Lately, a lot has been discussed about the huge number, close to 600 million, of people, in Sub Sahara Africa living without access to modern electricity services and it was for good. It helps raise the awareness of all the energy stakeholders the significance of an action for change, solar leading the way as a viable solution forward. Photovoltaics grew faster than any other fuel in 2016, opening a new era for solar Power (IEA Renewables:

Analysis and Forecasts to 2O22, 2017). Despite the abundance of the energy resources (solar in particular) and the dire needs of the rural society for electricity, it never got the attention and interest of the money makers to commit resources as much as we are witnessing today. Overall, many factors contributed to the expansion of renewables across the globe. When it comes to solar PV, standalone home systems to be exact, Lighting Africa, a joint IFC and World Bank program launched in 2007, singularly positively influenced its expansion and growth in Africa. 

In many rural places in Ethiopia, households live widely spread and reaching them with the conventional grid is unthinkable. In those circumstances, solar standalone home systems are the ideal choices with respect to the current investment and technology solutions. Despite the down sides, the rate of adoption of solar standalone home systems in the rural places is increasing and the technology is getting matured. “The Global Off-Grid Lighting Association puts the average number of all solar lighting products sold in Ethiopia in a single quarter at around 250,000 units, (Mohit Anand, 2017).”  To sustain the business, it is a matter of learning from the past mistakes and doing it in a bit different ways.

Larger utility scale solar solutions are also relatively easier to develop except that it will add capacity mainly to the existing central grid. The scale of the business itself will attract those with capital, knowledge and expertise if it does make a business and economic sense for all. The recent selection of Enel consortium as a preferred bidder for a 100MW solar PV tender is a very good example to state (EGP, 2017).

What is not easy, I suppose, is solar mini and micro- grid systems. The first challenge is the fact that the technology is still at a piloting stage in Ethiopia. The country may not dare to take a risk to scale it fast given the underlying cost of investment. Coupled with a low interest of lending institutions to allocate capital to such prospective projects, the solution will remain nascent despite its potential to power more rural communities. The second challenge will be bearing the responsibility of development, construction and operation. On the one hand, the utility is already overburdened with its existing infrastructure and may not have the appetite to assume further responsibilities. On the other hand, the regulatory environment, the lack of access to finance, and the inconvenient payment modalities do not effectively incentivize the private developers to do it at a scale.

What is apparent right now is that as the technology is further tested in the ongoing pilots, confidence would inevitably be built prompting roll outs at a scale.  By the time mini-grids and micro-grid solutions become feasible in the country, however, with the current pace of distribution, most of the rural households would own solar home systems with a potential to resist for further expenditure even if better solutions emerge.

In many rural communities in Ethiopia where households are densely populated and communal services including schools, administrative , health, agricultural and religious services are being provided, mini grid and micro grid solutions are more feasible from the management perspective than are standalone solar home systems. Under the current market trend, the rural households are purchasing solar standalone home systems irrespective of where and how they live fixing the demand for some time in to the future. While Standalone solar home systems reach households, Mini and Micro grids solutions reach communities with a strong potential to increase the rate of urbanization in the country for an added advantage in the long run.

Today, apart from high level market studies, detailed resource assessment and site identification are still at the earliest stages challenging the country to make a tailored investment decisions. Lack of access to finance is thought to be one of the main barriers that hold back the development of the whole value chain in the solar industry in Ethiopia. With a thorough resource assessment, accurate sizing of the solutions and with a tailored investment, the limited available finance could better be utilized complementing the access coverage efforts from the many angles in the meantime avoiding costly repetitions.

One way to do that is working with development partners early on.  As much as they are pushing on  standalone solar home systems, development partners need also assist in fostering the development of the whole value chain in micro and mini grid solutions so that Ethiopia taps in to the potential of the mini/micro technology solutions. That way, the rural communities would be better served for less in a matter of few years.

Moreover, the country needs to find ways to transform the dominant informal market in to formal market channels. If it continues with the current trend, it will not only be challenging to maintain the quality of products and services but also difficult for future planning.