Introduction
In recent years, innovative financing schemes like Pay-as-you-go (PAYG) have made picoPV products affordable and easily available to the most remote population of the world. This proliferation of picoPV products have also been supported by the increased awareness about the negative effects of kerosene on health, environment and finances.
This article explores how the recent boom of picoPV market has affected the traditional kerosene and candle market.
Kerosene Market
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Figure 1: Share of population without access to grid
Since mid 19th century, kerosene has been used for lighting purposes all over the world. This situation changed in developed countries with the introduction of electricity in mid 20th century. However, in developing countries, kerosene is still the dominant fuel used for lighting purposes. According to this study from GOGLA, in 2016, 1.2 billion people were not connected to the power grid and thus, were dependent on external sources such as candles and kerosene for meeting their lighting needs. Households use approximately 4 to 25 billion liters of kerosene annually for lighting purposes. Similarly, USD 27 billion is spent annually on lighting and mobile phone charging services using kerosene, candles, battery torches or other fossil fuel-powered technologies. The poor households pay in the range of USD 100 per kilowatt-hour which is more than a 100 times the amount people in rich countries pay.
Figure 2 shows the annual spending on off-grid lighting and phone charging in Africa and Asia. The data shows that kerosene and candles have a huge market presence in African and Asian countries. It is important to note that in many countries such as India and Nepal, the government has even subsidized kerosene to make it affordable for the poorest population. In Nigeria, the amount the government spends on kerosene subsidy is more than that for security, critical infrastructure, human capital human capital development, and land and food security combined. The subsidy on kerosene also creates illegal black market as kerosene is often trafficked from countries where it is subsidised to the neighbouring ones where it is not subsidized.
