Hard times for pay-as-you-go model

According to the Global Off-Grid Solar Market Report – Annual Sales & Impact Data 2024, published on May 26, 2025, by GOGLA, 9.3 million solar kits were sold last year by companies affiliated with the network. This marks a slight increase from 2023, but remains below the record level reached in 2022.

It’s a muted rebound, even as demand remains high in areas not connected to national grids—especially in Sub-Saharan Africa, where East Africa led the global market in 2024.

More broadly, at the global level, the sector has yet to recover the momentum seen before the 2021–2022 crisis, which made financing more difficult and slowed off-grid market development. Nevertheless, GOGLA highlights the sector’s resilience in a context marked by inflation and growing financial pressures on the target households.

According to the report, an estimated 20 million additional people gained access to electricity through a solar kit purchased in 2024.

Although most kits are now sold for cash, a significant portion of off-grid solar systems are still distributed through the pay-as-you-go (PAYGO) model, which allows households to pay instalments over several months. Promoted as a tool for inclusive energy access, this approach has drawn companies from other sectors—such as digital and telecom—into the energy space. But it relies on customers’ ability to make regular repayments in economies that are often fragile, marked by instability, inflation, and irregular incomes.

The model also faces a key limitation: households have little room to increase spending on electricity, and off-grid solar often remains more expensive than grid-based power—when that option exists.

Sales trends suggest this model may have hit a structural ceiling: when purchasing power declines or stagnates, even microloans can become unaffordable. For some observers, this raises questions about the long-term viability of a model that relies on the indebtedness of the most vulnerable households.

In light of these limits, results-based financing (RBF) and similar impact-driven funding mechanisms are increasingly seen as essential—not just helpful tools, but necessary levers for the sector’s future. These mechanisms allow companies to rely on more flexibility and to provide more accessible products.

Sarah Malm, Executive Director of GOGLA, underlines the importance of these subsidies and insists that “greater clarity and long-term stability in the implementation of these mechanisms is urgently needed.” Subsidies make it possible to reduce the final cost for users without undermining the financial viability of operators—though the money involved often comes from public funds. But these instruments require structured, long-term commitments from donors and public authorities—something not always easy to secure.

The report stresses the crucial role of international donors in structuring such funding models, which depend on sustained engagement. In 2024, a joint initiative by the World Bank and the African Development Bank—aiming to provide electricity to 300 million people by 2030—could pave the way for new subsidy mechanisms for household solar kits and related appliances.

For the first time, the report also includes data on two types of productive-use equipment: solar generators (38,000 units sold) and walk-in solar cold rooms (578 units sold) in 2024. These systems, mainly used in commercial or agricultural activities, reflect the market’s gradual expansion toward the so-called “productive” segment (according to GOGLA) — less reliant on household financing and potentially more transformative for local economies.

In Africa, these applications include crop preservation, rural cold chains, and powering small businesses or workshops—sectors that many actors see as strategic. GOGLA concludes by calling for greater engagement from companies to contribute more complete sales data to future editions of the report, in order to better inform public policy and investment strategies.