a key obstacle to achieving universal electrification in Africa – this being that many customers are still living in poverty,” said BBOXX CEO Mansoor Hamayun.
Around 10,000 kits were installed in rural Togo last year. Another 100,000 households are due to be connected by 2020, and a total of 550,000 by 2030.
Reporting by Joe Bavier, editing by Louise Heavens