Key messages from the report
- The use of OGS by households, businesses, and public facilities improves quality of life, education, and health, while contributing to economic growth (through job creation and enhanced productivity) and climate adaptation and resilience.
- Public funding for OGS is proven to accelerate access, creating jobs and driving economic growth.
- Growing the OGS sector can generate tax revenue and reduce fossil fuel subsidy expenditure, in some cases enabling governments to make a net profit on their OGS programs.
- The cost of inaction is extremely high; the “left behind” today will be left even further behind tomorrow as the world continues to make significant strides in digital literacy and connectivity, intensifying the need for electricity.
- Achieving universal Tier 1 access for households could save USD 15.5 to USD 16.7 billion per year—equivalent to USD 142 per household—by reducing inefficient lighting expenditure and increasing incomes.
- Replacing diesel generators used by businesses with OGS could save an estimated USD 6.3—12.5 billion in fuel costs, while avoiding a significant 8.3–16.6 MTCO2e of greenhouse gas emissions per year.
- Electricity access is crucial for the effective operation of social infrastructure like schools and healthcare facilities. Currently, more than 1.87 million schools and 146,000 healthcare facilities lack adequate and consistent access to electricity.
There is a compelling case for governments and other stakeholders to invest in OGS, given the sector’s profound social and economic impacts, its contribution to climate goals, and its ability to offer an attractive return on public investment.
OGS products have a profound social impact; customers report reduced energy spending, significantly improved quality of life, and good or very good value for money—both for solar lanterns and solar home systems. 64% of solar lantern users and 62% of solar home system users report significantly improved quality of life.
OGS helps to address energy poverty, which disproportionately affects women and girls. It reduces the need for unpaid domestic tasks that typically fall to women, such as fuel collection. This frees up time to invest in activities that boost economic and social mobility, such as education, employment, or micro-entrepreneurship.
OGS supports climate change mitigation, adaptation, and resilience to climate shocks. A least-cost approach to achieving universal access would result in estimated emission reductions of ~200 MTCO2e from residential uses, 8.3–16.6 MTCO2e from businesses, and 0.9 MTCO2e from public facilities per year.
Explore the climate impact and challenges of OGS products
OGS can have a major positive impact in climate adaptation and mitigation. However, as OGS integrates more deeply in national electrification plans, governments will have to plan how to manage the environmental challenges this poses.
Read MoreProviding a Tier 1 OGS system to all households for whom OGS is a least-cost solution by 2030 would provide a direct benefit of around USD 15.5–16.7 billion per year.
The direct benefit of approximately USD 15.5–16.7 billion per year, comes from savings on inefficient lighting and fuels, as well as additional income generated—working out to USD 142 per household, equivalent to ~10% of the average annual income in Sub-Saharan Africa.
An average of 20% of households use OGS for income-generating purposes. Evidence from East and West Africa indicates that households can boost their average incomes by 8.5% to 14% through OGS. As the average income for Sub-Saharan Africa corresponds to USD 105.5, the additional productivity from OGS would lead to an additional benefit of USD 3.3–5.5 billion.
OGS products could help businesses in off- and weak-grid areas reduce the use of generators, saving an estimated USD 6.3–12.5 billion per year in fuel costs while avoiding significant greenhouse gas emissions.
Businesses are also likely to realize income growth from productivity gains and longer hours of operation. The ability to power appliances through reliable and stable OGS sources can lead to significant increases in commercial output, preventing interruptions and enabling businesses to serve more customers and generate greater income. Businesses can also use OGS to power new appliances that enable them to provide new services (e.g., shopkeepers can use fridges to stock perishable goods) or to charge a premium (e.g., by installing fans on the premises).
OGS products can help farming households improve yields and diversify their crops as a result of better irrigation, contributing to food security. Nearly 31 million farming households lacking access to electricity could benefit from irrigation provided by a solar water pump. Access to water can also create opportunities for farmers to produce crops with higher commercial value.
Access to electricity is essential for the effective operation of social infrastructure such as schools and healthcare facilities. Electrifying schools could help reduce the estimated USD 5 billion annual cost associated with illiteracy, as it has been shown to increase school enrollment and completion rates. Similarly, electrifying healthcare facilities is critical for the nearly 1 billion people who currently rely on unelectrified health centers.
In Africa and Asia, electrifying schools could help reduce the estimated USD 5 billion annual cost associated with illiteracy, as it has been shown to increase school enrollment and completion rates.
Currently, over 1.87 million schools and over 146,000 healthcare facilities lack proper and reliable access to electricity. Electrification is directly linked to improved education outcomes, as it enables better learning environments in schools, supports technology use, and extends study hours. Similarly, electrifying healthcare facilities is critical for the nearly 1 billion people who currently rely on unelectrified health centers