Why Africa is Missing the Solar Power Boat

30 Апр 2014 | Author: | No comments yet »
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Why Africa is Missing the Solar Power Boat

Nairobi — Despite having one of the best solar regimes in the world, Africa is still a trivial player in the global solar market. Less than 1.5 percent of the trade in solar came to Africa last year, and most of those solar panels were bound for South Africa.

That Africa has massive solar resources is no secret, this has been discussed since the 1980s. As well, it is not a secret that solar prices are at an all-time low at less than US$0.60/W. At the same time, electricity costs in Africa are among the highest in the world. And they are rising rapidly.

Clearly, the global age of solar energy is dawning. This leads one to ask “Why isn’t Africa at the centre of solar commerce?” “Why are countries like the UK, with meagre resources that amount to less than a third of the equatorial blast of sun we enjoy here, installing more than the entire African continent?”

A Market Transformation

Going back less than 20 years, 99 percent of the PV business was off-grid. In 1995, when world production was only 80 MW/year, almost all solar systems provided power for applications far from power networks: remote telecomm sites, signalling sets and village schools and clinics. And, in the mid-90’s, over 20 percent of the world PV trade came to Africa. However, in the mid-1990’s the green party in Germany succeeded in getting their Government to invest in support for on-grid solar power. In the U.S. and Germany, engineers developed inverters which enabled solar modules to synchronously feed their electricity into the grid.

Within 10 years, a market was created that allowed customers on-grid to dispense with batteries, place modules on their roof, and power loads in their houses directly from solar arrays. Better yet, many customers spun their electricity meters backward and laughed at power companies while they fed power the other way. Interest in production of solar power on rooftops skyrocketed. Programs in Japan, Germany, Spain and California encouraged consumers to buy household and small business solar systems. By 2003, the solar industry, which has been growing at 20 percent per year for twenty five years, passed the one gigawatt per year production mark. By 2012, 99 percent of PV business, now over 30 GW per year, was on-grid.

A huge transformation had taken place. The solar industry had gone from laboratory hobby of rocket scientists to off-grid hippie diversions to a mainstream investment, supported by feed in tariffs in more than 60 countries. But, in 2012, Africa was not a player in solar demand. Why? Because solar in developed countries is on-grid and in the hands of the middle class. As grid demand grows, demand for solar grows. But solar in Africa is off-grid. It charges batteries and is, predominately, in the hands of lower income groups. As the grid expands, the market for solar contracts.

Barriers to Development

Africa has been slow to invest in all renewables. According to Bloomberg New Energy Finance, of $268.7 billion invested worldwide in renewable energy last year, only about $4.3 billion was made in Africa and most of this went to South Africa and north Africa. But it has been particularly slow to join the solar PV party.

There has never been a conspiracy to keep solar out of Africa. Instead, a set of factors has led to a market failure that keeps solar off Africa’s grids. The inability to connect and market solar “on to the grid” has kept major solar companies out of Africa and has made solar a tool with limited markets, an expensive choice for rural people without cash, often peddled with missionary zeal by aid agencies and NGOs. Among rural people who get by on a few dollars a day, off-grid solar will always be limited a plaything that cannot deliver what grid or generator power can, something in a shop window, or a toy that provides a few watt hours a day, but not a permanent solution.

The first major blockage to the development of African’s solar sector has been political. As is still the case in much of the developed world, actors who think “big” manage electricity sectors from Capetown to Cairo. Centralized power from large coal, hydro and petroleum plants has been the order of the day for decades among African power companies, and they are always planning large projects to overcome many obstacles they must deal with. Small, decentralized PV power projects do not easily fit into their programs. In developing big fixes to solve short-term problems, solar PV is overlooked in favour of crisis management. When the hundred million dollar focus is on expanding the grid to the whole country, off-grid solar does not play well among bureaucrats or politicians.

Secondly, Africa’s policy makers have been among the last in the world to adopt the message of decentralized power. Even though end consumers, adapting to regular power outages, are forced to utilize decentralized diesel generators all over the continent, ignorance and inertia at policy levels have kept new solutions from gaining a foothold. Policy makers, often stuck in crisis-prevention mode on a day-to-day basis, haven’t looked forward to use of solar power. They have not had the time or support to create the policies, regulations and incentives necessary to start the transformation of power sectors to new sources. Often, they are simply unaware of the real transformative potential of solar energy for their countries. And, unlike Europe and the U.S. there have been few “champions” for solar among Africa’s government and private sector.


Thirdly, it is impossible to ignore the entrenched interests that actively seek to maintain the status quo. In much of East and West Africa, electricity sector power is increasingly produced by diesel-powered thermal generators. Diesel generation is extremely expensive for consumers, but it is lucrative business for the well-connected moguls that have the supply contracts. Even if solar were cheaper (and it is lower cost that diesel generation from $100/barrel petroleum!), what business interest would the powerful elite have in replacing their generators with customer-owned solar?

Finance is another key problem. Unlike Germany, there is a comparative lack of middle class to invest in solar PV systems (though commercial classes invest heavily in generators). Banks and financiers are uneducated about renewables and they tend to be ultra-conservative. The long payback periods, small size and the lack of established business models make solar PV a foreign language to the finance community. Instead, they chase more lucrative large-scale power projects. High interest rates mitigate heavily against solar PV when banks want upwards of 20 percent interest on home loans, no math anywhere can make a loan for a PV system a smart move.

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