Fair Cape Dairies solar agribusiness

Is solar the green solution agribusiness needs?

Agribusiness contributes significantly to a country’s overall industry outlook, particularly because of its links to sectors such as chemical processing and manufacturing. Locally, SADC has identified agro processing as one of three regional priority value chains, along with mineral beneficiation and pharmaceuticals.

That being said, the economic challenge that farmers and agribusiness are facing is a tough one. Over the ten years up to 2017, electricity tariffs to state utility Eskom have risen by 356 percent – four times the rate of inflation over this period. The power utility has requested an additional 15% increase for the 2019/20 period, although the National Energy Regulator of South Africa (Nersa) seldom grants the full requested increase. The coal shortages this November that led to the shut-down of 11 power stations also highlight the uncertainty of the operating climate for South African industry.

In addition to soaring prices of electricity and uncertainty of supply, business in South Africa is affected by climate change. Agriculture is particularly affected by the cycles of rain and drought, as well as temperature, which are both affected by climate change. And because agriculture is, ironically, one of the leading causes of climate change, consumers are now demanding that farming practices meet stringent environmental and ethical standards.

Trade and Industry Minister in South Africa, Rob Davies, acknowledged that uncertainty in this arena is hampering economic growth, following his announcement in October that agro-processing is one of the sectors that government will be targeting with incentives to revive South Africa’s struggling economy.

Solar could give a growth spurt

Given this difficult context, it’s no wonder that Agro-processing is in need of bolstering in South Africa. Embedded generation, which is the small-scale production of power within the electricity distribution network, situated close to the place of consumption, is a great solution to counteract the explosive costs, and unreliability, of grid-tied energy. The cost, per kWh, of solar PV (the most common form of embedded generation)  has dropped dramatically in the past years due to increased uptake globally that has pushed down manufacturing prices. Adopting this cheaper source, close to the point of consumption, can lower the running costs of agro-processing plants significantly, giving them a leg-up in tough economic times.

Financed solar through PPAs

However, in order to purchase a solar PV system, businesses need to outlay capital, which might not be the most appealing option for agribusiness, whose capital budget is used for much-needed maintenance and plant upgrades. However, power purchase agreements (PPAs), which are a way of financing renewable energy systems such as solar, are an attractive alternative.

Renewable solutions are now at the point where they can provide a viable and cost-effective alternative for businesses in this sector.

Entering into a PPA in South Africa is a way for agribusiness to shield themselves from Eskom tariff increases, as it is possible to purchase renewable energy at a lower rate than what Eskom can provide, with a fixed tariff increase.

This is particularly pertinent due to Eskom’s recent 15% tariff increase application. Should a large portion of their energy come from solar, agribusinesses can use solar PPAs to shield themselves from the volatility of Eskom.

Renewable energy is also a significant mitigator of environmental harm, because it reduces industry’s reliance on coal-burning power generation, which releases greenhouse gases into the environment. Reducing greenhouse gas emissions is important for agribusiness, who often have sustainability targets.In fact, every industry should be concerned with addressing the realities of climate change – but none more so than agriculture, which is dependent on steady and predictable weather patterns.


Challenges and possibilities for agribusiness in South Africa

Solar PV power plants are also decentralised and can easily provide power in rural areas without having to erect new infrastructure, such as power lines. However, in South Africa, applying for a grid-tied solar PV system on Eskom infrastructure remains a challenge. Eskom’s independent power producer [IPP] connections do make provision certain for low- or medium-voltage connections, but they require a letter of exemption from Nersa, which is almost impossible to obtain without certainty around the IRP – which should be finalised in February, according to the Minister of Energy Jeff Radebe.

The energy landscape has changed significantly since that Eskom’s memo on low and medium voltage connections was released, and solar PV connections are now much more viable for companies and farms that are currently connected to Eskom infrastructure. Many more businesses would now like to opt for embedded power generation. The updated IRP restriction of only 200MW of embedded generation – which is where the low- and medium-voltage connections will be found – limits the generation capacity that the agro-processing industry urgently needs.

If more and more businesses lobby Eskom to allow low- and medium-voltage connections, they will be able to benefit from competitive electricity prices, while also reducing their carbon footprints. This will serve their stakeholders – and the environment they rely on – well into the future.

