Authors: Jubing Ge, Robin Gravesteijn, Mayank Kumar Jain, UNCDF

Almost 80 percent of the Ugandans lack reliable electricity. This means they can't light their homes or run their businesses. The use of traditional fuels such as kerosene also comes with health risks and fire hazards.

Off-grid solar lamps and systems are often seen as an appealing and viable energy solution. This is especially the case when combined with mobile money technology. Yet, there are several questions remaining on the digital energy finance market. This includes:

• How effective and fast the digital energy finance markets are expanding;
• Whether they reach out to low income, rural and remote populations; and
• Whether they improve customer’s quality of life

Pay-as-you-go (PayGo) is an innovative financing method that allows end-users to pay digitally for solar energy home systems using small instalments on a daily, weekly or monthly basis.In theory, PayGo technology can revolutionize the energy sector. It can allow low-income people to afford larger off-grid energy systems because they can rent, lease or borrow those systems from energy service providers and pay them off remotely using mobile money in small instalments.

But what is the story in practice? There remains limited information on the development of PayGo solar market in Uganda particularly regarding customer outreach, expansion areas, and impact. To close those information gaps, the United Nations Capital Development Fund (UNCDF), in partnership with the Uganda Solar Energy Association (USEA), the Dalberg Data Insights (DDI), and the Schatz Energy Research Center (SERC), conducted a Big Data action research. With DDI, we developed a digital energy finance dashboard for more than 672,000 off-grid customers in Uganda. We also supplemented the big data insights with a structured survey conducted by the SERC on 424 off grid customers tracked over the same period 2016 to 2018.

This blog series will offer insights on:

• Market availability and expansion
• Customer purchasing behaviours and energy financing
• The impacts of off-grid solar on energy access improvement in Uganda

The Digital Energy Finance Dashboard

This project leveraged anonymized mobile money transaction data from 2016 to 2018. It represents 75 percent of the Ugandan digital finance market, and covers more than 672,000 solar PayGo customers. To navigate such large volumes of data, we developed an interactive digital energy finance dashboard. This dashboard aggregates, visualizes, and summarizes penetration and growth patterns of solar PayGo in Uganda.

The dashboard allows users to track Solar PayGo transaction activity by selecting certain filters, including geographic regions, periods of time, and energy service providers. This dashboard enables users to quickly and easily access Solar PayGo business performance data for the first time.

We hope the dashboard insights will help energy service providers with market and product development, and support policymakers to make informed decisions and improve energy access in Uganda.

Big Data Insights on Market Scoping and Energy Product Development

The dashboard has already produced some actionable insights. This includes:

• The Uganda solar PayGo market is much larger than initially expected. There are around 672,000 customers accessing solar PayGo in 2018, and around 1 million customers in the entire market.
• The number of customers has grown rapidly at 138 percent in 2017 and 160 percent in 2018. Solar PayGo uptake is stronger in areas such as Nakaseke with high mobile money adoption.
• There is room for expansion as only 12 percent of the households are currently served and there are only 10 districts with more than 5,000 active PayGo customers.

Stay tuned for more insights in our next blog!

About UNCDF work on Energy

The UNCDF programme focused on energy contributes to achieving SDG 7 on affordable and clean energy for all, and SDG 8 focusing on decent inclusive work, economic growth and, more specifically, financial inclusion. The Programme aims to improve access to clean energy finance for poor and low-income people. By partnering with energy and financial service providers and offering capital, data analytics, capacity building, and policy advocacy services in the off-grid energy finance markets, UNCDF CleanStart has scaled energy business models for cleaner, efficient and more effective sources of energy for poor people. As of 2019, UNCDF digital energy finance activities have enabled over 375,766 low-income families and small-scale businesses to access renewable energy technologies (RETs) through micro and PayGo financing.

UNCDF Energy Access work is supported by: