Increasing energy access: the rise of pay-as-you-go solar and innovative financing partnerships

Abstract

Improving access to sustainable energy services and reducing the carbon footprint and deforestation of developing countries presents a substantial challenge to the development industry. This paper aims to critically assess two prevalent business models emerging to meet this challenge: financial institution–technology provider partnerships and the one-stop-shop, pay-as-you-go (PAYG) model. The authors find that collaborations between financial institutions and energy providers need to address grey areas such as product quality standards, marketing, and post-sales services, and incorporate feedback loops to continually evaluate the performance of the partnership. Pay-as-you-go presents an intriguing business case to leapfrog more traditional energy access programmes. However, more robust results from the field need to be reported before the PAYG movement can claim success. Ultimately, collaborative and integrated actions by all stakeholders are needed to achieve universal energy access.