Page - 157 - in Clean Water Using Solar and Wind - Outside the Power Grid

Economy 157 low population density and scattered settlements. Since both capital and operating costs must be considered, both these aspects have been reflected in the subsidy systems. However, as noted before, the up-front capital cost is the dominant one in renewable systems. This means that the subsidy system has to change its emphasis towards the dominant capital cost. This is a significant change for the public authorities in charge of subsidising rural electrification. It also brings a change of perspective for the donor agencies. Compared to traditional diesel-based generators the new technology carries greater technical risks in the sense that there are more components. The system contains not only the electrical devices necessary for solar PV or wind power but also water supply and water treatment components like pumps and desalination membranes. This raises the issue of available spare parts and distribution systems reaching rural areas. A strong public-private partnership is needed to meet the challenges of new technology and to share the risks. The private sector can provide capacity-building and ensure a quality installation and maintenance of the equipment. The public sector can engage in subsidies and financial support, especially during the initial years, to build up skills and to develop the market. Experiences from successful installations, as documented in World Bank (2017), suggest some important success factors: • Consideration of the demands, interest and restrictions of local customers, including the desire to pay with mobile payments systems; • Strong partnerships along the whole supply chain, from the government to private-sector service providers; and • Adaptation of market dynamics to local conditions to support successful, sustainable clean energy solutions. 12.3.2 Payment models It is becoming increasingly common to use smartphones to pay for energy services in the developing world. In 2016 there were more than 32 companies in over 30 countries in Africa and developing Asia selling solar PV products to more than 700,000 households. The up-front fee and regular payments are made using mobile money transfers (IRENA, 2017a). Downloaded from https://iwaponline.com/ebooks/book-pdf/520710/wio9781780409443.pdf by IWA Publishing user