Distributed renewables for energy access (DREA)i systems are renewable-based systems (stand-alone and off-grid systems as well as mini-gridsii) that generate and distribute energy independently of a centralised electricity grid. DREA systems provide a wide range of services – including lighting, operation of appliances, cooking, heating and cooling – in both urban and rural areas of the developing world. These systems represented about 6% of new electricity connections worldwide between 2012 and 2016, mainly in rural areas.1 In some countries, DREA technologies play a key role in fulfilling the energy needs and enabling the livelihoods of millions of people living in rural and remote parts of the world.


of new electricity connections worldwide between 2012 and 2016 were provided by off-grid and mini-grid renewable energy systems.

In places where the electric grid does not reach or is unreliableiii, DREA technologies provide cost-effective options for generating electrical and mechanical power, heating water and space, cooking and baking, and enabling various productive uses. For example, about 13% of the population of Bangladesh gained access to electricity through off-grid solar systemsiv, while 51% of the off-grid population of Kenya is served by DREA systems.2 ( See Figure 38.)

Source: See endnote 2 for this chapter.

DREA systems traditionally have provided basic services such as lighting and cooking to off-grid communities. However, because of their increasing reliability, short installation time, improved cost-benefit ratio and the emergence of financial schemes that reduce the upfront cost burden, DREA systems increasingly are being considered as either a complement to or, in some situations, a substitute for centralised power generation, with the added benefit of reducing dependence on fossil fuel imports.

In remote areas with low population densities, DREA systems can be the fastest and most cost-effective means for providing people with electricity, making these systems a compelling proposition for achieving energy access goals quickly.3 In countries such as Kenya and Uganda, the number of off-grid systems deployed in 2016 outpaced the grid connections achieved by rural electrification agencies and national utility companies.4

DREA systems offer an opportunity to accelerate the transition to modern energy services in remote and rural areas, while also offering social, environmental and economic co-benefits such as:

reduced chronic and acute health effects

improved lighting quality for households

increased school retention and improved grades for children

increased income for small and medium-sized businesses and

reduced negative impacts on forests.5

In 2017, an increasing number of national governments demonstrated their interest in DREA systems by enhancing the enabling environmenti.6 In the off-grid solar market, sales of smaller devices (for example, solar lanterns) decreased in 2017.7 At the same time, the market for larger systems continued to grow, building on the momentum of pay-as-you-go (PAYG)ii sales in the traditional East African markets and on a significant increase in sales in new West African markets, although these systems still supply a small proportion of overall off-grid solar customers.8 Investments in off-grid solar companies decreased slightly despite an increase in the capital raised by PAYG companies.9

This chapter reviews the current status of and trends in DREA in developing and emerging countries and presents an overview of the major programmes and initiatives that were launched or were operational in 2017.

iSee Sidebar 9 in GSR 2014 for more on the definition and conceptualisation of DREA. Note that the GSR has started using the acronym DREA to distinguish from distributed renewable energy that is not necessarily linked to providing energy access.i

iiThis chapter does not distinguish between mini- and micro-grids. For more details, see the glossary at the end of the report.ii

iiiUnreliable is defined here as delivering electricity for less than 12 hours per day.iii

iv"Solar systems" throughout the chapter refers to solar PV systems, unless otherwise specified.iv

vFor example, putting in place supporting legal and regulatory frameworks, appropriate financing mechanisms and sufficient overall investment, as well as strong partnerships between public and private actors. v

viWith the PAYG model, customers usually make a small deposit for the installation of the system and then pay regular instalments through mobile payment systems. PAYG has two main approaches: energy as a service approach whereby the customer pays for the electricity provided and does not own the system, and the lease-to-own model whereby the customer becomes the owner of the system after a period of time. The lease-to-own model is the most prominent one.vi

Overview of Energy Access

Technologies and Markets

Investment and Financing

Business Models

Policy Developments

International Initiatives and Programmes