This was the central message of photovoltaic (PV) expert Michael Franz as he presented impressions and conclusions of his extensive work on the development of a solar energy market in Kenya at a recent conference in Brussels.
“Coordination between policy makers and private partners is key to developing solar energy in Africa. Dramatic cost reductions in solar photovoltaic devices are making it increasingly economically viable to improve access to solar energy in Africa but opportunities are lost because policy and regulatory frameworks, and development instruments, are not yet adapted,” said Franz, who is project manager at the EU Energy Initiative Partnership Dialogue Facility.
Drawing his conclusions from several years of working in the Kenyan energy sector, he pointed out that a number of the conditions and lessons learnt are similar to those of other countries in sub-Saharan Africa.
Kenya is characterised by an electrification rate of only 15-20 % and a growth of electricity demand of 5-8% per annum, in a country that has a GDP growth rate of 4.3 %. In this context, as in most of sub-Saharan Africa, more than 80 % of primary energy consumption is for domestic use only, mostly of traditional biomass.
At the same time, access to electricity is a requirement for many productive and social uses. It is widely argued that increasing the access figures will require not only public investment, but also substantial private sector activity.
Franz pointed out that for solar energy in particular, maturing technology and economics of scale are currently generating a massive potential for increasing access and investment. His key point, however, is that in most countries the policy and regulatory environments do not yet allow for this potential to be realised. Essential regulatory requirements for doing business, both on- and off-grid, are not in place yet in most cases, with notable exceptions.
As specific examples of key barriers, he identified standards for solar equipment or services, access to power grids, energy pricing and tariffs, and concessions for rural electrification.
He also discussed the role of development partners. He cited examples of how instruments, as well as approaches, promoted by development cooperation have yet to reflect the rapid developments in the solar energy market. In his view, there is a persistent lack of interventions effectively responding to the needs of the private sector in energy access ventures.
As a prominent example, Franz highlighted the new emerging markets of private solar energy consumption.
Replacing expensive and polluting kerosene lamps with solar lanterns, which cost $30 each to buy, remains a luxury purchase for households in rural Kenya and elsewhere in Africa. This is despite minimal running costs and payback periods often measured merely in months, compared to a product lifetime of several years.
In order to equip these households, Franz said, development practitioners should partner with micro-finance institutions and other private organisations, which he generally sees as the “agents of transformation” in energy consumption.
“We can still benefit a lot more from exchange with the private sector. We need to understand better what the private sector requires, and what exactly we as development partners can do. In fact, our objective should not focus so much on implementing energy projects but rather on promoting the development of sustainable energy markets,” he said.
Another example of an upcoming market is self-consumption for grid-connected users. In many countries, producing solar power has, or will in the near future, become cheaper than grid electricity. This could bring down power costs, increase grid stability, generate local value-addition and employment, and substitute for more polluting electricity sources.
Franz cited several key areas where development partners could make a difference: reducing the high upfront costs through credit lines; reducing financing costs as a factor of the perceived risk through risk mitigation instruments; developing capacity of local companies for design, installation and maintenance of solar systems; and supporting governments to put in place the required policies and regulations.
On the last aspect, Franz mentioned that this is an area currently being addressed through the EU Energy Initiative – Partnership Dialogue Facility, with funding from the European Commission.
“We have decided in this case to work hand in hand with a project implemented by local partners and supported by the Agence Française de Développement (AFD). Our project will support the development of regulatory capacity. The objective is to work with the private sector and the public authorities in Kenya to find the best model for effectively regulating and thereby enabling investment in these markets.”
He also stressed that engagement with partners on the ground, through bodies such as industry associations, could be a vehicle to reach private and public sectors.
This article was drafted with input from Michael Franz from the EU Energy Initiative Partnership Dialogue Facility (EUEI PDF) and Arnaud de Vanssay with support from the capacity4dev.eu Coordination Team. – See more at: http://capacity4dev.ec.europa.eu/article/solar-energy-has-great-potential-africa-has-yet-take#sthash.lpnKwDHS.dpuf
Advantages and disadvantages of solar PV
Advantages of solar PV
• PV panels provide clean, green energy. Electricity generation with PV panels produces no harmful greenhouse gas emissions – solar PV is thus environmentally friendly.
• Solar energy is supplied by nature – it is thus free and abundant.
• Solar energy can be made available almost anywhere where there is sunlight.
• Solar energy is especially appropriate for smart energy networks with distributed power generation – DPG is indeed the next generation power network structure.
• The cost of solar panels is reducing and expected to continue in a downward pricing trend for the next few years – consequently solar PV panels have a promising future both for economic viability and environmental sustainability.
• Operating and maintenance costs for PV panels are low, almost negligible, compared to costs of other renewable energy systems.
• PV panels have no mechanically moving parts, except in cases
of sun-tracking mechanical bases; consequently they have far fewer breakages and require less maintenance than other renewable energy systems (eg
• PV panels are silent and thus ideal for urban areas and for residential applications.
• Because solar energy coincides with energy needs for cooling, PV panels can provide an effective solution to energy demand peaks – especially in hot summer months where energy demand is high.
• Solar PV panels are a major renewable energy system promoted via government subsidy funding (feed-in tariff schemes (FITs), tax credits, etc); these financial incentives for PV panels can make solar energy panels an attractive investment alternative.
• Residential solar panels are easy to install on rooftops or on the ground without any interference to residential lifestyle.
Disadvantages of solar PV
• As with all renewable energy sources, solar energy has intermittency issues – there is no sunlight at night and daytime interruptions are caused by cloudy or rainy weather.
• Intermittency and unpredictability of solar energy thus make solar energy panels a less reliable solution.
• Solar energy panels require additional equipment (inverters)
to convert direct electricity (DC) to alternating electricity (AC) in order to be used on the power network.
• For a continuous supply of electric power, especially for on-grid connections, PV panels require not only inverters but also storage batteries; thus increasing the investment cost considerably.
• Land-mounted PV panel installations require relatively large areas
for deployment; usually the land space is committed for this purpose for a period of 15-20 years or longer.
• Solar panels efficiency levels are relatively low (between 14%-25%) compared to the efficiency levels of
• Though PV panels have very low maintenance and operating costs, they are fragile and can be damaged relatively easily; additional insurance costs are therefore of ultimate importance to safeguard a PV investment.