In many markets, the rooftop solar sector is expanding quickly and setting new records for annual megawatts installed. The residential solar market in Australia is a great illustration of what is possible. According to a report released in March of this year by Australia’s Ministry for Industry, Energy, and Emissions Reduction, rooftop solar in Australia broke records for the fifth straight year in 2021. Australians installed roughly 380,000 new systems with a combined capacity of 3.2 gigawatts (GW) in 2021. Australia now has solar on more than 3 million rooftops, bringing the total installed capacity to an amazing 17 GW! Australia invested $7.4 billion, or $284 per person, in renewable energy last year. According to Minister Taylor, this puts us in front of nations like Canada, Germany, Japan, France, China, and the United States on a per-person basis.
The UK market is another one that is setting new records. From January to June of this year, In the UK, 164 megawatts (MW) was put on rooftops of private residences. This total—placed in just six months—was greater than the cumulative number of MWs installed in 2021! Despite all the sunshine on the continent of Africa, most of the continent has not experienced this level of growth, particularly in southern African nations like Zimbabwe, where residents experience daily outages for hours at a time as the power provider battles to keep up with demand. Therefore, a load-shedding program must be implemented by the utility company. In order to prevent a complete blackout, load-shedding is a controlled mechanism that reacts to unanticipated situations (such as demand surpassing available capacity).
The key to accelerating the uptake of rooftop solar may lie in financing mechanisms for urban rooftop solar. Although the cost of solar panels and battery storage has decreased dramatically over the past ten years, many families still find the overall upfront cost of the systems needed by the majority of middle class urban residences in countries like Zimbabwe to be rather expensive. Using a 3 kVA hybrid inverter in conjunction with 5 kWp of solar panels and a 4.8 kWh LFP (LiFePO4) stationary storage battery pack is an illustration of a common combination in this market. During load-shedding, these systems are employed to power crucial loads. Wi-Fi routers, refrigerators, TVs, laptops, lights, and booster pumps to pump water from water storage tanks in their backyards into the residences are essential loads. Due to the widespread practice of water rationing in the major urban areas, many residences there often have 5,000- to 10,000-liter water storage tanks in the backyard.
Since most people in emerging markets often earn less than those in developed countries, many families find it impossible to install rooftop solar. The range of available funding solutions is also extremely constrained. It can be difficult to credit check potential clients in the local market. Across order to accelerate the adoption of home solar in Africa, starting with Zimbabwe, Umlilo Energy is using the expanding remittance market. Most likely, those living in industrialized countries with greater salaries will be in a far better position to buy these solar products for their parents and other kin back home.
Although diaspora remittances are increasing across the continent, the majority of them are used to help relatives and friends with daily costs including transportation, groceries, tuition, and healthcare. Even while some remittances are used for household development initiatives, a sizable portion still goes toward household consumption. By swinging the pendulum away from consumption and toward investments in development initiatives that provide income, there is a chance to achieve increase the dividend of remittances . Investments have the potential to generate reliable and enduring income that is not utterly dependent on the ability of the remitters to generate income and send money home. This is a crucial step in helping recipients overcome the dependency syndrome.
Umlilo is putting itself in a position to encourage and push the profitable and sustainable use of remittances for the renewable energy industry and other projects. This might significantly contribute to realizing the full potential of the African continent’s residential rooftop solar market. The UK-Zimbabwe corridor serves as its primary market. Many Zimbabweans living in the UK regularly send money back home. Remittances from the diaspora are currently Zimbabwe’s main source of foreign money. Zimbabwean expatriates who live and work in the United Kingdom, Southern Africa, the United States of America, and other countries sent $1.4 billion to Zimbabwe last year. There will be more corridors added to Umlilo soon.
Umlilo was created in the year 2019. Most of its customers so far have been middle-aged Zimbabweans who are employed in the UK and who are paying to install solar and battery storage systems for their elderly parents back home. Both urban areas and rural regions are seeing these systems implemented. Umlilo can more easily evaluate potential customers when offering payment plans over a set length of time thanks to the accessibility of simple credit score checks on sites like ClearScore in the UK.
Over the years, Umlilo has expanded through recommendations and word-of-mouth, and it is currently trying to scale its business. Additionally, Umlilo wants to be more involved on other platforms, such social media groups. The diaspora community typically has a large number of chat groups on Facebook and WhatsApp where people discuss problems with and opportunities in their home country.
In order to serve those who live in rental apartments, Umlilo is also putting the finishing touches on plans to introduce modular and portable solutions. Additionally, Umlilo is attempting to finance what it refers to as “business in a box” solutions. A solar water pump kit, which is almost plug-and-play for farmers in the horticultural industry, is an illustration of this. These plug-and-play systems will assist rural farmers with land access in using their half-hectare plots to cultivate well-liked income crops like paprika. Large local and international organizations fund out-grower systems, which provide good assistance for the horticultural industry. Small-scale farmers can make profitable investments in this sector of the agricultural economy thanks to the support system and accessible market of crop off-takers. As a result, more farmers will be able to sustain payments for these financed business-in-a-box solutions with monthly income.
All pictures are from Umlilo.
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