Energy Efficient Appliances in the World of COVID-19

A message from Steven Hunt, Senior Energy Innovation Advisor, UK Department for International Development, Co-Chair, Efficiency for Access Coalition

While the COVID-19 crisis has turned the world upside down since the last Efficiency for Access newsletter, the role of energy efficient appliances in off- and weak-grid parts of the world has never been more relevant. Health facilities need water pumps more than ever to ensure the availability of water for hand washing and sanitation. They need reliable and efficient fridges to store medicines and the COVID vaccines we hope will come soon. They need testing and treatment equipment, oxygen separators and therapies – all of which need power. Furthermore, with schools closed and movements restricted, families depend on radios and television for information and education, and not to feel alone. Refrigerators, lighting, phone charging, and fans all make it more feasible to stay in lockdown for longer periods without having to venture out. At the heart of the ‘green recovery’ approach which many are talking about is productive uses of clean energy which can help reignite economies when countries ease lockdown restrictions.

At the same time, many clean energy pioneers are especially vulnerable right now. GOGLA has done important work to advocate for off-grid solar as an essential service. However, the need to respond to COVID-19 is creating new demands on development budgets. What’s more, with the markets in turmoil, expected private investments are being delayed or disrupted. According to GOGLA’s recent survey among its members, 46% of companies surveyed noted that they expect to be able to sustain operations for three –⁠ four months, but then get into serious trouble. Efficiency for Access Research and Development Fund and Global LEAP Results Based Financing grantees have also observed how global restrictions have resulted in delays to prototyping, field trials, production lines and shipment of inventory. In addition, market closures have pushed companies to revise down projected revenues, as products cannot be sold physically. As a result, cash conservation and employee retention have been priorities.

Members of the Efficiency for Access Coalition, a group of organisations working to promote efficient appliances for clean energy access, are adapting their support to the new context. The IKEA Foundation is committing up to €10 million to help its programmes fund their work to support people affected by COVID-19. In addition, Acumen is leading a sector-wide effort to develop the €100 million COVID-19 Energy Access Relief Fund, aiming to provide emergency liquidity to off-grid energy companies. Shell Foundation is also making additional funding available to the 65+ enterprises in their portfolio specifically for Business Resilience support. With support from USAID, CLASP is converting a portion of the Global LEAP Results Based Financing money from output-based payments to grants. CLASP is also working with Sustainable Energy for All to coordinate with the health sector on technical aspects for clinic care for COVID patients and related equipment and power system needs.

We are also seeing early examples of companies pivoting their business models and supporting relief efforts. For example, Frontier Markets is working closely with government officials in Rajasthan, harnessing its large distribution network to convey solar lighting as well as food, masks and gloves to customers in remote rural areas. Simusolar is deploying its solar water pumping technology at rural healthcare facilities in Kenya and Uganda. Harness Energy, an Efficiency for Access R&D grantee that sells solar products, bioenergy and clean cookstoves, is distributing food packages to struggling families in rural Pakistan.

The seismic changes that COVID-19 has produced could also be increasing customer appreciation of the value of efficient appliances and changing behaviours which have up to now proved hard to shift. Some household solar companies have seen record sales in the last two months. Hotpoint has reported a more than doubling of sales of their Von Electric Pressure Cooker in Kenya, as families seek to avoid leaving their houses for food or fuel, and charcoal prices have risen. How permanent some of these behavioural changes are is not yet clear, nor how repayment performance will hold up. However, permanent changes can arise due to higher penetration and the increased visibility of feasible solutions in a crisis.

Ultimately, supporting the off- and weak-grid appliance sectors will require sustained collaboration both now and as COVID-19 recedes. Efficiency for Access is conducting a COVID-19 mini campaign on our digital and social media channels, which will signpost resources available for affected organisations and highlight the critical role that energy access can play in the pandemic response. Please do let us know if you would like the Secretariat to highlight any relevant initiatives, and follow us on Twitter, LinkedIn and visit the Efficiency for Access website.

Steven Hunt, Senior Energy & Innovation Advisor, UK Department for International Development, co-chair Efficiency for Access Coalition