WASHINGTON, D.C. –(ENEWSPF)–October 27, 2014. Today, the Sierra Club released a new report — Expanding Energy Access: Beyond The Grid — that provides a set of five principles to help guide public policy in catalyzing clean energy access markets beyond the grid.
These dynamic and rapidly growing markets are helping to deliver energy services for the 1.3 billion people around the world living without electricity. However, without clear policies, future growth may be threatened.
“Policymakers need to set clear and effective rules of the road to help catalyze clean energy access markets. Doing so will unleash transformative economic activity that reduces poverty, creates jobs, and improves quality of life. It’s time to tame the wild west of beyond the grid policy making so these markets can flourish,” said Justin Guay, Associate Director of the Sierra Club’s International Climate Program.
The report identifies five key principles that support investment in mini- and off-grid policies.
Focus on Energy Services, Not Electrons: The development of super-efficient appliances — like televisions and refrigerators — can do more to unlock new services for the lowest-income populations than the provision of raw power supply.
Build Markets from the Bottom Up: Starting with ‘pico’ power — like solar lanterns and solar home systems — populations get on to the energy ladder by displacing existing expenditures on dirty kerosene lighting. Lighting, however, is just the beginning of energy access. As people move up the energy ladder to higher levels of access, policymakers should transition deployment support to full access technologies like mini-grids and larger solar home systems.
Level the Playing Field with Fossil Fuels: Today, clean energy access providers are taxed while their competitors — fossil fuel giants — are highly subsidized. Policymakers should seek to ensure fossil fuel subsidies directly reach low-income populations and sunset that support over time while simultaneously eliminating Value Added Taxes (VAT) on solar products.
Unlock Finance: Public financing should use targeted tools, like loan guarantees, to de-risk and unlock private investment. In certain cases, like mini-grids, subsidy support through innovative approaches, is required to unlock the market.
Define Regulations and Create Policy Certainty: This is perhaps the largest looming threat to this nascent industry; there simply is no policy certainty for companies in this market. Policymakers need to ensure light touch safeguards that accommodate rather than preclude the growth of the industry by, amongst other things, defining what constitutes a utility and benchmarking prices against more expensive energy sources like diesel and kerosene in order to protect consumers.
“We simply can’t apply the round peg of regulations and policy making developed for the centralized grid to the very different realities of those operating beyond its reach. These common sense principles will help policymakers develop a new approach that reflects the reality of these energy markets,” said Guay.
The report was authored by Justin Guay of the Sierra Club, Carl Pope, a principal advisor with Inside Straight Strategies and executive director of the Sierra Club, Jigar Shah, author of Creating Climate Wealth: Unlocking the Impact Economy and founder of SunEdison, and Stewart Craine of Village Infrastructure Angels.
To read the report, click here.
To read our blog, click here.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 2.4 million members and supporters nationwide. In addition to creating opportunities for people of all ages, levels and locations to have meaningful outdoor experiences, the Sierra Club works to safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and litigation. For more information, visit http://www.sierraclub.org.