By 2005, more than 2 million households in developing countries were receiving electricity from solar home systems. Most of these systems, and most of the global growth in recent years, is occurring in a few specific Asian countries (India, Sri Lanka, Nepal, Bangladesh, Thailand, and China), where the affordability problem has been overcome either with micro-credit or by selling small systems for cash, and where government and international donor programs have supported markets.*1 In each of these countries, hundreds or thousands of new household installations are now occurring monthly (10,000 per month reported in China in 2005). Total installations were more than 200,000 in 2004 alone. Indonesia has about 40,000 solar home systems installed through several donor programs, but macroeconomic diffi- culties of past years have dampened continued growth. Outside Asia, other large markets include Kenya,Morocco, and Mexico. The plans of a number of Latin American countries may shift solar home system growth towards that region if promising approaches to affordability, including government subsidies and/or fee-for-service models, continue to be followed.*2[N43]

Africa, with its very low rural-electrification rates and low per-capita income, has not seen significant growth in solar home systems, with the exception of a few countries. Kenya has 150,000 solar home systems, almost half of the installed base in Africa, and continuing market growth. Growth has been driven by cash sales of small modules to households in rural and peri-urban areas.Morocco is targeting 150,000 solar home systems by 2010. Uganda has a major 10-year program that targets solar home systems and other productive uses in education and health care. South Africa has been planning for several years to provide solar home systems to 200,000 rural households through "fee-forservice" concessions operated by private firms. Other countries like Mali, Tanzania, and Senegal are providing limited subsidies for rural renewables like solar home systems. In general, however, earlier expectations that millions of homes would obtain solar home systems in Africa have failed to materialize. Affordability is still a critical issue, as the cost of a typical low-end solar home system is high relative to average incomes in most African countries.

Solar home systems sales by private dealers have been the cornerstone of markets in five countries: China, Sri Lanka, India, Bangladesh, and Kenya. In China and Kenya, systems are almost exclusively sold for cash. In India, Sri Lanka, and Bangladesh, credit sales have improved affordability and fostered markets. Significant innovation is occurring with NGO-based microfinance, dealer-supplied credit, and consumer credit through commercial banks. In India, along with many cash purchases, credit for solar home systems purchases is now offered through more than 2,000 rural bank branches as part of a commercial solar loan program. Indeed, the estimated 120,000 solar home systems sold on credit in India, Sri Lanka, and Bangladesh during the past five years represents virtually the entire stock of credit-based installations worldwide. Kenya also has a very active private market, with more than 20 major PV import and manufacturing companies, and hundreds of rural vendors and urban distributors, many of which sell a range of brands.