Hard times for pay-as-you-go model

While sales of off-grid solar kits increased slightly in 2024, the market has not regained the momentum seen before 2022. The latest report from the industry’s professional association, Gogla, includes data for the first time on solar generators (38,000 units sold in 2024) and walk-in solar cold rooms (578 units).

2024 Off-Grid Solar Market Report: Steady Growth Amid Financial Challenges
Market Overview

The global off-grid solar industry sold 9.3 million solar kits in 2024, marking a slight increase from 2023 but remaining below 2022’s peak levels, according to GOGLA’s Annual Market Report (published May 26, 2025). While sub-Saharan Africa—led by East Africa—remains the dominant market, the sector has yet to fully recover from the 2021-2022 financial crisis, which constrained access to capital. Despite inflationary pressures and household budget strains, the industry has shown resilience: an additional 20 million people gained energy access in 2024, bringing the cumulative total to 138 million users since 2010 (though ongoing functionality of these systems is unverified).

Pay-as-You-Go (PAYGO) Challenges

• Dominant but Fragile Model: PAYGO, enabling installment-based solar purchases, drove most 2024 sales. However, its reliance on regular repayments in economically volatile environments (e.g., inflation, income instability) poses risks.
• Affordability Barrier: Off-grid solar often costs more than grid electricity, limiting household spending flexibility. Declining purchasing power further restricts access to microcredit, raising concerns about the model’s long-term dependence on low-income debt.

Role of Subsidies & Impact Financing

• Results-Based Financing (RBF) Gains Traction: Designed to adjust repayment obligations with revenue fluctuations, RBF helps stabilize operators while lowering user costs—though it relies on sustained donor and policy commitments.
• Call for Policy Stability: GOGLA’s Executive Director, Sarah Malm, urges clearer, long-term subsidy frameworks, citing their necessity (not just optional support) for sector growth.
• Institutional Backing: The World Bank and African Development Bank’s 2030 electrification initiative (targeting 300 million people) may catalyze subsidy schemes for solar home systems.

Expansion into Commercial & Industrial (C&I) Segment

• New Data Inclusion: 2024 saw 38,000 solar generators and 578 walk-in solar cold rooms sold—a pivot toward productive-use equipment for agriculture and businesses.
• Strategic Applications: These systems, vital for crop preservation, rural cold chains, and small enterprise operations, signal market diversification into less financing-dependent, economically structural segments.

Moving Forward
GOGLA calls for enhanced industry collaboration to improve sales tracking and inform policy. As the sector navigates financial precarity and energy-access inequities, blended financing and C&I growth may offer pathways to sustainable scale.