SOLA’s Robben Island Project wins SANEA Project of the Year Award

SOLA Future Energy has won SANEA’s Energy Project of the Year Award. The award, which recognises an energy project that has brought significant recognition internationally to South Africa’s energy environment, was given to SOLA for their design and build of Robben Island’s Microgrid – a project funded by the Department of Tourism.

The award was given based on the project meeting a stringent set of criteria, including:

  • Leadership
  • Innovation
  • Initiative
  • Role model
  • Visionary qualities
  • International recognition
  • Contribution has had impact in South Africa

The Microgrid has assisted Robben Island, historically a grim landmark of isolation and oppression, to evolve into a space for critical dialogue, remembrance, education, tourism and conservation.

The installation of a state-of-the-art microgrid on Robben Island is the largest combined solar and lithium-ion storage facility in South Africa. The Department of Tourism had set aside funding for a microgrid project with solar photovoltaic systems (PV) to improve both the island’s image and function. SOLA Future Energy was awarded the contract to design and install a PV farm comprising nearly two thousand high-efficiency modules that would generate in excess of 666 kWp.

The Robben Island Solar project is a prime example of a technologically innovative and sustainable initiative.

Since adopting a green energy system, the island has already produced 650 000 kWh of solar energy – an average of 3250 kwh per day – which has significantly reduced its reliance on traditional diesel generators, a noisy and expensive feature of the old system.

In the past, diesel had to be transported by ship from the mainland, primarily to desalinate the island’s water supply. The cost of purchasing and transporting the diesel formed a substantial portion of the island’s operating budget. From a financial perspective, the solar plant is estimated to save the island over R6 000 000 in energy costs each year. The initial cost of installing the solar plant is likely to be paid off within four years. The snowball effect of the reduced spend on fuel is, at this stage, difficult to quantify. However, the savings could be used to upgrade existing infrastructure and create jobs on the island.

Over and above the financial considerations, the noise and dust emanating from these generators were not creating a tourist-friendly environment. In terms of carbon emissions, the solar farm is expected to reduce the CO2 emissions of the island by 860 Tons per annum.

Mmekutmfon Essien, Senior Project Manager at SOLA Future Energy, receives award from the Chairperson of SANEA

Mmekutmfon Essien, Senior Project Manager at SOLA Future Energy, receives award from the Chairperson of SANEA

Solar finance options make solar PV available to large businesses in Africa

Finance options for rooftop solar PV in Southern Africa

If your business is considering a solar PV system, chances are that you have looked at the advantages of the system in terms of the reduction of electricity acquired from the national grid and reduced carbon emissions, but the most important question will remain: how will a solar system save money for your business?

Although many companies will choose to purchase their solar PV system outright – meaning that after paying a once-off amount for the system, they’ll be able to use the system’s free energy over the next 25+ years – this is not the only option available to go solar. As opposed to purchasing a solar system outright, there are several solar finance options requiring little to no upfront costs, allowing more flexibility for a company.

For companies that don’t want to outlay capex to acquire an embedded solar system for their building, a financed solar solution is a great way to enjoy the benefits of solar – including reduced electricity costs and carbon emissions – without the upfront capital. Solar financing options generally allow businesses to pay only for the solar energy they use, depending on the type of agreement that is entered in to. The following blog explores the various solar finance options for commercial and industrial businesses in Southern Africa.

Introduction to solar finance

Simply stated, solar finance is a way to enjoy benefits of solar PV without the upfront capital costs. Instead of owning the solar system from day 1, businesses can “rent” a custom solar system through various solar finance options. Businesses can therefore still enjoy a diversification of energy sources and reductions on energy costs, without acquiring the solar system themselves.

Solar finance could be a particularly appealing option if:

  • A business does not have capex budget for the cost of a solar PV system
  • A business has a portfolio of buildings and does not want to buy separate PV systems for each; removing the “hassle factor”
  • A business would like to achieve electricity cost savings without impacting the balance sheet
  • A business wants to plan accurately for costs of electricity and wants greater stability with regards to tariff increases

A solar finance option will still entail a custom built embedded solar system being installed on the client’s building, but instead of ownership for the system being with the building owner, it will belong to the finance provider. In this way it differs from wheeling green energy or buying renewable energy certificates. With an embedded solar system that doesn’t belong directly to the business, there is little reason to get very involved in your building’s electricity supply – as long as the power is efficient, reliable and cost effective. Furthermore, dependent on exact structure of the agreement, the solar asset remains off balance sheet, allowing for a greater return on assets.

In contrast, owning one’s own solar system means that the building will have its own embedded power generation that belongs to the business. If the business has a good Operations and Maintenance contract in place and wishes to spend Capex upfront, this is a good option.

However, business owners may want to have even less involvement: as long as the cheapest and most reliable form of electricity is available. In this case, it pays to enter into a solar Power Purchase Agreement with a company specialising in solar PV, who will concentrate on all aspects of the system’s design, operation and maintenance over the lifetime of the system. The business can thus maintain its independence, only paying for the electricity that it uses.

Market overview of solar finance options

There are three types of solar finance agreements which are generally used for commercial and industrial business owners in Southern Africa. They differ slightly in scope and objectives, but the outcomes are similar.

  1. The solar Power Purchase Agreement (PPA).

The first and most common solar financing option is the solar Power Purchase Agreement (PPA).

A business who enters into a PPA agreement will only pay for the electricity that the system generates on a monthly basis, similar to municipal or utility power. This tariff will increase gradually over the years, but dissimilar to utility tariffs, the increases are usually at a fixed escalation that is agreed upon upfront, shielding business from price volatility.

Often  included in this agreement is an “early purchase option”, or an option to purchase the solar PV system anytime after an initial period. This enables flexibility for the business, should they decide at a later stage to purchase the system rather than continuing to pay for the solar electricity through the PPA.

At the end of a PPA term, the client is usually offered the option to purchase the system for it’s residual value or the system ownership automatically transfers to the client for no value. This is an important matter that can affect the starting tariff of a PPA and potential clients must make sure they know who the system belongs to at the end of PPA before entering into it.

  1. A roof rental agreement

A roof rental agreement is the second type of solar finance commonly used. In this type of agreement, a business leases their rooftop to a solar provider who builds a solar system and enters into a PPA to sell the energy from the system. The company entering into the PPA does not necessarily need to be the same as the company leasing the rooftop, which allows for several possible arrangements.

For example, a building owner with tenants could earn rental income from having a solar system installed on their roof and then have their tenants enter into a PPA, who would benefit from cost savings of the PPA. Alternatively the building owner can be the lessor of the roof rental agreement as well as the offtaker of the PPA and decide how to pass on the PPA savings to his tenants.

This option provides commercial building owners a yield enhancement of their property, turning previously unused roof area into income-making asset.

  1. An equipment rental/lease agreement

The third common form of solar finance is an equipment rental or solar lease agreement which is very similar to a PPA, in that a client pays a monthly fee towards the use of a solar PV system. The major difference with this type of solar lease agreement is that the fee is not linked to the output of the system but is rather fixed. In other words, the client would pay a similar amount, agreed in advance, every month, rather than paying for the energy that is generated in a specific month based on an agreed-upon tariff.  

Fixed tariff escalations: risk or reward?

For conservative business owners, signing on to a fixed tariff escalation for energy costs might seem risky. After all, what happens if the costs of state power go down significantly in the coming years?

This is a fair question, and the best way of mitigating this risk is to ensure that the fixed escalation on a solar PPA will be significantly lower, on average, than the utility’s escalation. In general, tariff escalations for many Southern African state utilities are quite high and fluctuate significantly year on year. Generally PPA tariffs increases range between 5-10% per annum, whilst Eskom and NamPower have had 10-year average increases of 13.8% and 13.4% respectively.

The graph below demonstrates the average tariff increases for South Africa and Namibia’s utilities over the last 10 years. Whilst some years, the increase was lower than the 6% increase typical of a solar tariff, the average increase is much higher than 10% (the grey line demonstrates a typical PPA tariff increase of 6%).

PPA tariff increases in South Africa and Namibia

Furthermore the discount offered by the PPA in year one offers further buffer from the PPA tariff ever crossing the utility tariff.

Conclusion

Solar financing readily makes clean, renewable energy available to a range of energy users in the commercial or industrial property environment. Offering both flexibility and stability, they are a very helpful way of promoting the accessibility of solar PV solutions to business owners across Southern Africa.

Do you have a business that could benefit from a solar finance solution? Contact us for more information.

 

Going wire-free in Africa: Two examples

Our last blog post focused on how microgrids in Africa can enable electrification in rural communities to encourage economic prosperity without the need of centralised grid infrastructure. This blog explores two examples that SOLA Future Energy has designed, engineered and built – and how these might be replicated in African communities.

Robben Island – an isolated microgrid

Robben Island’s state-of-the-art microgrid is the largest combined solar and lithium-ion storage facility in South Africa. The microgrid, consisting of a combined solar PV facility and a battery bank, has enabled the island to move away from its diesel generators. Since adopting this green energy system, the island has already produced 650 000 kWh of solar energy – an average of 3250 kwh per day – which has significantly reduced its reliance on traditional diesel generators, a noisy and expensive feature of the energy system.

In the past, diesel had to be transported by ship from the mainland to fuel the diesel generators. The island’s load is primarily occupied by a desalination plant and to provide power for the 100 residents who live on the island. The cost of purchasing and transporting the diesel formed a substantial portion of the island’s operating budget. Over and above the financial considerations, the noise and dust emanating from the generators were not creating a tourist-friendly environment.

Robben island is now powered by the sun
Cedar Mill Mall – solar and batteries enabling development

Robben Island is a perfect example of how microgrids can provide electricity supply in rural contexts that are isolated from electricity grids. However, even grid-connected businesses can benefit from microgrid technology.

This is exactly why Noble Property Fund, developers of Cedar Mill shopping centre in Clanwilliam, a rural town in the Cederberg region of the Western Cape in South Africa, approached SOLA Future Energy to help with their power supply needs. Initially, the developers had applied for a 500 kVA connection from Eskom to power the facility, but the parastatal was only able to approve half of their demand requirements due to local constraints to the grid.

Faced with a major supply shortage, the developers were forced to consider utilising noisy and expensive diesel generators to make up the shortfall. As an alternative, SOLA suggested the use of solar PV and batteries to make up for the shortage, and has subsequently been appointed to integrate a microgrid into the shopping centre. Consisting of a 851kWp solar PV system with a 700kWh lithium ion battery, the microgrid makes up for the power shortfall – allowing the mall’s development to continue.  

“Incorporating a microgrid into the shopping centre turned out to be a financially attractive solution when considering how much energy could be harvested and stored from solar PV,” said Mario Dos Reis, director of Leasing at Noble Property Fund. “The shopping centre will be a blessing for small business owners in the town looking for an accessible and safe location to trade”.

As such, although the mall already had grid connection, the solar PV microgrid enabled the building of the mall to go ahead. This mall will become an economic hub of activity in the mostly rural region, providing jobs and economic spinoffs to the local community. The cost-savings of the building owners will trickle down to tenants, and hopefully make businesses more profitable as a result.

Cedar Mill Mall goes solar

Entasopia Kenya, powered by solar microgrid

Microgrids in Africa: rethinking the centralised electricity grid

Think about it: just two decades ago, many African towns were barely accessible because of the lack of telephone line infrastructure to key development areas. Today, cellular technology has allowed communications to leapfrog telephone line technology and provide communications without expensive, centralised infrastructure.

Mobile technology in Africa

A similar argument can be made about electricity. Now that both solar PV and battery costs have reduced significantly, microgrid technology promises to be an opportunity for Africa to leapfrog traditional grid-based electricity – a typically fossil-fuel heavy, centralised mode of providing power. 

Africa is a uniquely positioned continent, because of its widely-dispersed nodes of development over large geographic areas. As a result of this, the costs of building electrical infrastructure over geographically large areas have typically inhibited electrification, leaving large parts of African countries without electricity – in fact, Africa remains the least electrified continent in the world with only 35% of the continent having access to electricity.

