Mini grids vs solar home systems: Complimentary not competing

The definition of a mini grid, also sometimes referred to as a micro grid,  is an independent electricity generation station that sometimes includes an energy storage component that supplies electricity to a localized network.  In the energy access context, mini grids are installed in areas where there are economic, geographical or other constraints to extending the main grid to these areas.
GIZ mini grid in Talek
The Talek mini grid in Talek, Narok County, Kenya. GIZ and other partners constructed the power plant which will connect residents of Talek town to power for domestic and industrial use.
 A solar home system(SHS) is also an independent energy generation and storage solar system but it’s generating and storage capacity is much smaller than that of a mini-grid and, in most cases, serves one consumer. SHSs can power varied devices ranging from a study lamp to DC appliances like DC fans or televisions.
MKOPA Solar Home System
A Solar Home System manufactured and sold by MKOPA in Kenya

Electricity is up there with other infrastructure like roads in terms of how important it is in stimulating development. That said, one of the questions that should be asked after the data on electrification in Sub-Saharan Africa is examined is what is electrification in the context of “bottom of the pyramid” consumers.

Some opponents of solar home systems argue that giving someone a solar lamp is not enough since the person cannot run productive loads from a DC solar home system. Consequently, having the lamp does not improve their income generating capability. On the other hand, consideration has to be given to the reality that some households and small businesses only require enough electricity to light a few bulbs or charge their phones. Given the minimal earnings of the majority of these households and businesses, buying and/or running appliances like fridges is very low on their priority list. For this market segment, moving from toxic energy sources like kerosene lamps to cleaner (and perhaps cheaper) energy sources is an improvement to their quality of life and that is enough.

Mini grids require some factors to work well. One, the mini-grid customers have to be relatively close to each other to minimize the electricity distribution costs. Also, the consumers need to be able and willing to pay for the electricity. What makes it tough to find good mini grid sites in most SSA countries is that villages/towns that fulfill these criteria are usually already earmarked for connection to the central grid by the government/main utility.

In most off-grid villages/towns in East Africa, where there is a lot of action in the mini grid space, these three criteria are not always met. Most villages consist of a commercial center that serves many households within a several kilometer radius. The households and businesses at the commercial center usually have more purchasing power than the households surrounding the center. In some cases, the buildings in these commercial centers are relatively close to each other. This makes the commercial centers a good target for mini grids. The surrounding households, however, are either too far for connection to the grid to be financially viable or the households too poor to afford the electricity costs.  In such cases, a combination of mini grids and SHSs ensures that people are presented with options.

This benefits the mini grid operator since they don’t end up spending a lot of money connecting a customer who, though interested in a cleaner modern energy source, can only afford to light a bulb or two and maybe charge a phone and power a radio. And while a mini grid operator may not be interested in getting into the business of distributing SHSs, the operator could get into a partnership with a SHS provider to serve that market segment.

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