Misguided and inappropriate safeguards threaten to handicap some of the most dynamic and innovative approaches to ending energy poverty for 1.3 billion people around the world.
That the findings of Sierra Club’s latest report -- Expanding Energy Access: Beyond The Grid -- which proposes five policy principles to ensure clean energy access markets thrive.
If we don’t fill the vacuum of safeguards that exist for companies serving those living beyond the reach of the grid, we threaten the long term viability of these beyond the grid clean energy markets. These approaches are already pioneering cutting-edge Machine to Machine (M2M) technology, dynamic financial innovations like pay as you go (PAYG), and even big data to unlock clean energy for low-income populations. That’s all while unlocking tremendous economic opportunity in a $12 billion market.
But all of that is threatened if policymakers don’t set appropriate rules of the road. Without rules, we all but ensure that those most in need of energy solutions pay the price for the most expensive electron -- the one that isn’t delivered. An outcome no one wants to see because without access to electricity, communities may suffer from poor healthcare and restricted opportunities for economic advancement.
In order to ensure these markets continue to grow rapidly and deliver for low-income populations, we’ve identified five principles for policymakers to abide by:
1. Energy Services Not Electrons: It was the LED light bulb, not just the falling price of solar, that unlocked clean energy for low-income populations by bringing down the size of all components in a solar home system. It’s vital we apply that principle -- that energy efficiency unlocks clean energy for low-income populations -- to the next steps of energy service delivery. That means supporting the deployment and development of highly efficient appliances and agricultural equipment.
2. Build Markets From The Bottom Up: Starting with ‘pico’ power -- like solar lanterns and solar home systems -- populations get onto the energy ladder by displacing existing expenditures on dirty kerosene lighting. Lighting, however, is the beginning, not the end, of energy access. As people move up the energy ladder to higher levels of access, policymakers should transition deployment support to full access technologies like mini-grids and larger solar home systems.
3. Level The Playing Field With Fossil Fuels: Right now, clean energy access providers are getting hit both coming and going. Their competitors -- fossil fuel companies -- are highly subsidized, but clean energy companies are taxed. Policymakers should seek to direct fossil fuel subsidies directly to low-income populations and gradually eliminate the fossil fuel industry’s support over time (see Michael Liebrich’s paper on this here). At the same time, policymakers should focus on reducing taxes, like value added taxes (VAT) on solar products, which hinder our ability to end energy poverty.