Solar Home System Consumer Insights in Mozambique

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Solar Home System Consumer Insights

This section provides an insight into the awareness level, willingness to pay and access to finance of the consumers.

Consumer awareness for SHS: Although there is a high consumer awareness for SHS products (68%), only 30% prefer SHS over the national grid electricity. Nevertheless, there is a significant percentage that is looking to buy solar products for lighting in the near future (37%) [1].

Ability and willingness to pay: On average, a rural Mozambican household spends USD 12 on energy expenses (lighting, phone charging and radio) per month. An urban household spends USD 13[2] (based on a 2018 survey) monthly on average. Thus, the current energy expenditure could also cover PAYGO SHS with monthly instalments as low as USD 6 for low Tier SHS[3]. Furthermore, 60% of the households stated their willingness to pay over USD 12.5 per month for SHS with radio. Willingness to pay is highest in Nampula, Inhambane and Sofala provinces[1].

In general, 59% of the potential customers have unstable income due to high dependence on agriculture. This could impact their default rates especially for PAYGO. In terms of monthly expenditure, 55% stated that their expenditure is fixed[1].

Product profile: Most of the households own Tier 1 SHS (72%) and this could also be due to the affordability factor. The monthly instalment for Tier 1 also matches what the households pay in general for energy services. Only 20% of the households own Tier 2 SHS and 8% own Tier 3+. The common use of SHS is for lighting[1].

Most of the products (mostly low Tier) are bought using one-time cash payment (75%). As the consumers move to higher Tiers, there is a switch to PAYGO. The households that pay instalments also pay on average more than USD 7.5 every month[1].

Access to finance: Overall, access to financial services is increasing largely due to mobile money but still varies greatly from one province to another. As of 2019, 21% of Mozambicans had access to formal institutions such as banks; 22% had access to other non-bank institutes such as micro finance, saving and credit cooperatives, mobile money and pension funds; 11% to informal savings groups called Xitiques and 46% did not have access to any[4]. For more information about access to consumer finance, please refer to this chapter[4].

The table below shows the breakdown of access to finance by province.[4]

Provinces Formal banks (%) Other formal (%) Informal (%) Excluded (%)
Maputo 37 38 3 22
Inhambane 23 30 16 32
Gaza 24 30 14 32
Sofala 20 27 7 46
Cabo Delgado 23 17 12 48
Nampula 20 18 12 50
Tete 16 17 15 53
Manica 20 18 8 54
Zambezia 12 19 13 56
Niassa 14 12 13 62

Usage of mobile money: As mentioned above, PAYGO is key when a consumer wants to move to higher Tier SHS. Thus, it is important to understand the usage of and penetration of mobile phones as PAYGO can use a variety of payment systems including mobile money.

In 2019, 29% of Mozambicans used mobile money for activities such as cash withdrawals (91%), cash transfer (18%), utility payments (27%) and payment for goods (9%). This is a huge jump considering the 3% in 2014. In terms of accessibility, 55% of Mozambicans have access to a mobile phone. As of 2018, there are 43,125 mobile money agents covering all 11 provinces.[4]

The most common use of mobile money is for cash withdrawals (most probably remittance money, 91%) and cash transfer (18%). Only 27% use it for utility payments and 9% for goods payment.

Click here to see the network coverage maps in Mozambique.

References

  1. 1.0 1.1 1.2 1.3 1.4 USAID, “Can Mozambican Household Afford SHS? Insights from a Local Survey.”
  2. Economic Consulting Associates and Greenlight, “Off-Grid Solar Market Assessment in Mozambique.”
  3. Based on the average price for a SHS with lights, battery, charger and a radio.
  4. 4.0 4.1 4.2 4.3 Finscope, “Mozambique: Finscope Consumer Survey Report 2019.”