the Market for Solar Home Systems Outline of Proposed Approach and - PowerPoint PPT Presentation

Sindh Solar Energy Project Achieving Rural Electrification by Expanding the Market for Solar Home Systems Outline of Proposed Approach and Role of the Private Sector Consultation Workshop on Component 3 of the Sindh Solar Energy Project Mehfooz Qazi , Director Alternate Energy, Sindh Energy Department, Government of Sindh Oliver Knight , Senior Energy Specialist, World Bank 3rd October 2018 Consultation Workshop on Component 3 1

Sindh Solar Energy Project Presentation Outline Project Background & Objectives Project Time-line & Key Elements of Component 3 SED as a Market Developer Target Districts Proposed Product Range Supplier & Product Eligibility Criteria Targeting of Female Headed Households Program Processes Issues for Discussion 3rd October 2018 Consultation Workshop on Component 3 2

Sindh Solar Energy Project Project Outline Sindh Solar Energy Project (SSEP) is a new initiative of the Government of Sindh, financed by a $100m concessional loan from the World Bank that was approved by the WB Board in June 2018. It has four components: 1. Development of solar parks to facilitate at least 400 MW of utility- scale solar through competitive bidding [$40m]; 2. Installation of 20 MW of distributed solar on and around public buildings in Karachi and Hyderabad [$25m]; 3. Scaling up the market for solar home systems to provide electricity access to at least 200,000 households in Sindh [$30m]; 4. Technical assistance and capacity building in support of the above, including two comprehensive household energy surveys [$5m]. 3rd October 2018 Consultation Workshop on Component 3 3

Sindh Solar Energy Project Energy Access Challenge in Sindh • According to census 2017 figures released by Pakistan Bureau of Statistics division, the total number of households in Sindh was 8,585,610. • NEPRA in 2017, reported a total number of domestic connections of 3,400,260 in Sindh. This translates into an electricity access rate of 39.6% for Sindh, with roughly 5,185,350 households without electricity connections. • Acknowledging this problem, Government of Sindh has initiated a SHS for households program in Sindh Province through clean solar energy solutions. World Bank has agreed to support Government of Sindh in this regard. 3rd October 2018 Consultation Workshop on Component 3 4

Sindh Solar Energy Project Objective of Component 3 Component 3 of the project, targeting off-grid Solar Home Systems (SHSs), aims to: Support deployment of 200,000 Solar Home Systems by private sector suppliers in prioritized areas with low access to electricity over a period of five years (2018-2023) 3rd October 2018 Consultation Workshop on Component 3 5

Sindh Solar Energy Project Principles of Component 3 • Market-based approach to achieve scale and sustainability • Consumer-driven to match income and needs • Public funding used to bridge affordability gaps and reach more remote areas • Stringent quality standards to avoid market spoilage • Results tracking and penalties for non-compliance or fraud 3rd October 2018 Consultation Workshop on Component 3 6

Sindh Solar Energy Project Project Timeline Year 1 Years 2-5 3rd October 2018 Consultation Workshop on Component 3 7

Sindh Solar Energy Project Key Elements of Component 3 1. Partial grant to households: A grant amount ranging between 20% - 40% of SHS cost will be provided to each household that purchases a SHS installed in the target districts. 2. Consumer awareness campaign: A firm will be hired to undertake marketing activities directed at the consumer, to build awareness and facilitate the purchase of SHS by consumers. This will complement the marketing activities of private sector suppliers. 3. Monitoring and evaluation: A separate firm will be hired to implement a robust M&E program covering product testing, installation verification, household complaints hotline, supplier compliance, and results monitoring. 3rd October 2018 Consultation Workshop on Component 3 8

Sindh Solar Energy Project SED As a Market Developer 3rd October 2018 Consultation Workshop on Component 3 9

Sindh Solar Energy Project Energy Access Assessment Methods • New IFC Lighting Pakistan study used high-resolution nighttime satellite imagery to identify low energy access communities across Sindh and Punjab Provinces in Pakistan • Initial target districts have been identified based on above GIS Study and Poverty Maps • SSEP includes funding for two household energy surveys using the Multi-Tier Framework • Survey results will further support targeting 3rd October 2018 Consultation Workshop on Component 3 10

