January 23, 2017

Near term off-grid electrification for 1.2 billion people and enabling the extremely poor to reach future purchasing global middle class

Solar energy prices have been dropping for decades. There is a lag in the price per watt of off grid solar for solar home systems behind the cost for solar per watt for the most efficient utility solar projects.

1.2 billion people currently do not have electricity. It costs $800-2000 per person to connect people to a grid many poor countries do not the means or capacity to create a universal national grid.

Offgrid solar, batteries and LED lighting will be circumventing this bottleneck. Although there is still distribution, delivery and retail availability issues in undeveloped rural areas. Drone delivery could surmount the problem of no roads or bad roads to get around the delivery issues. Getting electricity and cheap smartphones will enable poor people to have basic internet access.

Access to energy, especially modern sources, is a key to any development initiative The use of both traditional (biomass energy burned in conventional stoves) and modern (electricity and kerosene) sources improves household consumption and income, the return on modern sources is 20 to 25 times higher than that on traditional sources. The international community has long been aware of the close correlation between income levels and access to modern energy: not surprisingly, countries with a large proportion of the population living on an income of less than $2 per day tend to have low electrification rates and a high proportion of the population relying on the traditional use of biomass for cooking

Falling solar costs in Africa can drive solar boom on the continent as prices fall to $1.30 per watt for large-scale PV, and $1.90 per watt for mini-grids, finds new IRENA report. A report Solar PV in Africa: Costs and Markets, finds that solar home systems now meet the annual electricity needs for off-grid households in Africa for just $56 per year – which is already below the cost of traditional off-grid power sources such as diesel and kerosene, and prices are continuing to fall.

In Africa solar home systems (SHS) can be 60 to 250 times smaller than in Europe and America. African solar for homes are typical having a capacity of 20 to 100 W. In addition to having higher costs per watt due to their small size, these systems need to incorporate batteries and charge controllers. They also may include lights and appliances (e.g., radios, phone charging ports) which raise costs further. These small SHS, with their integrated lighting and appliances, and “plug-and-play” nature, more closely resemble consumer electronic products than residential solar PV systems in the OECD.

Small lower power solar products do not have the low cost per watt of large scale solar PV.

Amazon has a $40 LED lamp, phone charger system. It only has 1.6 watts of power

Amazon has $60 BigBlue 5V 28 Watt Foldable Outdoor Solar Powered Charger With SunPower Solar Panels Dual USB Ports for iPhone iPad Samsung Galaxy LG Cellphones Device This system still needs to paired with batteries and LED lights for an offgrid electrification solution.


A 100 watt solar panel costs about $100-110 on Amazon. This did not seem to have the phone charging connections.
LED lights can be had for as little as $10-20.


The IRENA report mostly talked about lead acid batteries

Solar power is still dropping in price.
Lithium ion batteries will have a surge in volume and dropping price as Tesla's Gigafactory ramps up.
Lithium ion batteries can last longer than the lead acid batteries which generally need to be replace every one to 3 years.




Volume production of improved version of the Big Blue mobile charging system, Tesla Lithium batteries and LED lighting could get to the following prices
$60 [28 Watts, LED lights, lithium batteries] by 2018
$40 [28 Watts, LED light, lithium batteries] by 2020
$30 [28 Watts, LED light, lithium batteries] by 2022, $60 could get 100 watts at that time

Here is where energy correlates to GDP per capita.

$5 per month (%60 per year) is affordable to most of the global poor, who spend that amount on kerosene and other energy


To figure out how many kilowatt-hours (kWh) a solar panel system puts out per year. multiply the size of the system in kW DC times the .8 derate factor times the number of hours of sun. So if you have a 7.5 kW DC system working an average of 5 hours per day, 365 days a year, it’ll result in 10,950 kWh in a year.

A 75 watt system would produce 110 kWh per year if it had 5 hours per day of sun.
A 28 watt system would produce 41 KWh per year if it had 5 hours per day of sun.

Energy access is a key aspect of enabling development.

100 KWh is how much per person electricity people at countries with $1000 GDP per capita have traditionally had.
A solar, lighting, lithium battery off grid solution could be providing that level of power for a one time $60 in 2024 (the cost of one years worth of kerosene or biomass for even the poorest people. The solar, lighting and lithium batteries can last for 5-9 years.
By 2026, repeated purchases $60 per person purchases of solar, lighting and batteries could accumulate to 1000 KWh of solar per person per year. This would be
the level of per person electricity for people who currently have about $5000 GDP per capita. Batteries are only needed to hold 10-15 hours to hold solar power overnight.

This means that by 2030, future purchasing power of energy, lighting, smartphones, lithium batteries will enable the equivalent of $5000 GDP per capita for most of the world. There will be some areas where conflict and other factors will block even off-grid energy and technology.

This would put the poorest in the world at the equivalent of todays global middle class.

100 KWh per year is about equivalent to the energy of those making $1000 per year in 2005. [$180 today for the solar with cellphone and device charging connections. $80 for the batteries, $40 for the LED lights. About $300]

It will take about 15-20 years to build the battery factories and supply chain to provide enough batteries (beyond batteries for electric cars) to electrify off grid power for developing countries at the $1000 per year equivalent GDP power level and another 10 years beyond that for batteries at the $5000 per year GDP power level. Still by 2050 there should be solar, batteries, LED lighting to achieve $5000 per person per year level for all people. This would be huge as a pathway to eliminate a key aspect of poverty - lack of electrification.

Not just elimination of extreme poverty ($1 per day of 1995 dollars, $1.25 PPP per day at 2005, or PPP $1.90 a day 2011) but getting people up to the what is todays upper middle income level. $10 PPP per day at 1995 dollars.

For the current 2016 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of
$1,045 or less in 2014;
lower-middle-income economies are those with a GNI per capita between $1,046 and $4,125;
upper-middle-income economies are those with a GNI per capita between $4,126 and $12,735;
high-income economies are those with a GNI per capita of $12,736 or more.


It is tougher for solar and batteries to make an impact on those in middle income countries because even more solar and batteries would be needed to scale beyond grid power.







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