Winock Energy | Solar Home Systems will not solve Africa’s Energy Poverty
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No electricity in Africa

Solar Home Systems will not solve Africa’s Energy Poverty

Electricity is a basic need globally and it is hard to imagine living without it. Electricity is the backbone of industrialisation in developed and developing countries. However, over 600 million people in Sub-Sahara Africa still lack access to regular grid electricity supply. This issue is now of great concern globally and increasing the supply of electricity is at the top of the agenda for development agencies. For example, affordable and clean energy is number 7 of United Nation’s 17 Sustainable Energy goals.

As a result of the lack of access to clean electricity, Sub-Saharan Africans rely on generating electricity from fossil fuel sources such as diesel/petrol generators and kerosene lanterns. These sources are highly dangerous and polluting to the environment. For example, Nigerian individual micro and small businesses emit around 23,000 kg of CO2 per annum. This figure is set to grow stratospherically as commercialisation and solo entrepreneurship increases.

Solar projects are gaining grounds rapidly as the solution to the above mentioned problems of lack of access to electricity and carbon emission; Solar home systems (SHS) that provide around 50w per hour of electricity on a pay-as-you-go or lease to own basis at around $5 per month are the most prevalent (especially in East Africa) and are being touted as the main solution to these problems.

Although the rise of the adoption of Solar home systems (SHS) is a positive development, it should not be forgotten that the capacity is only mainly sufficient to power small appliances like light bulbs. As a result, the ability of Solar home systems in contributing to much needed economic development is strongly doubtful. In Nigeria for example, a micro business such as a barber shop or convenience store uses on average 1 kwh of electricity which will require buying multiple SHS thereby increasing cost significantly in comparison to using petrol/diesel generators and diesel lanterns; For example, a pharmacy operating in Southeastern Nigeria uses around 9 SHS to power only light bulbs.

So, in light of the above, why is SHS adoption growing if it cannot contribute to the much needed growth in productivity in Africa? The reason is that SHS solution providers are targeting the poorest that do not need electricity other than to power light bulbs. Why are SHS solution providers ignoring the larger customer base that really needs Solar to boost economic productivity and to reduce carbon emission? The reason is that the larger the Solar system’s capacity, the more expensive the project becomes. For example, it costs around $150 to ship a 1.5kva Solar system from China to Nigeria.

While SHS is certainly filling a gap, Off-grid project developers need to also focus on providing Off-grid solar systems that will add significant environmental and economic value in Africa. Moreover, Solar is becoming increasingly affordable such that bigger systems are now economically viable with a payback period of around 3 years for lease-to-own solution providers.