Chilling Prospects 2022: Making sustainable, affordable refrigeration a reality for all

Data analysis
Chilling Prospects 2022

Reflections on five years of the Kigali Amendment by CLASP

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Refrigerators have the potential to unlock an array of social and economic benefits for consumers living in off- and weak-grid areas. They contribute to many of the Sustainable Development Goals (SDGs) (Figure 1), from promoting good health and wellbeing (SDG3) to reducing inequalities (SDG10) as the domestic burden of food gathering and preparation usually falls on women and children. Refrigeration is also essential in hospitals and clinics – especially for vaccine storage – and enables income-generating activities for small businesses through the storage and sale of drinks and perishable items. 

Figure 1: Refrigerator interlinkages with the Sustainable Development Goals (SDGs)
Figure 1: Refrigerator interlinkages with the Sustainable Development Goals (SDGs)

Despite their potential impact and high demand [1], off-grid refrigerator sales and market penetration rates remain low. In 2020, it was estimated that only 4 percent of rural households in Sub-Saharan Africa owned a refrigerator. [2] This is largely due to affordability – without financing, the cost of refrigerators can be two and a half times higher than the annual disposable income of the poorest 50 percent of off-grid households. [3] Power system, duties/taxes, and transport are significant cost drivers, accounting for more than half of the total cost to the end user. [4]

Compared to smaller household appliances, refrigerators are energy intensive and thus need a larger solar energy system to power them. Solar systems can account for approximately 75 to 83 percent of the total cost of an inefficient refrigerator. [5] Efficiency improvements are therefore key to unlocking improved affordability by reducing the up-front cost of solar energy systems. Efficient off-grid refrigerators also help curb greenhouse gas (GHG) emissions. One unpublished analysis from CLASP found that replacing inefficient diesel-powered refrigerators in Nigeria with highly efficient solar models could avoid 625,507 tons of carbon dioxide (CO2) emissions, equivalent to taking 136,035 cars off the road for a year. [6]

Expanding the market for efficient and affordable off-grid refrigerators to improve lives 

In recent years, research and development (R&D) investments, donor-supported financing programmes, and business model innovations have all supported improvements in the price and efficiency of off-grid refrigerators and increased their uptake.  

Financing programmes are bringing high-quality refrigerators to scale. An increasing number of programmes are providing support to help manufacturers finance high-performing refrigerators. For example, Global LEAP Results-Based Financing (Global LEAP+RBF) [7] is catalyzing the uptake of high-quality and efficient appliances by lowering the cost to procure large volumes of best-in-class products. These efforts have resulted in sales of over 5,100 high-quality off-grid refrigerators across East and West Africa, benefitting nearly 7,400 people living in off- and weak-grid areas.  

Technology innovations are improving efficiency and price. Recent innovations in insulation, compressor efficiency, and better controllers are driving down prices and improving efficiency, with the average efficiency of off-grid refrigerators improving by 12 percent from 2017 to 2019. [8] These improvements may be due in large part to R&D efforts and technology innovations from leading refrigerator manufacturers, which are achieved in-house or with grants, such as the Efficiency for Access R&D Fund.

One example of a promising innovation in the sector is the use of Peltier cooling refrigerators, which operate with no compressor, meaning that there are no moving parts apart from the fan. One of the main benefits of this technology is lower manufacturing costs and therefore greater affordability due to the small number of parts. Without refrigerants or a compressor, Peltier cooling refrigerators are also easier to transport to end users. [9] Another innovation, digital inverter compressors, can increase refrigerator efficiency and operate on AC or DC power, making them viable for households in weak-grid areas. [10]

Refrigerators are creating new opportunities for small-business owners. 90 percent of customers who purchase a refrigerator through the Global LEAP+RBF programme use it at their workplace, primarily to sell cold beverages. After purchasing their refrigerator, users increased their daily incomes by two and a half times, on average. In a 2020 survey, 90 percent of customers shared that their refrigerator had improved their quality of life, primarily due to improved income. [11] An M-KOPA survey found that small businesses with a refrigerator in rural Kenya increased their weekly income between USD 1 to USD 40 on average, and households saved an average of USD 4.82 per week from improved food storage and making fewer trips to the market. Beyond increased savings, respondents reported improved diets, lower stress, increased convenience, and time savings estimated at two hours weekly. [12]

What can be achieved through scale up by 2025 

With greater affordability and increased efficiency, the cumulative global market potential for off-grid refrigerators is projected to grow by 10 percent each year, from USD 4.4 billion and 11 million households in 2018 to USD 8.7 billion and 23 million households by 2025. With these projections, an estimated 20 million people could gain first-time access to a refrigerator by 2025, resulting in over 250,000 new home-based jobs. [13] However, improvements in affordability, product quality, after-sales care, business models and consumer awareness will be critical to growing the off-grid refrigerator market over the next three years.

Scaling the off-grid refrigerator market would be transformational for people living in energy poverty, particularly women and girls. For example, M-KOPA found that 60 percent of refrigerator users stated that women benefitted the most from owning a refrigerator – these benefits included freeing up time spent on household activities, saving from purchasing in bulk, reducing stress and creating small-business income generation.[14] Refrigerators can therefore promote gender equity at both business and household-use levels.

New types of refrigeration solutions are emerging to serve various market segments, including fisheries, dairy and smallholder agriculture. Off-grid cold chain units have the potential to increase farmers’ profits by opening new markets for high-value crops and reducing food waste, enabling developing countries to raise food supply by 15 percent – about 250 million tons. [15]

As global temperatures rise and disproportionately affect people living in the developing world, cooling technologies such as refrigerators will be essential to health, survival and productivity. Off-grid refrigerators are on the cusp of transformational growth, with significant progress being made on affordability, accessibility and product design. In the coming years, further improvements in efficiency and price, among other factors, will be key to accelerating access to highly impactful refrigeration in off-grid communities. 

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Notes and references

[1] In 2020, household refrigerators ranked fourth for perceived consumer demand and third for impact potential among other off-grid appliances in a sector survey.
[2] The State of the Off-Grid Appliance Market Report, Efficiency for Access Coalition, 2019
[3] Appliance Data Trends, Efficiency for Access Coalition, 2021
[4] Use Cases and Cost Breakdown of Off-Grid Refrigeration Systems, Efficiency for Access Coalition, 2020
[5] Appliance Data Trends, Efficiency for Access Coalition, 2021
[6] Greenhouse Gases Equivalency Calculator, Environmental Protection Agency
[7] Global LEAP+RBF is a financing programme for Winners and Finalists of the Global LEAP Awards. Learn more about the Global LEAP Awards and Global LEAP+RBF here.
[8] Appliance Data Trends, Efficiency for Access Coalition, 2021
[9] Low-Energy Inclusive Appliance Technology Summaries, Efficiency for Access, 2021
[10] Ibid.
[11] These data are from an unpublished survey from CLASP and 60 Decibels that interviewed Global LEAP+RBF refrigerator customers.
[12] Innovation and product development: why some products take off and others don’t, CDC Group, 2019
[13] These numbers were calculated using the Efficiency for Access Impact Assessment Framework and assume that there is one refrigerator per household for the 25 million households estimated to own a refrigerator by 2025. This number only includes domestic refrigerators; the impact potential would be much greater if refrigerators used for non-domestic businesses were included.
[14] Innovation and product development: why some products take off and others don’t, CDC Group, 2019
[15] The Role of Refrigerators in Worldwide Nutrition: 5th Informatory Note on Food and Refrigeration, IIR, 2009