Renewable energy can offer real opportunities to supply people on a low income with modern energy. Renewable resources, such as solar and water, are often abundant in areas where poor people live and the technologies do not require much maintenance. While the upfront costs can be higher than alternatives such as diesel generators, the operating costs are very low. Decentralised energy – which refers to any system where energy production occurs at or near the point of use – is particularly effective for extending access because it can be deployed more rapidly and cheaply than the conventional model of a centralised power plant and grid extension (Bhattacharyya, 2013, Javadi et al., 2013). Many types of clean and renewable energy are suited to decentralised provision, such as solar home systems, mini-grids powered by small-scale hydro or biogas for cooking.
Climate finance is one potential finance stream for the energy access sector. The volumes of climate finance promised, and the sectors it targets, appear at first glance to align well with energy access finance needs.