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Low-Cost Solar Power Presents a Transformative Opportunity for Africa

December 19, 2019

 

Originally Published in the December 2019 Journal, Breaking the Silence, Pg. 1

 

 

Energy consumption in Africa’s lower income markets is predicted to rise tremendously
throughout the coming decades. Birthrates are projected to pull Africa’s population from 1.2
billion up to over 2 billion by 2050. The majority of this growth will occur in communities which
have historically been disconnected or have had inconsistent servicing from national grids. If
electricity access for these populations is to ever rise above 35 percent, policy makers and
businesses must address questions of future energy systems. Past energy infrastructure has
proven unreliable, expensive, and difficult to maintain. South Africa, for example, has had to
cancel construction on future power plants due to high costs, and countries such as Rwanda and
Zambia will be faced with similar costs, as they create unsustainable energy deals with Russia.
Fortunately, there is an alternative. Harnessing solar energy seems to provide an economically
feasible, grass-roots method for electrifying Africa


Most immediately, there are clear geographic benefits for photovoltaic systems in this
region. Africa receives many more hours of sunlight than any other continent. In parts of Egypt,
Sudan, Chad, and Libya, the sun shines for 4,300 hours per year, 97 percent of the possible total.
Much of the continent is also in the intertropical zone where the intensity of sunlight is always
high. Additionally, two fifths of the continent is desert, the most continuously sunny biome. The
combination of these factors account for the projection that Africa’s sun exposure could provide
40 percent of the global total. Choosing to ignore Africa’s massive solar reserves is not only
environmentally harmful, it is also allocatively inefficient.


The other clear benefit of solar technology is that it does not require a centralized grid.
Financially precarious governments have fallen short when providing energy infrastructure in
countries such as Burundi, Chad, and Malawi (where energy access has not breached 15 percent
of the total population). Dependent upon location and income, people may experience blackouts
of 50 to 4,600 hours annually. Some governments have also been slow to implement new
projects due to high levels of bureaucracy and corruption such as those in Kenya and Nigeria.
Luckily, solar panels can be constructed at a single unit level and can circumvent the need for
government involvement.


The largest case of private energy expansion into less-wealthy communities is through a
start-up called M-KOPA. M-KOPA is the Kenyan-based pioneer of small-scale off-grid solar
power. They provide access to solar energy for as little as $1 USD a month via a system of
payments. After 24 payments, the user has paid the full cost of the kit, and they receive full

ownership of the product. M-KOPA allows for a mobile payment system and creates a cleaner,
cheaper alternative to fossil fuel powered generators. Analysts predict that M-KOPA may be the
first “unicorn” (a privately held startup company valued at over $1 billion USD) to be serving
exclusively African markets. Their success led to a range of competitors such as Fenix, Zola
Electric, and Power OffGrid, all of which bring electricity to isolated communities through a
similar business model. The benefits have been clear: 58 percent of households connected to off-
grid technology undertake more economic activity because of their home solar systems. Children
are able to do homework past sundown, cellphones can be charged at home, and adults can use
appliances which would otherwise be inconvenient to power.


Financing poses the biggest obstacle to building Africa’s clean energy sector. Estimates
of required investments, between 2015 and 2040, stand between $33 billion and $63 billion
USD, while current government spending is only about $12 billion USD. Fortunately, business
models similar to M-KOPA’s appear to be self-sustaining, and profits are reinvested for further
expansion. Additionally, bigger firms and departments have been picking up momentum in the
eyes of international investors and governments. China and the European Union have led the
charge with a variety of loan packages, while the U.S. has followed closely behind with their $7
billion USD “Power Africa” initiative. Global businesses have also seen an opportunity to close
this solar financing gap, with companies such as General Electric, ABB, Alstom, Siemens, and
Schneider Electric investing tens of billions of dollars.


Solar power also has the same shortcomings in Africa as it has everywhere else.
Researchers must build new ways to store and transport electricity, if the continent wants to
commit a larger share of the energy sector to photovoltaics. They also need to be continuously
developing new ways to improve the efficiency of panels; the most efficient panel design stands
at 33 percent of max efficiency, and the most common design is only at 18 percent. Finally, both
the price of producing photovoltaic systems needs to continue to fall, and manufacturing must be
streamlined within the continent to avoid market barriers.


The potential for solar energy in Africa is large and relatively untapped. For individual
communities, solar technology may have a similar effect as mobile phones, effectively avoiding
government-built infrastructure to cater to certain needs. For larger industries, schools, and
hospitals, solar energy could cut costs and avoid further losses brought on by blackouts. If policy
makers and investors continue to support initiatives in this sector, the social and economic gains
will be significant.

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