Off-Grid Solar

How Off-Grid Solar Contributes to Energy Access
Off-grid solar delivers electricity through standalone, solar-powered products, offering a rapidly deployable and affordable offering for people without reliable grid access. Provided primarily by private-sector companies, off-grid solar is critical to closing the electricity access gap due to its potential reach, speed of deployment, and flexible payment terms, relative to grid expansion. In 2023, around 561 million people were benefiting from off-grid solar devices.  

How Off-Grid Solar Contributes to Development
Off-grid solar delivers immediate, tangible benefits—from basic lighting that replaces costly, polluting kerosene and battery torches, to systems powering schools, clinics, and businesses. These solutions may save money or cost fractionally more than traditional energy sources -- offering a vast improvement in quality of life and air quality, and supporting income generation. For millions, especially in remote or fragile areas beyond the reach of the grid, off-grid solar offers a pathway out of energy poverty. 

Off-Grid Solar’s Main Challenges and Solutions
Off‑grid solar expansion faces challenges, particularly in relation to affordability, access to finance, product quality, and long‑term maintenance—especially in remote or fragile settings. ESMAP support includes guidance for solutions which reduce upfront costs through targeted subsidies, pay‑as‑you‑go models, and strengthening market ecosystems with better financing, quality assurance and policy frameworks.  

Affordability of Off-Grid Solar
Affordability constraints are a significant impediment to progress. Even with pay-as-you-go (PAYG) financing, only 22 percent of the remaining unconnected households can afford even an entry-level solar home system. For larger systems such as those capable of powering appliances or productive equipment, the affordability gap is even wider – less than 3% of unconnected households can afford these.

On the supply side, companies serving last-mile consumers face high financing costs, currency volatility, high distribution and service costs (especially in remote areas), and limited access to working capital. In fragile and conflict-affected contexts—where nearly two-thirds of people without electricity now live—these risks are amplified. Without targeted intervention including concessional finance, risk-sharing instruments, and supportive policy frameworks, the hardest-to-reach populations are at risk of being left behind. 

Enabling Off-Grid Solar to Meet its Full Potential
Closing the access gap requires coordinated action on both the demand and supply sides. Through country and regional-level technical assistance, ESMAP is supporting governments to design and implement well-targeted results-based financing and other end user subsidy mechanisms that reduce consumer prices and incentivize private sector delivery in remote and hard-to-reach areas.

At the same time, ESMAP works with the World Bank and regional partners to mobilize blended finance and de-risk investment in distributed renewable energy markets. An estimated US$21 billion will be required to reach 398 million people with off-grid solar solutions and stay on track toward SDG7. By strengthening regulatory frameworks, improving market data, and advancing geospatial least-cost electrification planning, ESMAP enables private providers to expand sustainably and serve underserved communities at scale.