Most of you probably know by now, DARES is out, it’s a $750Mn program, the largest of it’s kind and a blueprint so to speak for many off-grid programs being setup across sub saharan africa. DARES is designed to connect 3.2 million households with renewable energy over the next 5 years in Nigeria. This is huge, and awesome news. Lots of energy access is about to happen, and it’s going to place only behind India and China for recent rapid rural electrification efforts - this is a big deal, developers are already qualified and the first grants have already been awarded 🎉. So let’s dig into how mesh-grids fit into the picture!
This post is the first in a three part series on developing mesh-grid projects for the DARES program in Nigeria.
Background about mesh-grids
- Mesh-grids are what you get when you marry the speed and flexibility of solar home systems with the robustness and reliability of ini-grids. By stringing solar home systems together with a tiny low voltage DC cables and a smart power sharing device (in our case the Okra Pod), power can be shared between systems providing unparalleled reliability and flexibility to bring energy access to off-grid communities.
- Mesh-grids have developed through multiple iterations, with Solshare and Devergy pioneering low voltage DC power sharing. Zola experimented with AC distribution and AC output. At Okra, we took the best of both worlds, low cost, safe DC distribution and modular design, along with AC power output so households can use the full range of appliances that are readily available at the local market.
What you need to know
- When we started Okra, we developed mesh-grid technology to enable energy companies to bring power to the hardest to reach communities, profitably and without being dependent on grants / subsidies.
- Mesh-grids have made massive strides in lowering capex costs (by reducing distribution costs by up to 90% vs. mini-grids we can get an average mesh-grid connection shipped to Nigeria at about $400/cxn) designed for approximately 15kWh/user/mo.
- We have some sites currently being sized as high as $800/cxn (with heavy productive use) and some as low as $300/cxn, obviously it all depends on sizing, but the average cost is around $400.
- Mesh-grids have also lowered technical barriers to bringing reliable, productive use energy solutions to last mile communities, quickly, and without any heavy technical engineering work required. You can see full tech overview here.
- Even though mesh-grids are designed to be sustainable without subsidies, a grant program covering mesh-grids is welcomed news. Mesh-grids being part of the DARES program will rapidly accelerate energy access and make it commercially viable to reach 100% of end-users in a community.
We’re incredibly excited that the REA and World Bank have collaborated on a first of its kind mesh-grid financing facility, supporting energy companies in Nigeria that are deploying mesh-grids. This is a testament to the hard work and innovation in the off-grid energy industry, with a completely new category of last mile electrification being created 🤲🏽
So how does the DARES grant program work?
💡 Keep in mind, I’m keeping this post specific to mesh-grids so as to not make it too long-winded.
From the $750Mn DARES program, $410Mn is allocated towards mini-grids. Mesh-grids sit under the mini-grids component. Under the $410M for mini-grids there is both an MST (Minimum Subsidy Tender - or reverse auction) and a PBG (Performance Based Grant - results based finance) component.
- With the MST, the REA identifies specific sites to be energised, and the lowest bidder for these sites (in terms of grant requested) wins the reverse auction.
- The PBG component provides a flat per connection grant (after installation) for mini-grid and mesh-grid connections. The grant ranges between $350 and $600 per connection for mini-grids and at a flat rate of $300/cxn for mesh-grids. How are mesh-grids going to compete with mini-grids?
How are mesh-grids going to compete with mini-grids?
As you would have seen, the mesh-grid grant is lower than the mini-grid grant, but I think mesh-grids are still going to be more competitive for the vast majority of communities that are less than 500 connections.
- As you would have seen, the mesh-grid grant is lower than the mini-grid grant, but I think mesh-grids are still going to be more cost competitive for the vast majority of communities that are less than 500 connections.
- Although 99% of off-grid loads are less than 3.6kW (able to be served by mesh-grids), currently mini-grids perform better when it comes to big productive loads like community mills that can require up to 10s of kilowatts.
- That being said, mesh-grids are not only more cost effective than mini-grids. They are also much faster to deploy, because mesh-grids have much lighter distribution infrastructure and there is no land acquisition required. Mesh-grid installation speeds and complexity are comparable to SHS installation speeds and complexity.
- The REA have also done a great job of streamlining compliance for mesh-grids. Since mesh-grid distribution falls under SELV (Safe / Separated Extra Low Voltage), once the site specific DARES submission is approved there is no additional on-site approval stage which will really help communities get connected rapidly (particularly important for the smaller communities where mesh-grids are a perfect fit and heavy compliance slows things down).
- The above 2 points are really important because the DARES program gives 12 months to deploy and commission a site from when the grant agreement is signed (this includes time for financing, procurement, installation and commissioning the portfolio)
- Depending on system sizing, the post-grant costs for mesh-grids can be around $100 per connection and will be lower as we continue to improve on costs in 2026 and beyond - making running a profitable last-mile energy business easier than ever before!
- Each site is going to be different, but I encourage all developers to think of which solution (mesh-grids or mini-grids) are going to be able to deliver the most energy to your end users (after the grant) and invest in the right technology for the right community!
Who's working on mesh-grids in Nigeria right now?
- We’re currently working with some of the best off-grid energy companies in Nigeria including Renewvia, Sosai, First Electric and Engie Energy Access, Havenhill, Creeds & more. Keep in mind a lot of these companies are taking a dual approach to mini-grids and mesh-grids, others are doing mesh-grids only.
Next week I’ll share a post around how our partners are accelerating their project development using a number of tools we’ve built - Site Finder, Proximity Analysis, Project Builder, Network Simulator, and the week after I’ll be share some guidance on tariff structures and appliance partnerships that can be used to build a viable project portfolio that’s ready for financing and ready for DARES site specific submissions!
Keen to hear any comments, questions, concerns as we keep designing technology to target the hardest to reach communities with reliable and useful energy access - just bump your thoughts using our contact form or on LinkedIn!