Much of Africa remains disconnected from electricity grids

Microgrid technology is inherently decentralised, as it operates as a smart grid on its own, smaller scale, often using wireless technology. A cornerstone of microgrid technology is solar PV and batteries, since they are deployable in decentralised areas and do not require massive infrastructure to function. Combined, microgrids would seem to carry immense potential for Africa.

Despite this, a report published on PV magazine found that only 1% of electricity investment in the 20 least electrified countries was spent on decentralised energy production, despite at least 40% of electrification being suitable for microgrid deployment in these countries. This presents a massive opportunity – both for the unelectrified communities, as well as for electricity developers in Africa. Microgrids could be a sustainable – and affordable – solution for energy access in Africa.

But are microgrids proven to work? Take an example of Entasopia, a small village in the south of Kenya. The village, disconnected from Kenya’s national electricity grid, is supplied power by a small solar PV microgrid.  This microgrid enables 60 homes, small businesses, and even a petrol station to run, making the area a hive of economic activity and enabling growth even in the remote area. With this technology, schools and clinics can access electricity and businesses can sprout up, enabling economic empowerment in previously isolated areas.

Entasopia Kenya, powered by solar microgrid

Entasopia, Kenya, powered by solar microgrid

The Robben Island solar PV microgrid is also a great example of converting an existing diesel generation system to a smart PV and battery coupled microgrid. Even though the island was already supplied by diesel generators, the cost of diesel meant that the addition of solar PV and batteries still made perfect business sense – it’ll pay itself back in about 5 years. The island’s activities – including the bustling harbour and desalination plant – are now powered almost entirely by clean energy, and the ecologically sensitive island is no longer affected by the diesel and noise emissions from the generators.

Robben Island solar PV microgrid

Robben Island solar PV microgrid

The fact that microgrids make business sense not only for completely disconnected communities but also for those with existing, fossil-heavy grids (such as Robben Island) show demonstrable effectiveness for further applications – such as mining. Mining activities can now rely on PV and battery coupled microgrids, where previously they relied on diesel generation. These microgrids provide a solution that can not only save mining operations money, but also reduce the environmental impact of the mining activity.

SOLA Future Energy is a proudly African company, and we believe in the potential that affordable, clean energy can bring for the whole continent. Despite its historically slower economic growth, we believe that Africa is in a unique position now, particularly because of the way in which new technologies can assist the continent to spur development. Get in touch with us to find out how microgrids could assist your business or community.

Solar mining in Africa

How the mining sector in Africa can benefit from solar energy

The mining sector is one of Africa’s largest, with much of the continent being richly endowed by mineral resources. However, the mining sector struggles in Africa compared to other regions in the world – partly because of economic and political uncertainty.

A key aspect to securing a long-term return in a mining operation  in Africa, therefore, is creating a stable, well-run operation which will encourage investment and diversify economic spin-offs for local communities. Energy supply is a key aspect of this, and it is important that energy supply is both affordable, secure and sustainable.  

Why is solar a relevant consideration for the African mining sector?

Continued pressure on cost minimisation in mining

The mining sector has taken a knock in recent years, particularly due to economic pressures from global markets. This has squeezed resources available for mining operations, increasing the pressure for efficient and slick operations. For energy-intensive mines (many mines spend up to 20% of their total input costs on energy), it is important that electricity supply is as cheap, and reliable, as possible.

Many mining operations in Africa are located remotely, with electricity only being provided by diesel gen-sets. Because diesel not only needs to be bought, but also transported to the site of the mine, this method of providing energy is extremely expensive and encompasses potential supply disruption risks – particularly in Africa, where road infrastructure is often unreliable.

Because of the falling costs of solar PV and batteries, microgrids are seen as a reliable solution for the electrification of Africa.  Microgrids offer a reliable electrical connection where there is no grid available, and/or the existing grid cannot output the required power and voltage. Properly programmed microgrids provide continuous, reliable power by switching sources seamlessly when needed. Over and above this, one of the cheapest microgrids can be formed from solar PV, battery storage, and gas to supplement supply. These microgrids can even be financed by third parties, resulting in immediate savings for the mining operation with no initial capex outlay.

