Decentralized power generation — typically based on solar home systems and mini-grids — is the best bet to eradicate energy poverty among people in more isolated rural areas
Think about a time when your electricity went out. As you sat in the dark, maybe you wondered how long it would be before you could power up your computer again. Or perhaps you considered what you could make for dinner that didn’t require cooking.
Many people in Africa don’t need to imagine such a scenario — they live it. Every day.
A large portion of the continent, primarily in sub-Saharan Africa, lacks access to reliable and affordable electricity. This energy poverty represents a major barrier to improving the quality of life for nearly 600 million people and achieving sustainable development goals across the continent. In fact, Africa is the most energy-deficient continent in the world, with 75% of the world’s population lacking electricity. And although urban dwellers aren’t completely shielded from power outages, the extent of energy poverty is much more intense for rural populations.
Without reliable electricity, daily life can be challenging. Basic tasks like studying, working, and cooking become more difficult and time-consuming — if not downright hazardous. Relying on kerosene lamps or candles for illumination can be dangerous, both as a biohazard and a fire risk. These fuels are often inefficient and can lead to health problems like respiratory diseases and eye infections. The use of traditional fuels such as wood and animal dung for cooking and heating indoors releases harmful pollutants, leading to indoor air pollution. This is a major cause of respiratory illnesses and premature deaths, especially among women and children.
On a macroeconomic scale, energy poverty hinders economic development and limits access to basic human services like health care and education. Without power, essentials like refrigeration and medical equipment cannot be used. Businesses and industries that lack reliable power cannot operate efficiently, resulting in economic stagnation and stunted job creation. Energy poverty exacerbates social inequalities, as those with access to electricity have better opportunities for education, health care, and employment.
The State of African Energy 2025 Outlook, recently published by the African Energy Chamber (AEC), names three main challenges that African countries face in achieving universal access to electricity:
- •Expanding electricity access
- •Ensuring that energy remains affordable
- •Reducing dependence on fossil fuels, such as firewood and diesel generators used for lighting and cooking.
To combat these challenges, African countries are exploring a variety of solutions, including expanding access to electricity grids, promoting renewable energy sources like solar and wind power, and improving energy efficiency. However, significant challenges remain, including the high cost of infrastructure, limited financial resources, and a lack of technical expertise.
The Key? Decentralizing Power
In a sense, Africa is lucky: It’s sitting on a veritable goldmine of solar and wind potential.
To make sure that we maintain efforts toward universal electrification across the continent, it will be critical to continue securing public funding
With its vast expanse of deserts and coastlines, Africa is blessed with abundant sunlight and strong winds. This makes it an ideal location for harnessing solar and wind energy. Many regions receive intense sunlight year-round, creating the ideal conditions for large-scale solar power plants. Meanwhile, the continent also boasts long coastlines and elevated areas that experience strong and consistent winds, making them suitable for wind power generation.
While there are challenges with renewables, such as the need for significant investment and infrastructure development, today’s technology is advancing so rapidly that costs for renewables are becoming sustainable. This offers a unique opportunity to electrify Africa, in both urban and rural regions.
Until recently, efforts to electrify Africa have mostly relied on extending traditional grid connections and centralized power distribution. And investments to modernize and expand power grids are great — for people in urban centers. Unfortunately, these traditional grid situations do little for people in more isolated rural areas.
As we point out in our 2025 Outlook report, decentralized power generation — typically based on solar home systems and mini-grids — is the best bet to eradicate energy poverty among people in more isolated rural areas. As we see it, decentralized systems will be key for universal electrification. By decentralizing power generation, Africa can secure a sustainable energy future and improve the lives of millions of people.
Standalone power systems or localized power networks (otherwise known as “mini-grids”) have become efficient means of power that utilize solar in combination with battery storage and backup generators. These solar home systems are proving their worth in electrifying individual households in rural areas. As our report notes, we anticipate that options like these will be an increasing feature of the African power landscape as renewables penetrate the generation mix.
We are also seeing a dramatic uptick in off-grid systems to fill in the gaps left by the centralized grids. Our report found that Africa accounts for over 16% of the global decentralized renewable capacity, and off-grid solar solutions have as a result provided power to millions across sub-Saharan Africa.
Solar accounts for nearly 80% of Africa’s decentralized renewable capacity. Solar home systems generally include a small solar panel and a rechargeable battery that powers lights, radios, and phone chargers, while on a greater scale, mini-grids and smaller, more localized microgrids are used to supply power to entire communities. Solar home systems and solar mini-grids have become increasingly successful in Africa, with installations being ramped up 12 times and 45 times respectively over the last decade.
By 2022, over 77 million people and nearly three million people on the continent gained access to electricity through solar home systems and solar mini-grids respectively.
Where Is the Money Coming From?
Because of the high upfront costs associated with installing solar panels, many decentralized connections in rural Africa have been financed through innovative pay-as-you-go (PAYG) programs. PAYG models enable people with limited income to access solar power by breaking down the cost into smaller, manageable payments.
To make sure that we maintain efforts toward universal electrification across the continent, it will be critical to continue securing public funding. The AEC encourages collaborative efforts from governments, the private sector, and development banks to lower costs for developers and ensure the success of these large-scale decentralization projects.
Our report highlights African Development Bank’s Desert-to-Power initiative, which is combining its own funds with those from international sources such as the Green Climate Fund and several European governments to install 10 GW of solar power across 11 countries by 2030. If all goes as planned, some 250 million people will finally have access to reliable electricity.
At the same time, we urge leaders and policymakers to ensure the financial sustainability of national subsidies that will help make these decentralized technologies more affordable for even more households, in both urban and rural settings.
The author is the Executive Chairman of African Energy Chamber.
All views expressed here are the author’s own and do not necessarily reflect the editorial stance of The Kenyan Wall Street.
