Rising Prices of Kerosene Oil to Aid Adoption of Off-grid Solar Lighting Products

Due to the underdeveloped grid infrastructure and power generation facilities in developing regions, the demand for alternative modes of energy is substantially increasing. According to a survey, in 2013 approximately 18% of the world’s population was deprived of electricity. As a result of this, the dependence on solid and liquid fuels such as wood, coal and, kerosene increased at a significant rate. To decrease the pressure on solid and liquid fuels, and cut down the annual costs incurred on lighting, both developing and developed countries are focusing on the development of high-end off-grid solar lighting systems. Concerns regarding the depletion of non-renewable resources are expected to further drive the adoption of off-grid solar lighting techniques.

According to a report published by Transparency Market Research, the global off-grid solar lighting market is expected to rise at a 17.56% CAGR between 2016 and 2024. Geographically, Asia Pacific dominated the global off-grid solar lighting market in 2014 with a market worth US$365.09 mn. It is expected to maintain a lead and to rise to a valuation of US$2,294 mn by 2024.

How will developing countries play a role in the growth of the off-grid solar lighting market?

One challenge that developing nations are currently facing is providing electricity to remote and rural areas. The mounting costs of kerosene and other energy sources such as coal and wood are impelling consumers towards the adoption of alternative sources of energy. Governments of countries in Asia Pacific, Africa, and Latin America are taking initiatives to shift their dependence directly on off-grid solar lighting sources. As off-grid solar lighting systems are reliable and cost-effective, their demand is considerably increasing in developing countries. Moreover, development of innovative solar portable devices, grid infrastructure, and high penetration of mobile phones in Africa and Asia Pacific is further expected to boost the demand for off-grid solar lighting equipment.

For instance, recently, a London-based off-grid solar lighting systems provider, BBOXX Ltd., raised US$20 mn to enhance the off-grid solar infrastructure in Africa and to develop the grid infrastructure in various remote areas of the region. The company aims at covering areas in Rwanda, the Ivory Coast, Nigeria, Kenya, and Cameroon.  

What factors are likely to impede the adoption of off-grid solar lighting systems?

Developing regions such as Africa, Latin America, and Asia Pacific have an underdeveloped grid infrastructure. Problems related to financial access and funding to develop and set up off-grid solar lighting systems in these regions are likely to restrain the growth of the global off-grid solar lighting market. Lack of proper distribution channels and transportation facilities are further likely to restrain the demand for off-grid solar lighting systems. Moreover, the absence of enough knowledge among consumers regarding the use and benefits of off-grid solar lighting is another factor that is likely to negatively impact the adoption of off-grid solar lighting systems in the coming years.

Are there any specific areas that deserve greater focus on the part of companies in the off-grid solar lighting market?

Manufacturers of off-grid solar lighting systems are likely to gain lucrative growth opportunities from the rising demand for solar lantern systems and solar home systems from developing regions. Ongoing research and development activities for the development of technologically advanced off-grid solar lighting systems are also likely to provide potential growth prospects to manufacturers.

The key players operating in the global off-grid solar lighting market are OSRAM GmbH, Koninklijke Philips N.V., Niwasolar, Tata Power Solar Systems Ltd., SunnyMoney, and BBOXx Ltd. among others.


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