Increased focus on sustainability and environmental impact of mines

Global interest in sustainability has caused reflection in the mining sector, which, despite providing much of the world’s economic activity, often has negative social and environmental impacts. On top of this, recent international codes and reporting standards, such as the Global Reporting Initiative, encourage mining companies to become increasingly transparent about their social and environmental impacts – and report on the “triple bottom line”.

For mining companies, reporting on their environmental footprint will include their greenhouse gas emissions, or “carbon footprint”.  

How companies report on their greenhouse gas emissions

Scope 1 emissions relate to a company’s direct combustion of fuel. In the case of a mining company, this would include any transport fuel used when transporting goods to and from the mine, as well as the diesel fuel burnt, if diesel generators are being used.

Scope 2 emissions relate to purchased electricity. In the case of a mine, any electricity that is generated by the national grid would be applicable here.

Scope 3 emissions relate to the supply chain emissions of the operation – whether incoming or outgoing. In the case of a mining operation, this would include emissions released in the processing, smelting or disposal of the mined products.

Depending on their commitment to transparency, sustainability reports could include reporting on scope one, two and three emissions. On top of this, shareholders expect a commitment to a reduction in the overall carbon footprint. Switching over to green energy is an important step for mining businesses to reduce both their scope 1 and 2 emissions.

Is solar risky for mining operations?

Avoiding operational risks is a key aspect of being successful in the mining industry, which is recognized as being traditionally quite conservative and risk-averse. Given that any downtime or disturbance to the operations of a mine can lead to very large financial losses, any risk associated with deploying new or untested technologies is not an option.

As such, historically, unfamiliarity with solar technology has made mine managers reluctant to implement solar solutions that could create significant cost savings. Yet increasingly the “proof of concept” for solar energy and the knowledge of successfully implemented systems is turning mining managers around to the benefits.

Solar is by now a mature technology that has been proven in several mining operational case studies around the world, and reliability of the systems can match and exceed what an existing diesel genset (or grid) offer. For example, a hybrid system in Western Australia has allowed the gold-copper mining operation to save 20% on diesel costs. Even a Russian precious metals mine is converting to solar energy, despite Russia’s low irradiance levels.

Also on the African continent, solar energy installations at mines are becoming more common, with an increasing number of solar systems being installed or considered at mines in Namibia, Botswana, Tanzania and Ghana. Such projects are often offered on a financed basis – for example, for a gold mine in Burkina Faso, signing a 15-year renewable energy Power Purchase Agreement (PPA) for 15 MW of solar power was the best option to save on operational costs.

SOLA Future Energy has designed and constructed hybrid solar-battery-diesel systems that have a wide applicability in the mining sector. Should you be involved in mining operations or its financial management, we are keen to meet to discuss your requirements on-site and execute a thorough feasibility assessment, and create a system design tailored to the specific operational conditions of your mine. Feel to reach out to our team members dedicated to mining here. SOLA Future Energy has also developed a solar feasibility tool to assist mines with creating a high-level assessment of the business case for solar at their operations. Click here to access the feasibility tool.

Africa has immense solar PV potential. Source: Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

5 African countries that are perfect for solar PV

Although Africa has historically been labelled “the dark continent”, actually nothing could be further from the truth. Africa has fantastic solar resource, and, unlike the finite fossil fuel resources which have historically been extricated from the continent, solar energy renews every day, and can be used directly where it lands. Coupled with the dire need for affordable, decentralised energy to enable economic growth, solar PV is the perfect resource to facilitate Africa’s progress. Along with this, the falling costs of solar PV are set to be a positive boon for Africa.

The following blog post explores 5 countries that are perfect for solar PV deployment – and why it makes sense for commercial and industrial businesses in these areas to adopt solar in their operations.

What is irradiance or solar yield?

When thinking about solar PV, the terms “irradiance” or “insolation” are used to describe the amount of potential solar power received by an area. In other words, its the amount of solar energy that is hitting the earth over a period of a year. When converted into electricity via solar panels, the resulting output is called the “solar yield” and this underlies the business case of a solar system at a given location. For example, if the solar yield is calculated to be 1250 kWh/kWp for a given site, it means that for every kilowatt of solar installed (roughly 3 panels) at that site, 1250 kWh of solar energy could be generated per year.

