Papua New Guinea Emerges as a World-Leading Market for Mobile Pay-Go Solar

Famous worldwide for its beaches and coral reefs, the southwestern Pacific islands of Papua Guinea are about as culturally and biologically diverse an island nation as you can find. It’s also remote and isolated with one of the lowest percentages of access to electricity outside Sub-Saharan Africa. With a population of some 4.85 million, access to electricity in Papua New Guinea was just 22.93% in 2016, according to World Bank statistics compiled from officially recognized sources. That dropped to 15.47% for the rural population, but reached 72.69% for the urban population. Data is scanty and spans a wide range, however. Moreover, grid service is poor and prohibitively expensive for most. Blackouts are frequent. And, like most, if not all island nations, diesel, oil and other fossil fuels are the predominant fuel source for power generation, as well as transportation and industry, conveying a host of human and broader-based environmental problems.

That’s changing fast, household by household and business by business. Sales of mobile pay-go solar kits have soared, rising 68% per year since 2012. Solar energy is now lighting some 60% of households in Papua New Guinea. That’s up from just 2% in 2012, according to the International Finance Corporation’s (IFC) recently released “Going the Distance: Off-Grid Lighting Market Dynamics in Papua New Guinea.”

In a number of countries with high mobile penetration and low energy access, solar solutions with mobile charging sees a major uptake.

—highlighted Subrata Barman, who leads IFC’s Pacific Energy Advisory Program.

“This is because people need the energy to charge their mobiles, and there is also an attempt by mobile companies to launch initiatives for mobile charging. It is important to remember that the revenues of mobile companies are directly related to handsets being charged…The whole idea behind pay-as-you-go was to make it affordable. We realized people would not be able to pay for solar systems upfront. So, we broke down the payments, which in some cases are lower than what they would pay for flashlight batteries.”

Mobile PAYG solar in Papua New Guinea

The potential for solar to replace fossil fuels in Papua New Guinea is high, according to Lighting Papua New Guinea, which has played a key, pivotal role in multilateral efforts to promote and foster solar and renewable energy investments and use in Papua New Guinea. Lighting Papua New Guinea is a branch of the World Bank Group’s Lighting Global program, which is working “to rapidly increase access to offer off-grid solar energy for the 1 billion people living without grid electricity worldwide.” For its part, Lighting Papua New Guinea has been “creating markets for, and promoting the use of solar power across the island nation, more particularly in rural areas that lack grid access.”

“With 300 days of sunshine in many parts of the country, there’s great potential to harness solar power for businesses and households,” Lighting Papua New Guinea highlights. The program, supported by the governments of Australia and New Zealand, has helped bring so-called pico, mobile pay-go solar to some 1.6 million Papua New Guineans for the first time. All told as of August 2018, the program has provided mobile pay-go and off-grid solar power systems to one-fifth of Papua New Guinea’s population, “mainly in remote villages and rugged highlands, helping to boost small businesses and cut household costs.”

Lighting Papua New Guinea has drawn on the experience it has gained in Africa and Asia to help 10 global and local companies in Papua New Guinea develop and grow the island nation’s local off-grid solar market. By and large, these are solar manufacturers and distributors from other emerging markets, according to program executives.

The program has helped global solar manufacturers enter the local market by providing business connections and market intelligence, as well as education for consumers and retailers on the value of using quality-verified solar products.

—Barman told Solar Magazine.

Lighting Papua New Guinea is no longer involved in the program, but according to its records, some 317,000 solar lighting products, lanterns and solar home systems that meet Lighting Global Quality standards were imported into Papua New Guinea between January 2014–June 2019, according to Barman.

Lighting Papua New Guinea started out by partnering with Origin Energy Australia subsidiary Origin Energy Papua New Guinea and investee client Bank South Pacific (BSP) to develop a pilot mobile pay-go solar project. “As part of the pilot, IFC advised on how to best adapt the BSP mobile banking platform to handle Origin PAYG payments. Our work here was simply to help establish the mobile money platform for payments to Origin Energy and provide early stage guidance. Since our initial engagement however, we have completed our advisory engagement, as our support was limited to development of the business plan and providing implementation support for the first 200 systems,” Barman said in an interview.

Solar energy access in Papua New Guinea: From the grass roots to the highest levels

Papua New Guinea in November 2018 invited Australia, Japan, New Zealand and the United States to support efforts to enhance electricity access, the primary goal being to connect 70% of its population to electricity by 2030. Just 13% of Papua New Guinea’s population has reliable access to electricity, according to a White House statement.

“The Papua New Guinea Electrification Partnership is intended to focus on the importance of principles-based, sustainable infrastructure development that is transparent, non-discriminatory, environmentally responsible, promotes fair and open competition, upholds robust standards, meets the genuine needs of the people of Papua New Guinea and avoids unsustainable debt burdens,” the White House explained. “It is intended to adopt a strong focus on investments that provide employment and training opportunities for local contractors and communities. It is also intended to focus not only on delivering high impact investments but ensuring improved coordination and governance within the energy sector.”

Data from the IFC’s latest report shows that Papua New Guinea has one of the highest rates of use of off-grid solar lighting in the developing world, the multilateral development finance agency highlights. “It’s a move driven by the success of IFC’s Lighting PNG program which has helped 22% of the population—or 1.8 million people—gain access to off-grid solar lighting and mobile phone charging for the first time. Based on extensive, in-country research, the market for solar solutions now totals some US$260 million a year, and growth is expected to continue over the next five years,” according to the report.