Industrial, agricultural, and commercial appliances are key to income generation and poverty alleviation
A productive use of renewable energy facilitates income generating activities and improves the atmospheric climate in the sector. There is a strong and proven connection between increased commercial energy consumption and improved human welfare.
Despite this promise, there is relatively little consensus in the energy access sector on the scope and mandate of the term, and little data exists regarding its opportunities and challenges, and the relative impact potential of the relevant technologies. There are also variations on the term, such as “energy for livelihoods”. While relatively large-scale appliances such as agricultural grain mills and water irrigation systems come to mind, all appliances can unlock income. Lights keep a store open later, a TV with the news may attract new customers, and a household refrigerator stores cold drinks and perishable food items for later sale.
Under the framework of Efficiency for Access, productive uses encompass any and all technologies that have relevance for economic and social impacts. We focus on addressing the notable shortfalls in market intelligence, improving cost and efficiency, exploring off-grid design considerations, and enhancing our understanding of a technology's unique relevance in off- and weak-grid contexts.
Defining a technology as productive use should take into account not only the direct impact of energy on raising incomes, but also the indirect impacts that energy can have on other development issues. With increased productivity, this allows for more leisure or productive time spent on other activities, and can create new jobs.
Although both education and electricity alone can result in higher on-farm income, when the two services are delivered together, profits are amplified dramatically – by as much as 2.3 times. Therefore, technologies that have positive impacts on education fall under the umbrella of productive use.
Medical centres that lack electricity also cannot use modern healthcare devices, from vaccine refrigerators to vital diagnostic equipment, effectively excluding some of the world’s poorest and most vulnerable populations from adequate healthcare. Even electrified health facilities may struggle to provide critical care services, as existing medical equipment is not designed to withstand frequent power outages, voltage fluctuations, and the needs of off- or weak-grid clinics. Negative impacts are not limited to health outcomes, but also livelihoods and upward economic mobility.
The productive use of renewable energy in rural areas is expected to result in increased rural productivity, economic growth, and rural employment. This would not only raise incomes, but also help reduce the migration of the rural poor to urban areas.
Scaling up distributed energy access solutions presents new opportunities to close gender and social inclusion gaps. Mobile money and other digital and technical innovations can not only increase women’s access to basic household appliances, but also serve as a profitable path towards entrepreneurship.