Sindh Solar Energy Project Possible Target Districts 1. Badin 2. Dadu 3. Ghotki 4. Jacobabad 5. Kashmore 6. Khairpur 7. Qambar Shahdadkot 8. Sanghar 9. Shikarpur 10. Tharparkar 11. Thatta /Sajawal 12. Umerkot 3rd October 2018 Consultation Workshop on Component 3 11

Sindh Solar Energy Project Proposed Product Range The project aims to provide at least a basic SHS “starter system” to each household, defined in terms of the services provided, as follows: • 1x fan • 1x mobile charging • 3x lights The grant amount per household will be determined on the basis of this starter system, and will be fixed. Larger SHSs with additional features and functionality will also be eligible, but households will get the same grant amount. 3rd October 2018 Consultation Workshop on Component 3 12

Sindh Solar Energy Project Product and Supplier Eligibility Criteria 1. Product standards* : Stringent product standards shall be enforced based on IEC testing procedures. The project aims to support product testing within Pakistan through an accredited lab. 2. Supplier experience : Experience in working with solar PV and/or SHS technology for at least three years in Pakistan or internationally, with an emphasis on experience in the off-grid space. 3. Supplier strength : Proof of good financial standing of the company, and ability to provide and support SHS installations in rural areas of Sindh. * Further details on proposed quality standards in handout provided. 3rd October 2018 Consultation Workshop on Component 3 13

Sindh Solar Energy Project Targeting of Female-Headed Households The project has committed to giving specific priority to female-headed households (FHHs), with an initial target that at least 2% of the total households provided with SHS will be FHHs. This will be achieved through the following supplemental measures: 1. Specific questions on gender in the household energy survey to better understand the issues [Component 4] 2. Targeting of FHHs in the consumer awareness campaign 3. Training available for suppliers and installations crews on the specific energy needs of women and FHHs [Component 4] 4. An increase in the grant amount for FHHs 5. Additional M&E actions to support FHHs 3rd October 2018 Consultation Workshop on Component 3 14

Sindh Solar Energy Project Supplier Pre-Identification Process Consumer Outreach and Sales Process 3rd October 2018 Consultation Workshop on Component 3 15

Sindh Solar Energy Project Installation and Subsidy Payment Process Testing and Verification Process 3rd October 2018 Consultation Workshop on Component 3 16

Sindh Solar Energy Project Issues for Discussion • District targeting • Product and supplier eligibility criteria • Method for providing grant to households (e-voucher?) • Reaching female-headed households • Consumer awareness campaign • Ensuring robust M&E and supplier compliance (including rewards and penalties) • Market uptake of SHS 3rd October 2018 Consultation Workshop on Component 3 17

Sindh Solar Energy Project Thank You 3rd October 2018 Consultation Workshop on Component 3 18

Sindh Solar Energy Project Geospatial Mapping of Low Energy Access Communities in Sindh • Uses U.S. Air Force Defense Meteorological Satellite Program’s Operational Linescan System (DMSP- OLS) and VIIRS satellites • Link between nighttime light output and energy access • IFC Lighting Pakistan team conducted study using high- resolution nighttime satellite imagery to identify low energy access communities 3rd October 2018 Consultation Workshop on Component 3 19

Sindh Solar Energy Project Feedback Session Market Uptake of SHS Solution Provider Identification Table Numbers 3, 4 & 10 Table Numbers 1, 2 & 9 • Sustainable Financing • Criteria for Supplier Eligibility Mechanisms/MFIs • Pricing Range • Expected Uptake of SHS Consumer Outreach Target Districts & M&E Process Table Numbers 5 & 6 Table Numbers 7 & 8 • • Awareness and Operating of Target Districts • Grant System M&E Process • Reaching Female Headed Households 3rd October 2018 Consultation Workshop on Component 3 20