Note: the solar irradiance maps used throughout this article are provided by the Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

1. Kenya

Nairobi is a perfect city for solar PV

With Kenya’s large population of 45 million and its booming industry, it is one of Africa’s economic powerhouses. Kenya is known particularly for its industries in small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), but it has several other industries, including: agricultural products, horticulture, oil refining, aluminum, steel, lead, cement, commercial ship repair and tourism.

Part of what makes solar coupled with storage so appealing for commercial and industrial businesses in Kenya is the fact that they are frequently exposed to power outages – often for an extended periods of time.

Kenya’s government has also created a New Energy Policy, which highlights the need for more rural electrification and private or community-owned renewable energy providers.

Kenya solar irradiance levels. Source: Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

Irradiance in Kenya

Kenya gets great solar irradiance levels, making most of the country perfect for solar PV. In Nairobi, the solar yield can be as high as 1520 kWh/kWp. This is more than 50% higher than Germany, one of the countries with the highest installed solar capacities in the world, which only has an average solar yield of 950 kWh/kWp. It serves as a powerful reminder of the huge potential for solar in Africa.

2. Namibia

Namibia has huge solar PV potential

Desert in Namibia

Known for its large, open deserts, Namibia is perhaps one of the most quintessentially solar-friendly countries. From an irradiance perspective, Namibia generates 2047 kWh/kWp of solar in their capital, Windhoek,and its lack of cloud cover make the solar power generation very reliable. Add to this its pristine natural environment, and using the quiet, emission-free power of solar PV makes it a no-brainer for the southern African country.

More than just a desert, though, Namibia’s major industries include meatpacking, fish processing, dairy products, pasta, beverages, and mining (diamonds, lead, zinc, tin, silver, tungsten, uranium, copper). In fact, mining is the largest contributor to the economy and provides 25% of the country’s income.

Because the mining industry has emphasised the incorporation of sustainability in its core operations, solar PV is a great choice for mining companies in Namibia. The remoteness of many of the mines means that many of them rely on diesel generators to function. Mines using this method of electrification lend themselves perfectly to solar PV and energy storage  microgrids, which are cheaper and much cleaner than diesel (just have a look at our blog post on why Robben Island will save through its PV and battery storage microgrid).

On top of this, the government launched a REFIT programme, signing 14 small solar renewable energy projects of 5 MW each, showing its commitment to make full use of its exceptional solar resources and making Namibia arguably the perfect country for solar PV.

Namibia solar irradiance levels. Source: Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

3. Nigeria

Nigeria has great solar PV potential

Lagos, Nigeria

With the largest population in Africa, Nigeria has huge potential for growing its economy. However, the country has struggled with frequent power outages, often over lengthy periods of time. In addition to this, more than half of the population does not have access to electricity, meaning the the generation capacity of Nigeria’s electricity system is underutilized, despite the system failing to meet demand.

Nigeria is home to several booming industries, including crude oil, coal, tin, columbite, rubber products, wood, hides and skins, textiles, cement and other construction materials, food products, footwear, chemicals, fertilizer, printing, ceramics and steel. All of these industries, however, are affected by lack of reliable power sources. This could be why the Nigerian government signed 1 GW of Power Purchase Agreements from renewable sources in 2016 and is planning to grant a further generation licenses.

Because of the grid-reliability issues in Nigeria and the expense of diesel for fuelling operations, going off-grid entirely with solar PV and storage makes the most sense for many Nigerian businesses. Irradiance in the capital city, Lagos, averages 1452 kWh/kWp, adding to this business case.

Nigeria solar irradiance levels. Source: Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

Irradiance in Nigeria

4. Uganda

Uganda has great potential for solar PV

Kampala, Uganda

With Uganda’s rich natural resources and technological innovation, it is one of Africa’s most underrated countries. It’s naturally-driven economy relies on industries such as sugar, brewing, tobacco, cotton textiles, cement and steel production. Much of the country remains without electricity connection, with almost 31 million households not connected to the grid and just under half of people living in cities having electrical connection. The rural location of much of the country’s population and its natural-heavy industries mean that off-grid solar PV, combined with energy storage, is a great option, particularly in the agro-processing of things like sugar, tobacco and textile production.

