Roughly 992 million people worldwide lack access to electricity and 84 percent of them live in rural areas. As the costs of traditional grids remain high, decentralized or distributed systems like mini-grids or solar home systems are the most cost-effective ways to reach remote, rural households. Digital finance can help achieve universal access to clean, affordable energy (SDG 7) in three ways:
- Remote bill payments enabled by technologies like smart meters reduce the cost of billing by eliminating the need for meter reading. They also reduce the risk of non-payment through real time, remote collection of dues. Digitally prepaid energy provides flexibility in usage for poor households and lowers cost of energy access.
- PAYGo solar financing expands energy access to poor and vulnerable households. Companies can harness digital payments and remote lockout technologies to finance assets like solar home systems to anyone who has mobile connectivity, while mitigating portfolio risk and ensuring customers are willing to pay.
- Digital payments encourage capital investment in the distributed energy sector, having raised more than $750 million in the past five years.
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Topic: Digital Innovation
Sub-topics: Role of Financial Inclusion