Solar can power African homes for $56 per year, says IRENA

Posted on :Saturday , 24th September 2016

Falling solar costs in Africa can drive solar boom on the continent as prices fall to $1.30 per watt for large-scale PV, and $1.90 per watt for mini-grids, finds new IRENA report.

The International Renewable Energy Agency (IRENA) has today published a report outlining how tumbling solar costs are making PV one of the cheapest means for powering many parts of Africa.

The report, titled Solar PV in Africa: Costs and Markets, finds that solar home systems now meet the annual electricity needs for off-grid households in Africa for just $56 per year – which is already below the cost of traditional off-grid power sources such as diesel and kerosene, and prices are continuing to fall.

At large scale, solar PV in Africa can be generated at a cost of $1.30 per watt because installation costs are lower than elsewhere in the world. IRENA calculates that the average global installed cost of large-scale PV is $1.80 per watt.

Since 2012, the cost of solar PV in Africa has fallen by 61%, and IRENA director-general Adnan Z. Amin believes that a similar cost reduction curve can be achieved over the next decade. “These cost reductions, coupled with vast solar potential on the continent, present a huge opportunity for Africa,” said Amin. “Both grid-connected and off-grid solar PV mow offer a cost-competitive means to rising energy needs, and bring electricity to the 600 million Africans who currently lack access.”

The global solar boom has left only light fingerprints on Africa so far. The continent added 800 MW of new PV capacity in 2014 – which double cumulative capacity – and 750 MW last year, but in comparison with other regions uptake has been slow. Grid-connected PV, particularly in sub-Saharan countries, is still something of a rarity, but most nations have in place policies and regulations to expedite the adoption of solar.

Off-grid solar applications, in the form of solar home kits and mini-grids, have thus far been the most accessible, affordable and scalable route to adoption. IRENA calculates that standalone solar PV mini-grids have installed costs as low as $1.90 per watt for systems larger than 200 kW, and as costs continue to come down – driven by greater investment in off-grid programs and the global fall in module and component costs – Africa could be a 70 GW market by 2030.

“Africa’s solar potential is enormous, with solar irradiation levels up to 117% higher than in Germany – the country with the highest installed solar power capacity,” said Amin. “It has never been more possible, and less expensive, for Africa to realize this potential.”

d.light raises $22m for off-grid ventures

This week, d.light – a social enterprise that manufactures and delivers solar lighting and power products for off-grid deployment – has raised $22.5 million in financing to grow its PayGo business in numerous remote and power-deprived regions across the world, including in Africa.

Series D equity to the value of $15 million was raised from KawiSafi Ventures Fund, Energy Access Ventures, Omidyar Network and NewQuest Capital Partners, with a further $2.5 million in debt funding raised through SunFunder. The remaining $5 million was acquired as grant funding, led by the U.S. Agency for International Development (USAID).

The financing will enable d.light to bring its pay-as-you-go model to millions more households globally, having already reached 65 million lives. “Consumer financing for solar home systems makes the technology significantly more affordable for our customers,” said d.light CFO Kamal Lath. “This funding will enable more families and business owners to enjoy access to the affordable, clean and reliable solar energy solutions they need to improve their quality of life.”

Specifically, the funding will be steered towards a ramp up of d.light’s D30 solar home system, which comprises a solar panel, mobile phone charger, battery pack, three solar lights, torch, and FM radio.

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