Global Off-Grid Solar Sales Drop 11% In H2 2023, But East Africa Sees 14% Growth – Report

The global off-grid solar market saw a decline in sales of solar energy kits (SEKs) in the second half of 2023. According to the GOGLA Sales and Impact Report, the sales dropped by 11% compared to the same period in 2022, with a total of 4.6 million units sold. This reduction marks a step back from the peak of 5.2 million units sold in the second half of 2022. Despite this, the sales volume for 2023 was still 7% higher than the first half of the year, indicating some resilience in the market.

Out of the 4.6 million units sold, 2.94 million were cash sales, which experienced a 14% increase from the first half of the year, although they were still 7% lower than in the same period in 2022. On the other hand, Pay-As-You-Go (PAYGo) sales, accounting for 37% of the total, saw a minor decline of 2% from the previous six months. PAYGo sales of SEKs were valued at approximately $200 million, demonstrating the significant role this payment method plays in increasing access to solar energy for low-income households.

Among different solar energy products, solar lanterns, which represent 64% of total sales, performed relatively well, with 2.9 million units sold between July and December 2023. This marked a 17% increase from the first half of the year, with sales of smaller lanterns growing by 33% in particular. Larger lanterns with phone-charging capabilities maintained steady sales, with 42% of them sold via PAYGo systems. However, multi-light systems, representing 17% of global sales, saw a 15% drop in sales during the second half of 2023.

Solar home systems (SHS), which cover higher wattage products, experienced mixed performance. While sales of smaller systems (11-20 Wp) increased by 19%, systems in the 21-49 Wp and 100+ Wp ranges suffered declines of 15% and 5% respectively. The overall SHS market contracted by 5%, reflecting the challenges the off-grid solar industry is currently facing.

In terms of regional performance, East Africa remained the largest market, contributing over 2.5 million SEK sales, which was a 14% improvement over the first half of the year. However, this growth was marginally lower than the same period in 2022, reflecting a 1% drop. Kenya, the biggest market in East Africa, saw continued growth, with a 12% increase in sales compared to the first half of the year. Uganda also showed strong performance, with a 37% increase in SEK sales compared to the previous period.

West Africa also contributed to the global sales, though it experienced a slight decrease of 4% compared to the same period in 2022, with 886,736 SEKs sold. However, the market for key appliances such as televisions and fans remained strong in the region, with fan sales up by 18%. South Asia, on the other hand, struggled, seeing a 23% drop in SEK sales, while its appliance sales showed mixed results.

Overall, the global off-grid solar market faced headwinds in 2023, with sales volumes dropping from the peak levels seen in previous years. However, the increase in sales from the first to the second half of the year suggests that there is still demand for off-grid solar products, especially in emerging markets like East Africa. The report underscores the importance of continued investment and policy support to sustain growth in the sector and ensure access to clean energy for underserved communities.