Achieving sustainable energy access in fragile and conflict-affected settings (FCS) requires a customer-centric approach focusing on understanding and stimulating energy demand. Obtaining relatively accurate measurements of energy demand patterns is critical for making solar mini grids economically viable. However, energy demand in FCS is often suppressed due to weak governance, poor infrastructure, low appliance ownership, and limited financial capacity. These factors, combined with volatile economic and political conditions, create significant barriers for mini grid providers aiming to achieve financial viability.
This blog explores key strategies to measure, incentivise, and sustain demand for solar mini grids in such challenging contexts. To learn more about the underlying dynamics, explore our policy toolkit Demand-side factors: Tools to measure, incentivise, and sustain demand for solar mini grids in fragile contexts and the State Fragility initiative’s set of publications on scaling up solar mini grid access in fragile contexts.
Drivers of low energy demand
To understand how to spur and sustain energy demand, it is necessary to understand the key drivers
of low energy demand in FCS. These include:
Low ability and willingness to pay (WTP): Households and businesses in fragile contexts often have depressed incomes and limited access to financial products, making energy services unaffordable. Additionally, fragile environments are characterised by uncertainty, poor state regulation, and weak physical and digital infrastructure, which undermine consumer confidence and dampen their willingness to invest in mini grid systems.
Market and infrastructure gaps: The solar mini grid market is a nascent sector, inherently subject to investment risks and uncertainties related to limited or non-existent market data and knowledge. These challenges are amplified in FCS. Additionally, weak transportation networks, infrastructure, and unreliable supply chains increase costs and hinder mini grid deployment.
Knowledge and awareness deficits: Many communities are unaware of the benefits of electrification and its potential to improve livelihoods. This includes limited knowledge about income-generating opportunities that could be unlocked through increased energy access and energy-related businesses.
These challenges are compounded by the broader structural challenges inherent to fragile settings including weak governance, low state penetration, economic volatility, insecurity, poor transport infrastructure, and limited public financial capacity. These make it difficult for governments to provide subsidies or concessional financing needed to make energy costs more affordable.
Tools to measure energy demand
In fragile contexts, data scarcity, uncertainty, and socioeconomic constraints make it difficult to accurately estimate energy demand. It is important to develop and deploy effective data collection tools to bridge this gap.
WTP surveys are an effective tool that is commonly used to collect data on how much consumers are willing and able to spend on energy. This approach provides valuable insights for developers to tailor their pricing models by distinguishing between expressed WTP (i.e., self-reported maximum spending) and revealed WTP (i.e., actual spending on alternative energy sources such as kerosene or diesel). However, conducting WTP surveys in fragile settings is not always feasible due to security risks, resource constraints, and logistical difficulties. Successful implementation may require additional prerequisites, including risk assessments, enumerator training, and community engagement to ensure accurate and meaningful data collection tailored to the local context.
Given these challenges, geospatial analysis has emerged as an innovative and scalable alternative to traditional survey-based methods. Tools such as Energy Access Explorer, GridFinder, and Village Data Analytics (VIDA) use satellite imagery and machine-learning algorithms to assess market potential and identify optimal locations for mini grid deployment. Such tools integrate geotagged data on population density, infrastructure, and road and electricity networks to better understand energy demand patterns. In contexts of extreme fragility, such innovative approaches may be more suitable than complex, risky, and costly on-the-ground surveys.
Another useful tool is the Multi-Tier Framework (MTF), developed by ESMAP, which offers a standardised, tiered approach to measuring energy access across different countries and regions. By analysing factors such as capacity, reliability, affordability constraints, and service quality, the framework identifies key barriers to energy and helps stakeholders design interventions tailored to specific community needs. The tool has been widely adopted by governments, development organisations, and researchers and could hold significant promise in fragile contexts, where more nuanced approaches to tracking energy access are needed.
Demand stimulation strategies
Addressing the risk of low energy demand requires concerted efforts to increase awareness of the benefits of electrification, scale the productive use of income-generating appliances, and enable financing mechanisms that can help de-risk some of the demand uncertainty.
Firstly, in fragile settings, low consumer awareness about electrification can suppress demand due to misconceptions about affordability, limited understanding of the benefits of electrification, and cultural or social barriers. Addressing these knowledge gaps and stimulating demand requires raising consumer awareness about mini grids, their benefits, and various productive uses of energy, as well as facilitating knowledge exchange among key stakeholders to disseminate successful ideas and establish communities of practice. Effective strategies for raising awareness could include public awareness campaigns, knowledge hubs and communities of practice, vocational training, and end-user education. Engaging communities and local leaders is also essential as they can help build trust among communities and shape more positive attitudes toward electrification.
Additionally, financial and technological innovations can also be deployed to support and sustain energy demand by boosting consumer finance capabilities. Financial support through cash transfers, vouchers, or well-targeted subsidies can help bridge the affordability gap for consumers and facilitate greater financial inclusion which is particularly necessary during the initial adoption period. For example, in 2019, the Togolese government launched an end-user subsidy, which increased the uptake of solar home systems by 125% in the first three months after launch and roll-out. Similarly, technological innovations such as mobile money platforms and smart meters can enable better control and monitoring of energy usage and promote more timely payments for energy usage. For example, pay-as-you-go (PAYGo) systems allow consumers to pay for electricity in small, manageable instalments. When integrated with mobile money platforms, these models reduce transaction costs, improve accessibility, and increase affordability.
Moreover, demand stimulation through productive use of energy (PUE) can not only unlock livelihood opportunities but also increase the viability of mini grid systems. PUE refers to the use of energy services to enable income-generating activities and can increase productive of economic activities. It can include small-scale manufacturing (milling, welding), agricultural processing (irrigation, cold storage facilities), and commercial services (retail, hospitality, healthcare).
In conclusion, stimulating demand for solar mini grids in fragile settings requires a multifaceted approach that combines accurate demand assessment, financial and technological innovations, and the promotion of productive uses of energy to ensure long-term economic viability. This would require multi-stakeholder collaboration between governments, developers, donors, and local communities who can collectively support long-term energy access and promote socio-economic development even in these more challenging environments.
To learn more, read our policy toolkitDemand-side factors: Tools to measure, incentivise, and sustain demand for solar mini grids in fragile contexts and the State Fragility initiative’sset of publications on scaling up solar mini grid access in fragile contexts.