Energy is essential to Africa’s development, but progress has stalled over a false choice: Should the continent prioritize the basic solar home systems that move households up the energy ladder — or should it invest in making electricity cheaper and more reliable for businesses to power job creation and economic growth?
As this debate has unfolded across the sector, African companies are struggling to compete because of inadequate power, and more than half a billion Africans still live without any electricity. How the region addresses this dual challenge will define its development trajectory for decades to come — while also determining whether initiatives like Mission 300, which aims to connect 300 million Africans to electricity by 2030, are able to deliver.
At the Energy for Growth Hub and CLASP, we believe that ending energy poverty can only be achieved by balancing these two priorities: ensuring that households have basic access that meets their circumstances, while also powering the businesses that create jobs and opportunity. That doesn’t mean funding everything equally or pursuing all investments at once. But it does mean resisting false trade-offs between ensuring initial residential access and powering business activities, while designing systems that advance both priorities.
We believe the path toward truly ending energy poverty rests on four interlocking pillars, which we’ll explore below.
1. Initial household access is non-negotiable
Everyone should have electric light and clean cooking at home. Yet millions of families who live in extreme poverty also live without basic energy or clean cooking. A solar lamp, a clean stove or a phone charger won’t lift them out of poverty, but these devices can make their homes safer and move them up the energy ladder.
Just as importantly, basic energy access begins to build a household’s habit of paying for power, providing baseline demand for electricity that utilities can later build on as use grows. Affordable solutions like small installment plans for solar home systems, battery rentals swappable at community charging stations, and subscription-based pre-grid power mean the poorest households no longer have to wait decades for the grid to reach them, or face prohibitive upfront costs. Reaching every home with these sorts of solutions will require government subsidies, reducing costs for its poorest citizens to ensure that no one is left behind. But even if government support falls short, donors and entrepreneurs can help make universal household electricity access a reality within this generation.
2. Household access must adapt to grow with demand — and be accelerated by proactive investment in building that demand
Treating access as binary — yes or no, connected or not — risks stopping investment at the lower rungs of the energy ladder, and cementing deep inequality between those who only have enough electricity to power a light, and those with reliable access to greater amounts of energy. Per-person electricity use across Africa remains among the world’s lowest, barely enough for lighting, phone charging, and a small fan or radio — and much less than a typical American refrigerator. Consumption will need to rise several-fold to reach a minimal threshold for “modern energy.”
Today, most of the unelectrified live within reach of existing grid infrastructure, often in or near urban areas. Yet proximity does not guarantee access or meaningful use. Long wait times, high connection fees, unreliable service and limited access to appliances weaken the incentive for households to connect — and limit consumption once they do. Public and donor-backed electrification investments so far have also focused almost entirely on supply (generation, transmission and distribution), without addressing demand, i.e., the machines that run on electricity and drive the consumption patterns that move families up the energy ladder. Governments and utilities can stoke future demand by promoting and financing efficient appliances. Enabling that shift, just as America did nearly a century ago, can catalyze an upward cycle toward modern energy usage, giving households the freedom and choice to chart their own path up the ladder.
3. Reducing costs and improving reliability are essential for job creation
Economic growth and job creation are the ultimate goals of greater energy use. But household access alone will not create the number and quality of new jobs needed. Globally, three-quarters of electricity is consumed outside the home in industry, transport, commerce and agriculture. People need reliable electricity at work to earn a living, and businesses need it to sustain and grow their operations. In sub-Saharan Africa, outages cost firms over 8% of their sales each year — well above the global average — pushing many to rely on generators that can be several times more expensive than grid power. In Nigeria alone, some 20 million small fuel generators, about half serving businesses, provide 42 GW of backup, far exceeding the capacity of the national grid.
This dependency on expensive, unreliable power keeps firms in survival mode, limiting production, deterring investment and shrinking the very job base that could lift families out of poverty. Clean energy solutions for businesses — from off-grid solar for farms and rural retail, to mini-grids for maize mills and welding shops, to large plants for mining, manufacturing and data centers — can provide the competitive, dependable power that anchors economic and job growth. Supporting these energy solutions can therefore reinforce the economic activity and income generation that sustain household electricity access in the long term, ensuring that this access improves living conditions as well as livelihoods.
4. The hard (unavoidable) part: Fixing utilities
However, for these impacts to materialize, the continent will need to address the challenges that plague its electrical grid. Broken utilities strand households and firms alike without reliable, affordable power. Across sub-Saharan Africa, most utilities do not collect enough revenue to cover operating costs and new investment, relying on government subsidies to fill the gap.
Ironically, the push for universal access can make this issue worse, since expanding grids into underserved areas further strains their limited resources. Meanwhile, poor service is leading many of these utilities’ best commercial and industrial customers to exit and build their own systems at greater cost — and at a loss to the overall economy. Additionally, when too many customers abandon utilities, it can result in a patchwork of fragmented energy islands: isolated systems that can power small areas but don’t build toward an integrated national power system capable of supporting a prosperous, competitive economy.
But fragmentation is not inevitable. The question is whether utilities can adapt and integrate distributed generation into their planning and investment strategies, and prevent their strongest customers from defecting. New models are already showing what the utilities of the future could look like in Africa. Interconnected mini-grids are reinforcing reliability in weak-grid areas, while early-grid approaches — like deploying mini-grids ahead of planned grid expansion to build demand and de-risk later investment — are helping utilities reach nearby unelectrified communities faster and at lower cost. And larger metro-grids — dense urban systems built around distributed generation and storage but integrated into the centralized network — are proving that distributed systems can deliver reliable, utility-grade power at scale, while strengthening national grids. These approaches show that Africa can build flexible next-generation utilities, but only if governments and their global funders confront the deeper reforms required to make utilities financially viable and better governed, while adapting to a more distributed energy future.
The North Star: Energy that works seamlessly for everyone
The world we want is one where cheap, reliable and abundant clean electricity quietly powers life in the background — not only for households, but also for businesses. The investments and policy choices African governments make today will determine whether the continent builds toward that vision, developing an energy system that works for everyone.
To that end, ambitious initiatives like Mission 300 are a welcome development — one that has powerful momentum. But for the initiative and the countries it serves to deliver on the promise of energy access and maximize its impacts on job creation and better living standards, all four of these pillars need to be part of the answer.
Alba Topulli is Senior Director, Clean Energy Access at CLASP, and Todd Moss is the Founder and Executive Director of the Energy for Growth Hub.
Photo credit: 6000.co.za, via Flickr
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