The limits of ‘leapfrogging’

Many western donors love the idea that instead of dirty, coal-fired power-plants, poor nations should ‘leapfrog’ straight to cleaner energy sources such as off-grid solar technology. The World Bank is at the forefront of these efforts, no longer funding coal energy projects.

Off-grid solar projects begin with grand intentions, but too often end with recipients barely better off. We can see this in the small Pacific island nation of Fiji, where the government – advocates of strong global climate policy – teamed up with a Japanese technology company to deliver off-grid solar power.

In the village of Naceva, individual household solar energy systems were provided. But only 15 households out of 42 took part, because the installation fee (about $50) was far too high for the locals to afford. In Fiji, nearly half of the population lives on less than $5.50 a day.

In Rukua, a centralized solar unit was provided. Prime Minister Frank Bainimarama proudly declared he had “no doubt that a number of development opportunities will be unlocked” by the provision “a reliable source of energy”.

Understandably, all of Rukua was thrilled to get energy access and wanted to take full advantage. So more than 30 households purchased fridges.

Unfortunately, the off-grid solar energy system was incapable of powering more than three fridges at a time, so every night the power would be completely drained.

That led to six households buying diesel generators. According to researchers who studied this project, “Rukua is now using about three times the amount of fossil fuel for electricity that was used prior to installation of the renewable energy system.” In rather understated language, the researchers conclude that the project did not “meet the resilience building needs” of either village.

This experience isn’t unique. When Greenpeace created the first 100%-solar powered community in Dharnai, India, it provided locals with expensive power that drained the system’s batteries within hours. Dharnai residents protested at being given “fake electricity”, and demanded successfully that the government supply it with “real electricity” from the coal-powered electricity grid.

Globally, the International Energy Agency expects that 195 million people with off-grid solar will get a meagre 170kWh per year – that’s half of what one US flat-screen TV uses in a year.

The first rigorous test published on the impact of solar panels on the lives of poor people found they got a little bit more electricity, but otherwise there was no measurable impact on their lives: they did not increase savings or spending, did not work more or start more businesses, and their children did not study more.

Off-grid solar panels can power a single light or a cell phone. In some situations, especially where fossil fuel solutions can’t reach, that can play an important but limited role. The benefits of solar are higher than zero. But in Rwanda, researchers recently found that the household’s benefits of solar energy (their so-called “willingness to pay”) were much less — between 30 and 41 percent — of their cost. Developing country households will of course accept solar panels if handed out for free, but they are doing less good than their cost.

Moreover, solar panels are mostly useless for tackling the main power challenges of the world’s poor. Three billion people continue to suffer from the dangerous effects of indoor air pollution, burning dirty fuels like wood and dung to cook and keep warm. Solar panels don’t solve that problem because they are too weak to power clean stoves and heaters. Nor can off-grid solar panels power machinery for agriculture or factories that create jobs and pathways out of poverty.

Indeed, a study in Tanzania found almost 90 percent of households with off-grid electricity wanted —like the citizens of Dharnai — to be hooked up to the national grid, typically powered by fossil fuels. Prime Minister Bainimarama’s faith that off-grid energy could unlock development opportunities was always misplaced.

Many Westerners would love to believe that solar outcompetes fossil fuels, but typical case studies highlighted by boosters only look at the costs when the sun is shining, ignoring what to do at night when citizens in Fiji and Dharnai ran out of power. The International Energy Agency finds that when correcting for intermittency, existing coal power remains cheaper than new solar everywhere at least until 2040.

Moreover, there is a strong, direct connection between more power and less poverty. A study in Bangladesh showed that grid electrification has significant positive impacts on household income, expenditure, and education. Electrified households experienced a 21 percent average jump in income and a 1.5 percent reduction in poverty each year.

If we want to solve global warming, we should invest much more in research and development to innovate down the real cost of renewables below fossil fuels. That way everyone will eventually switch. But telling the world’s poor to live with unreliable, expensive, weak power is an insult.