 

On top of this, the country’s solar resource is excellent, with an average irradiance of 1330 kWh/kWp in the capital of Kampala. Combined with the country’s target of 1.5 million new grid connections by 2020, solar PV is a great option to fuel production and economies, particularly in the agro-processing sector.

Uganda solar irradiance levels Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

Irradiance in Uganda

5. Ghana

Ghana has great potential for solar PV sources

Accra, Ghana

Ghana has historically been known for its gold production, and subsequently for its production of chocolate – it is still the world’s second largest producer of cocoa. However, the country has  several additional booming industries including mining, lumber, light manufacturing, aluminum smelting, food processing, cement, small commercial ship building and petroleum.

Ghana already has 75% electrification levels – however, recent hikes in electricity tariffs have provided some doubt as to the ability of Ghanaian citizens to keep their connection to the grid – and the damage these might do to its industries.

The average irradiance in Accra is 1410 kWh/kWp, meaning that there is great solar resource, ready for deployment across several sectors. The capital provides a perfect option for embedded generation of electricity, such as rooftop solar PV, either to supplement their grid usage and bring down electricity costs, or to go off-grid entirely.

The government also sees solar energy as an important solution for Ghana’s energy needs. Recently elected President Akufo-Addo has launched a very supportive energy strategy which sees a large role for solar, including both utility-scale solar PV projects, rooftop solar as well as micro-grid systems.

Ghana PV irradiance. Source: Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

Irradiance in Ghana

Conclusion: the Light continent

Although under represented, many African countries are perfect for the harvesting of solar resources. As a cleaner – and often cheaper – form of energy, solar PV deployment in Africa is a great opportunity for African business to thrive.

SOLA Future Energy believes that the future of Africa is powered by the sun, and is actively pursuing and executing projects in a growing number of African countries. If you require the development of a solar PV project on the African continent, please speak to us.

Africa has immense solar PV potential. Source: Global Solar Atlas, owned by the World Bank Group and provided by Solargis.

South Africa’s Solar Resource Compared to the Rest of the World

The sun is without a doubt one the most reliable and abundant natural resources in South Africa. Professor Detlev Kröger, Senior Researcher and Emeritus Professor in the Department of Mechanical and Mechatronic Engineering at Stellenbosch University claims that South Africa is one of the best places in the world to develop solar power. The commonly known irradiation maps clearly show the intensity of the sun, and where it is most heavily present on the African continent – mid Northern and Southern Africa, which lies almost within the tropics, where the sun is intensified.

Despite places such as Europe only having around 1000 hours of sun per year (1 Sun hour = 1000Wh/m2), these areas have been successful in installing the majority of the world’s solar power. There are a number of reasons why Europe owns most of the world’s leading solar power plants, namely: higher energy costs, more environmental awareness and stronger economies able to subsidize the initial solar energy projects.

As the solar industry is relatively new within South Africa it is important to recognize the amount of sun that SA has compared to other parts of the world and furthermore, to recognize the increased potential this has for solar PV developments to be successful.

According to the South African Department of Energy, “Most areas in South Africa average more than 2 500 hours of sunshine per year, with an average solar-radiation level range of between 4.5 and 6.5kWh/m2per day.” This, coupled with the solar revolution the world markets, as well as South Africa, are currently experiencing, represents a huge opportunity for the South African market to take advantage of!

Furthermore, according to South Africa Info, South Africa is considered a “relatively dry country,” with national rain levels remaining low around an average annual rainfall of only 464mm compared to the world average of 806mm. Solar PV cells do not require water to operate. In fact, the less rainfall the more chance of sunshine, resulting in more generated energy from solar PV. This represents another great advantage of South Africa’s solar resource.

Most of South Africa’s large capacities for development exist in areas such as The Karoo. This is another advantage for South Africa as these lands are sun drenched, relatively flat, have sparse levels of vegetation and a low population density. In comparison, other parts of the world such as Italy, Germany and the US often encounter overlapping between developed/commercialized areas and high irradiation areas, which inhibits the possibility to take full advantage of the solar irradiation exposed at these places. These factors all contribute to outstanding development opportunities for the South African solar industry.

world_insolation_map

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