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DC Power for the Off-Grid Market

Tuesday, February 24, 2015

Photo: NREL
In remote and rural areas, where there is no power to be wasted and no or unreliable grid access, direct current (DC) powered solutions present a great, still untapped, market potential. One of the main challenges to uncover this market remains, as highlighted by Rose Mutiso of the Clean Energy Ministerial’s Global Lighting and Energy Access Partnership (Global LEAP) Initiative, a lack of awareness among key market actors such as investors, energy product manufacturers, and off-grid energy service providers. This blog post presents some of the ways in which DC power – combined with mobile solutions – can improve energy access, by enabling the provision of efficient solutions.

Nexus between energy access & energy efficiency

DC appliances bring a solution to powering off-grid communities, as they are well adapted to low power renewable energy sources such as solar while eliminating losses due to power conversion. Currently, some off-grid solar energy providers now also supply DC appliances for use in off-grid areas. Fosera, for instance, has created a 5.5W DC powered TV [1] while a common AC TV would have much higher load. The company also produces out-of-the-box solar home systems that include well calibrated basic household appliances (from lights to radio, fans and TVs), guaranteeing the overall energy efficiency of the products.

The Global LEAP Initiative is working with many of these off-grid energy service providers and DC appliance manufacturers and, among other activities, organises the Global LEAP Awards Program, to help raise awareness and promote high-quality, energy-efficient and affordable off-grid products.

Overcoming the cost barrier

Energy efficiency is essential to allow customers to use more appliances in off-grid areas where energy supply is constrained but also, and more importantly, to control costs. A forthcoming study conducted by Global LEAP experts has found that using super-efficient DC appliances, which require much less energy than corresponding AC appliances, results in significant cost-savings because smaller off-grid energy systems can be used to provide equivalent service. Cost reduction becomes all the more critical in view of the growing off-grid demand, beyond lighting products, for larger energy systems – such as solar homes systems or mini grids – which are also considerably more expensive (Solar lanterns are priced between $20 and $50 while solar home systems (SHS) cost $300 to $500 [2] ).

Mobile: an enabler to climb up the energy ladder

In view of this growing demand for more energy products and services in off-grid areas, innovative financial solutions are a powerful tool to unlock this market. While DC power tackles the issue of affordability, mobile payments presents a complementary solution. Enabling mobile payments for solar lanterns and larger solar home systems, for instance, can help low-income off grid customers by providing flexible payment structures and as a result reducing the up-front cost barrier.

Adding GSM Machine-to-machine (M2M) modules to solar home systems’ units is another way in which mobile technology can improve service delivery of decentralised energy solutions. Although costs of modules remain high [3] , especially proportionately to the price of small solar devices, they offer a strong value add: enabling financing and credit sales under a PAYG model as well as the collection of valuable information on both customer usage and system performance [4].

Mobile embedded technologies, along with DC power, could become central to building sustainable and efficient energy solutions in underserved areas where AC grid power is not viable.

[1] http://www.globalleapawards.org/en/Televisions.aspx
[2] IFC Report 2012 “From Gap to Opportunity: Business Models for Scaling Up Energy Access”
[3] Prices of GSM M2M modules are currently ranging from US$8 to US$13 and 3G M2M modules from US$38 to US$45 for low volume orders (such as 10,000 units). For low cost solutions (such as solar lanterns) retailing from US$20 to US$50, http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/12/Sizing-the-Opportunity-of-Mobile_Nov-2013.pdf
[4] Ibid.

Article reprinted with permission from the GSMA blog. View the original article: "DC Power for the Off-Grid Market."

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