Impact of Covid on the off-grid energy sector

Saturday July 11 2020



J. Namuyanja

J. Namuyanja 

By J. Namuyanja

Uganda registered its first Covid-19 case in March, setting off a series of weekly government directives that led to the redefinition of life, work and social interaction as we know it. As the government directed people to stay home and safe, non-essential businesses had to shut down while essential ones were reduced to operating with a thin human resource under stringent standard operating procedures.

Public and private transport was banned, shopping centres were closed and international borders closed for all passenger travel. This chain reaction has created fear in the community and curtailed movement, thus lowering public spending. Many people are crying foul due to the worsening economic situation.

Renewable energy companies, especially those dealing in solar products and services, have not been left out. With unclear government directives on whether solar service providers were an essential service, solar companies and their clients were left stranded. During the lockdown, many people were compelled to work remotely or their work stations were closed, which affected their operations and cash flows.

Suddenly, technicians could not reach clients to provide maintenance and servicing support while many clients remained unable to buy new solar products or even remit their monthly instalments on existing ones.
These challenges were part of the findings from members needs assessment in a survey by the Uganda Solar Energy Association (USEA) between April to May 2020, to gauge the impact of coronavirus on the solar energy sector.

The above trend of events prompted solar energy companies to rethink the way they do business, finding new solutions such as use of call services, online outreach like email and social media and site visits to support customer service requests and make new sales. These measures were, however, limiting since many clients are not active on social media and the solar energy was not listed among the essential services.

With most solar energy products being sold on credit to the informal sector, companies had to further improvise by offering grace periods to clients and revising payment plans to better manage debt collection. Through such solutions, many rural Ugandans have over time been able to access their energy needs and engage in business for longer hours hence contributing to Uganda’s economic growth.

Advertisement

For the health sector, off-grid solar energy has become a breath of fresh air given its ability to power operations in last mile rural communities that are nowhere close to accessing on-grid electricity due to poor infrastructure and high cost of connection . With schools closed and many communities having no access to print media, children can learn through affordable solar-powered televisions and radios.

Access to energy for many rural Ugandans is estimated at only 8 per cent according to the Rural Electrification Agency (REA), which hampers enterprise development and improvement of livelihoods. The situation has been compounded by recent media reports that 200,000 Ugandans would remain without power due to failure by REA to pay power distributor Umeme $25m for earlier completed connections under the Electricity Connections Policy.

Development partner support has also been affected by corona virus, which brought many projects to a standstill and reduced demand for on-grid electricity.
With governments recognition of energy as critical for the realisation of Uganda’s Vision 2040 and the attainment of middle-income status (NDPII), off-grid solar energy becomes more essential today than ever before.

Advertisement