Despite an increase in grid electricity access over the last couple of years, a large number of the relatively widely dispersed rural population is unlikely to be able to access the national grid in the near term. This leaves a viable space for off-grid energy solutions to play an important role in providing quick access to reliable and modern lighting and energy services to households.
Given this demand potential and Uganda’s reasonably stable business environment, several companies are looking to enter or establish themselves in the solar sector. Supporting this emerging market will be crucial in promoting its growth.
The government of Uganda seeks to increase energy access
Seeking to improve access to modern energy services for their population, the Government of Uganda has spelled out a number of targets and policies to help achieve this goal. Several of these plans include a provision for renewable and off-grid sources.
Under the Rural Electrification Strategy and Plan (RESP) (2013-2022), the Government of Uganda has set a target to increase rural electricity access to 22% by 2022 through a mix of grid and off-grid services. Furthermore, in their 2016/17 National Budget the Government of Uganda declared that producers of solar, wind and geothermal energy will be allowed relief on VAT incurred on their business inputs, in order to reduce the cost of production of alternative sources of energy.
Accelerating access to off-grid PV through the market
Lighting Africa is supporting the Government of Uganda in their energy-provision goals. In 2014 a Solar PV Market Assessment Study was carried out with Lighting Africa’s support to determine the level of demand for off-grid solar products, map their supply chain, and identify key market bottlenecks. A “Solar PV options study” was also conducted to assess options for supporting the growth of a robust and sustainable PV market.
Following this market assessment, Lighting Africa played a critical role in designing an off-grid component of the World Bank’s Energy for Rural Transformation (ERT-3) project, which seeks to expand access to modern energy in rural areas.
The ultimate goal of this off-grid component is to accelerate households’ ability to access off-grid solutions through support provided to the market. As such, Lighting Africa carried out consultations with off-grid solar companies, commercial banks and other financial sector entities to inform the design of the project. As a result, it was determined that support will be provided to companies based on their meeting Lighting Global Quality Standards and their after sales service provisions. Project funds that will initially be provided for loan utilization by financial institutions is expected to directly contribute to an estimated 30,000 off-grid connections.
At the same time, Lighting Africa will carry out a consumer awareness campaign highlighting the benefits of quality-verified products through road shows and mass media. Underpinning the message of the importance of investing in quality products, Lighting Africa is supporting the Uganda National Bureau of Standards (UNBS) in adopting and enforcing internationally recognized standards aligned with Lighting Global’s Quality Standards. Together, these interventions are expected to kick-start the off-grid market in Uganda.