Examining low cost financing models for deploying solar energy in West Africa
Deploying solar solutions while desirable has been blighted by the huge capital costs involved in procuring solar power infrastructure. Experts say that Africa’s geographical location and dispersal nature of many rural African communities makes it among the best positioned to take advantage of solar power.
But with 600 million Africans without access to on-grid power and many of those who are connected to the grid suffer uninterrupted interruption of power supply as weak transmission lines prove incapable of delivering available power.
Developments in the solar power industry both on grid and off-grid solutions is getting increasingly less sophisticated, cleaner, simpler and more efficient. Some photovoltaic panels now come equipped with built-in micro inverters hidden behind the panels to ensure power optimization and conversion happens at source minimizing shading and light disruptions.
Some systems are installed with facility for real-time data gathering on the system’s solar production and home energy use. There are also smaller bits of home solar options measured in kilowatts and wattages that give you options for those on a limited budget. These solutions helps tackle the problem of huge capital outlay needed to procure solar infrastructure, innovative solutions are being advanced in several paths of Africa.
Arnergy solar limited, a Nigerian firm founded by Femi Adeyemo and Kunle Odebunmi has created a prepaid solution that promises 24 hours supply to power basic household appliances and office equipment. The revolutionary systems assembled in Nigeria, incorporates technology that will allow customers to buy recharge pin using a mobile electricity app or through an agent in areas without mobile network. The app synchronizes with the company’s cloud based server infrastructure to unlock solar power when a 12 digit pin is keyed into the solar kit.
A starter pack contains a photovoltaic panel and a battery modified which has a key pad and a display unit where information about units purchased and consumption levels are displayed. The Arnergy 300 comes with a radio and MP device for rural areas where electrical appliances are considered luxury.
“We want to help small businesses threatened by irregular power supply,” states Kunle Odebunmi, charged with finance and business development, “Arnergy 500 can power small businesses like barbers, tailors, business centers, real estate agencies, private homes and even small offices. It is cheap, it is clean and we take the stress of maintaining the equipment.”
Farmers in Senegal currently water crops through the labour intensive method of flood
irrigation with wells and buckets, or the cost- and energy-intensive method of using diesel-powered motor pumps. But these options are inadequate in a country with immense solar resources that can be harnessed and used to transform irrigation practices in the country and region.
It is for this reason, an organisation, Earth Institute innovated a solution that will enable a small group of farmers to use a central solar energy unit to power multiple alternate current (AC) pumps for irrigation. The proposed solution takes advantage of the benefits of solar without the high costs associated with direct current (DC) powered pumps and battery storage.
Farmers will get access to this facility with prepaid electricity cards issued by a micro-utility, and sold through local vendors who will benefit from a small commission. Recognizing that a major obstacle to technology adoption is financing, a tariff-based financing model was created to allow customers to cover their appliance loans in small payments added into their micro-utility bills
In Ghana, Persistent Energy Ghana (PEG), a global solar power company serves off-grid communities in rural areas, offering installation and maintenance of mini grids in perpetual rent, as well as solar panels for individual households. The company sells electronic appliances, such as TV, radio, torches, and mobile phone chargers, which can only be powered through its system.
PEG’s systems incorporates technology ensures that after an installation, the supplier does not need to go into the field to disconnect or reconnect the devices. The mini grid is made of 20-25 wired 1-metre towers with a solar panel on top, and batteries and a charge controller at the bottom.
One of the towers has a GSM connection enabling PEG to monitor activity and to control the system via phone or internet. To top up, customers give money to a PEG agent in the field, who sends a signal to central offices in Accra. Subscribers get either an automatic top up or a telephone text message with a code they can key into the device, a system similar to Arnergy’s.
This off-grid, small-scale energy solutions can more reliably, rapidly, and cost-effectively bring power to communities that may not otherwise get access to the traditional grid. Rather than investments directed at expanding failing national grids in West Africa, energy efficiency is assured when they are maintained and more off-grid solutions encouraged.
These solutions also generate more economic opportunity as creative small and medium enterprises develop and operate off grid and small scale technologies in their communities to serve the energy needs for Africa’s rural poor.
More of these low cost financing options for off-grid solar power are gaining wide acceptance in Africa. The United Nations Development Programme says some innovate financing options being used includes paying in installments, fee-for-service arrangements as a way to overcome these high up-front costs.
“With all their advantages, solar systems are not cheap to install,” says Mr. Jem Porcaro, an analyst for the Energy and Environment Group at UNDP. “A typical home system in sub-Saharan Africa costs anywhere between $500 and $1,000 and such systems typically provide enough power to light three to six rooms and power a black-and-white TV each night. But the cost is well beyond the means of most African households.”
The World Bank says costs can be reduced by installing solar panels to power multiple houses at once rather than individually. It also urges African governments to remove barriers such as high import duties on batteries and solar panels.
ISAAC ANYAOGU