OFF-GRID SOLAR MARKET TRENDS REPORT 2026
The Off-Grid Solar Market Trends Report (MTR) 2026 is the latest in a biennial series, published by the Energy Sector Management Assistance Program (ESMAP) and GOGLA. This report has become the go-to resource for investors, industry leaders, policymakers, and stakeholders in the global off-grid solar sector.
Photo credit: Joel Mulwa for GOGLA
Headline Trends
- Off-grid solar is reaching more people than ever. 149 million people were served by affiliate off-grid solar products in 2025, up 26% from 2023, with 98 million reaching Tier 1+ energy access. Affiliate SHS sales grew rapidly over the 2-year period, while lanterns and cooling products declined, and solar water pumps plateaued. Growth has been achieved despite currency depreciation, inflation, climate shocks, and weak early-stage investment.
- Off-grid solar is creating jobs and boosting incomes. The affiliate sector employs an estimated 219,000 people, with companies reporting full-time employment up 29% and the agent base doubling since 2021. Affiliate off-grid solar products have generated an estimated USD 28 billion in additional income and savings for customers over the last 15 years. 7.4 million people use affiliate lanterns and SHS to support income generation, with solar generators becoming a key power source for businesses in Nigeria and South Africa. Beyond the affiliate market, agri-energy products are scaling rapidly in South Asia.
- The industry is consolidating and diversifying, while continuing to prioritize commercial sustainability. Strategic and distressed acquisitions, exits, pivots, and restructures – some of which were driven by an inability to raise follow-on capital – have reshaped the competitive landscape. Leading companies are expanding geographically while diversifying into new product categories and business models. Among reporting companies, PAYG portfolio quality is improving as companies tighten credit practices, with 90-day repayment rising from the low-80% range in 2021 to around 90% in early 2025, but profitability remains a challenge and companies' country operations are still typically loss-making.
- Affordability remains the main constraint. Around one-third of unelectrified households can afford an entry-level Tier 1 solar home system on PAYG, spending up to 5% of household consumption expenditure, while another third could afford it at a stretch, spending 5-10%. Affordability is likely to be lower in less mature markets, is highly sensitive to price, and is most constrained for displaced people, women and productive use customers buying higher cost technologies. Energy-as-a-service and rental models are emerging with the potential to help address affordability challenges.
- Off-grid solar remains concentrated in a handful of core markets, and is not yet reaching nascent markets, displaced communities or social infrastructure at the scale needed. In sub-Saharan Africa, 47% of SHS sales in 2025 were in Kenya, Nigeria and Zambia, while most markets in West and Central Africa remain nascent and are not growing. 37 million of the 117 million forcibly displaced people worldwide lack electricity, and humanitarian funding is declining. Nearly one billion people rely on unelectrified health facilities, and conventional procurement has failed to keep systems working long term. Annual public investment in electrification of social infrastructure needs to more than triple to close the gap, from around USD 120 million today to USD 400 million by 2028.
- Corporate financing held stable at USD 315 million in 2025, but it is increasingly concentrated. Three market leaders captured around 70% of corporate financing in the two years from 2024–25, shifting from equity to debt and the securitization of receivables. In 2026, a USD 50 million green bond backed by off-grid solar receivables became one of the first off-grid solar transactions to reach public capital markets. Debt to mid-sized and small companies fell from USD 175 million in 2022–23 to USD 79 million in 2024–25. Locally owned companies received just 3.1% of corporate financing in 2025.
- Public funding has held steady and RBF is scaling. While weaknesses in design have affected investor confidence, programs are improving as lessons are learned. New World Bank Group commitments to off-grid solar reached USD 974 million in FY25–26, level with FY23–24, with RBF playing an increasingly important role. Well-designed RBFs have accelerated sales growth and delivered first-time access at scale in Malawi, Mozambique, Zambia and elsewhere. However where subsidies were set too high, funds were exhausted early, restrictive eligibility has excluded smaller companies, and disbursement lags have created liquidity crunches. Governments and funders are adjusting designs in response.
- Scaling up the productive use of energy (PUE) has become a key priority for governments and development partners seeking to leverage energy access to achieve job creation and economic growth. PUE's share of off-grid solar grants roughly doubled, from 35% in 2022–23 to 71% in 2024–25. Overall, PUE investment has remained broadly stable but is reaching more companies with smaller tickets, as the number of transactions rose from 79 to 118 over the same period. The PUE Design Guide accompanying this MTR provides practical guidance for governments and funders designing cross-sectoral, outcome-led PUE programs.
- Ensuring that access is sustained is also an emerging area of focus. Quality-verified products last far longer than assumed, and strengthening repair ecosystems could further extend product lifespans. 95% of PAYG customers surveyed reported that their Tier 1 SHS was still working four or more years after purchase, with companies extending warranties and governments increasing warranty length requirements. Only 36% of customers who experienced a technical issue felt it had been satisfactorily repaired or replaced, falling from 58% for products under warranty to 22% for those out of warranty. The main reasons were not knowing where to get a repair, the cost of out-of-warranty repair and distance to repair services. A new Off-Grid Solar Repair Lab has been set up to help address this.
- Political recognition of off-grid solar continues to grow, and the challenge now is to convert it into stable, enabling policy environments and consistent delivery. Mission 300's National Energy Compacts mark a step change in government recognition of off-grid solar, but early implementation of commitments is mixed. In 2023, 69% of sub-Saharan African and South Asian countries assessed had duty or tax exemptions for standalone systems, but Kenya, Pakistan and South Africa have since revisited theirs. PAYG is attracting dedicated regulatory attention, and stakeholders increasingly favor proportionate, PAYG-specific frameworks over applying regulation designed for banks.
- Growth remains short of what is needed to achieve SDG 7, and accelerating progress will depend on how effectively public funding crowds in private capital. As companies focus on improving portfolio quality, the immediate priority is for governments to scale up public funding, designing it to enhance commercial performance and attract private co-investment, while providing a stable policy and regulatory environment. Reaching all 398 million people for whom OGS is the least-cost solution requires around USD 11.4 billion between 2027 and 2030 – around USD 1.3 billion a year in grants and affordability subsidies, and USD 1.6 billion a year in equity and debt.
- Public funding needs to sustain and deepen off-grid access. In the medium term, this means longer warranties and enhanced repair, as well as upgrades to help people move to a higher level of service. Blended finance will be needed to unlock local-currency debt and equity for mid-sized and smaller companies. Scaling productive uses will require outcome-led program design that builds in collaboration across energy, agriculture, water and digital sectors. Public institutions should be electrified through performance-based energy service contracts that ensure sustainability. In the long term, new delivery models will be needed to reach the hardest-to-reach and forcibly displaced populations. Mission 300 has created strong momentum behind universal electricity access, and the choices that companies, governments, development partners and investors make now will determine whether off-grid solar fulfils its potential role in closing the gap to SDG 7.