Anjalee Ramjee

Energy access is understood as an essential component of reducing poverty and improving wellbeing. Despite all its benefits, access to clean and reliable energy remains highly unequal. Attempts to reduce these gaps in rural areas have not alleviated the inequality observed in informal settlements in South Africa. This investigation aimsto determine what is needed to accelerate growth in inclusive energy markets in informal settlements.

The research focuses on mechanisms that are hindering the growth of energy products targeting low-income areas. This work involves a critical review of ‘successful’ energy projects in the developing world and interviewswith experts in the energy and development sector in South Africa. A thematic analysis is applied to the projects and interviews to determine what hinders sustainable energy growth in low-income markets and to determine what future policy actions are needed to mitigate obstructions.

Analysis of the interviews divided insights into two categories: consumer observations and business growth observations. Within the former category, an individual’s ability to pay above existing subsidies and gaining trust within the community proved to be critical. For the latter category, interviewees endorsed multidisciplinary collaboration across the whole value chain in growing scalable businesses.

These suggestions lead to three recommendations for government policy. The first is to conduct a study to re-examine the quantity of subsidies needed for a better quality of life for an individual household. The second is to structure tendering processes for energy projects in such a way that each phase of the value chain is a separate tender process, in order to ensure a diverse range of stakeholders who are experts in their field. The third is to create tools for community engagement to enable organisations to better interact with communities they wish to work in.

These recommendations need to be put into practice and tested to ensure that the suggestions result in the growth of energy markets at the ‘bottom of the [wealth] pyramid’. Additionally, consumers should be incorporated into the recommended study to gain a better understanding of their purchasing patterns.