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Solar energy offers a solution to healthcare centres reliant on diesel generators.
Nearly a billion people depend on healthcare centres that have no reliable electricity.
As a result, life-saving procedures can be delayed, carried out in the dark, or under precarious handheld torchlight.
While securing electricity access has previously required a one-off product procurement, Energy-as-a-Service now offers a viable and accessible way to meet – and crucially – maintain off-grid health facilities’ long-term energy needs.
Meeting and maintaining energy demand in healthcare settings
Electricity is a matter of life or death during medical emergencies. In off-grid, remote or underserved communities, health centres frequently rely on costly and environmentally harmful diesel generators for energy to perform emergency procedures.
Often people wait for daylight to seek medical attention, unwilling to risk diagnosis or surgery in the dark.
Strong evidence shows off-grid solar directly improves patient care and operations in remote health clinics, as highlighted by the World Resources Institute case study in Kenya.
Yet, despite a clear and urgent need, providing reliable power to health centres continues to be a challenge for governments, NGOs, and development agencies.
Funding challenges
Limited funding is available to expand grid access or create standalone, distributed power systems.
Where funding is available, solar installations have traditionally been purchased on a single-procurement basis, which does not support the ongoing operation of the system.
The single-procurement model only addresses immediate energy needs. It often overlooks the sustainability of long-term system operations, and funding for their ongoing maintenance or the potential for system expansion.
Accidents, general wear and tear, and extreme weather which will become more frequent as the climate crisis deepens, can all damage solar panels and sometimes render them inoperable.
However, a solution is within reach. A new Energy-as-a-Service model, which incorporates low-cost operations and maintenance procurement contracts, can mitigate the ongoing running expenses and save on upfront procurement costs, making it commercially unviable to let expensive solar systems fall into disrepair.
To this end, off-grid solar company Sun King has developed an offering for governments, businesses, and large organisations looking to power multi-site operations to deliver sustainable solar power, invaluable for businesses and public services.
Unlocking finance to electrify 300 million people
This year, the World Bank shared their vision for increased focus on healthcare outcomes and energy access. This energy and healthcare nexus presents an opportunity to connect partners, and build new markets to drive climate resilience within global healthcare settings.
In April, in partnership with the African Development Bank Group, the World Bank announced their goal of reaching 300 million people with electricity by 2030. Together they launched their $5 billion ASCENT programme and called for further private sector input.
In addition, development initiatives such as USAID’s Health Electrification and Telecommunications Alliance (HETA) and the UK Government’s Zero-Emissions Generator project aim to further speed up public institutions’ adoption of solar energy.
All of these initiatives point to an increasing awareness within the development community that energy projects must not only assist institutions in adopting clean technology but also ensure support for its ongoing management and maintenance.
Yet despite this recognition, and the economic reality that Energy-as-a-Service is the most viable solution, very few procurements following the EaaS model have been implemented. The overwhelming majority of installations are one-off procurements without a long-term plan for operations and maintenance.
Sun King among first to adopt Energy-as-a-Service model
The off-grid solar sector is seeing early movers in the EaaS space, with Sun King as one of the first large-scale vendors to offer this model for governments, businesses, and public institutions in a bid to reach underserved communities with long-term sustainable energy provision.
The company is already working closely with NGOs and the Government of Malawi to electrify all of the country’s primary schools with reliable long-term solar.
Specifically designed for government and institutional clients, Sun King’s comprehensive agreements allow clients to pay for solar systems on a monthly basis, helping essential public facilities meet their lighting, refrigeration and, more broadly, energy demands, factoring in multi-year operation, expansion, and maintenance needs, with the flexibility to adjust as energy needs evolve.
Once the energy requirements are determined, and installed, clients are charged a monthly fee based on the agreed energy targets. Crucially, Sun King is responsible for repairs and maintenance, and only receives payment if the agreed-upon energy targets are consistently met throughout the contract.
These agreements can range from five to 15 years, or run indefinitely, with the provider required to resolve any performance issues to maintain service.
Industry pilots are promising, demonstrating that this approach can deliver high usage rates and secure, sustainable energy access without the burden of managing or maintaining the infrastructure.
This is particularly beneficial for public services like schools, businesses, government facilities and healthcare centres, where uninterrupted energy supply is paramount for a stable and healthy society.
“Energy-as-a-Service not only speeds up electrification by cutting the upfront costs for governments and NGOs, but it also guarantees solar systems keep running for the long haul. Too often, maintenance has been the missing piece, leaving communities without reliable public services. Sun King is proud to be one of the first to offer a model that ensures power stays on, and systems work when needed most,” says Patrick Muriuki, Associate Vice President Partnerships, Sun King.
Exploring the potential of offering off-grid solar as Energy-as-a-Service
Achieving universal energy access requires enhanced collaboration between the public and private sectors, supported by new procurement methods and services that establish long-term contracts and ensure a consistent energy supply.
The EaaS model addresses many problems: it can reduce governments’ capital expenditure while securing contracts that support businesses in their financial planning and cost forecasting. The EaaS model for all it’s huge potential also surfaces new challenges that will need to be addressed.
Development programmes and government initiatives often have short project cycles, meaning that baking in plans for long-term support is tricky. Additionally, energy companies face economic risks from potential non-payment, magnified under long-term EaaS agreements.
To transform EaaS from a concept on paper to a widely adopted tool that works in practice, governments will need to develop agreeements that move away from the standard one-off procurements for technology and installation. Instead, they will have to focus on long-term outcomes that minimise financial risks.
Well-designed financial tools can help smooth out and mitigate potential issues. Similar initiatives to fund long-term energy agreements, such as guarantees and insurance tools have been pioneered by the World Bank in Niger, and Nigeria can help minimise risk. Further, blended finance tools, like Crown Agents’ multi-donor health fund in South Sudan, offer frameworks to reduce the risks associated with long-term contracts.
Off-grid solar gathering
To this end, the upcoming Global Off-Grid Solar Forum and Expo (8-10 October 2024, Nairobi), will gather the distributed renewables sector to help build the partnerships required to drive universal electricity access, build climate resilience, and power health, agriculture, and enterprise.
Gathering stakeholders across including policymakers, development partners and innovative companies like Sun King, vibrant discussions will explore new business models like Energy-as-a-Service, that take a long-term, sustainable approach to ensuring public facilities, and businesses have access to clean and reliable electricity.
By Eva Roig, Senior Communications Manager, GOGLA and Rebecca Cooke, freelance content writer for GOGLA |
