The Fight for Light: Improving Energy Access through Digital Payments

The report argues that digital payments are critical for achieving Sustainable Development Goal #7 (universal energy access) by reducing the high costs and risks associated with cash-based collections. It identifies three primary barriers: the financial unviability of grid extension in rural areas, high upfront costs for clean-energy assets, and a lack of private investment. The document proposes solutions such as bundling prepaid smart meters with digital payments, implementing pay-as-you-go (PAYGo) financing for solar home systems, and digitizing energy subsidies to reduce leakages. Case studies from South Africa, Uganda, Kenya, India, Bangladesh, and Ethiopia illustrate how these digital tools improve utility profitability, expand renewable energy reach, and enhance financial inclusion for low-income households.

• Cash-based utility payments create significant operational inefficiencies, including slow reconciliation, high transport costs, and susceptibility to misappropriation. In lower- and middle-income countries, 93 percent of adults who made a utility payment in 2014 did so in cash.
• National utilities in developing countries often struggle with financial sustainability; a 2016 World Bank evaluation found that only 10 out of 40 national utilities were profitable. In sub-Saharan Africa, 19 of 39 evaluated power sectors failed to collect enough tariffs to cover operating expenses.
• The combination of digital payments and prepaid smart meters allows utilities to reduce costs related to metering, credit operations, and energy theft, while enabling low-income customers to align consumption with their volatile incomes.
• Pay-as-you-go (PAYGo) financing, enabled by digital payments and lockout technology, overcomes the high upfront cost of solar home systems (SHS) and clean cooking assets. It is estimated that digital payment-enabled solar units could reach 15 million households and 75 million people by 2020.
• Digital payments catalyze private investment by securing receivables and providing transparency in cash flows, which is essential since only 18 percent of 2013 energy access investment came from private sources.
• Digitizing energy subsidies can reduce government leakages and improve targeting. In India, shifting liquefied petroleum gas (LPG) subsidies to bank accounts reduced transfer leakages by 24 percent.
• Mini-grids are a cost-effective solution for the 46 percent of the rural population without electricity who cannot be efficiently served by the central grid, representing nearly 500 million people.
• Digital payments help decouple economic growth from greenhouse gas emissions by making off-grid, renewable energy solutions—primarily solar and wind—more economically viable.

APA

Tellez, C., & Waldron, D. (2017). The Fight for Light: Improving Energy Access through Digital Payments. Sustainable Energy for All. https://www.seforall.org/sites/default/files/Full_-_Energy_Case_Study.pdf

Chicago

Tellez, Camilo, and Daniel Waldron. The Fight for Light: Improving Energy Access through Digital Payments. Sustainable Energy for All, 2017. https://www.seforall.org/sites/default/files/Full_-_Energy_Case_Study.pdf.

Wikipedia

{{cite report |last1=Tellez |first1=Camilo |last2=Waldron |first2=Daniel |title=The Fight for Light: Improving Energy Access through Digital Payments |publisher=Sustainable Energy for All |date=July 2017 |url=https://www.seforall.org/sites/default/files/Full_-_Energy_Case_Study.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tellez2017fight, author = {Tellez, Camilo and Waldron, Daniel}, title = {{The Fight for Light: Improving Energy Access through Digital Payments}}, institution = {Sustainable Energy for All}, year = {2017}, month = jul, url = {https://www.seforall.org/sites/default/files/Full_-_Energy_Case_Study.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }