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Solar power continues to grow in popularity, with a number of new business models emerging in order to meet increased demand. But despite gaining favour in many markets around the world, there are still some regions that are yet to reap the benefits of this renewable energy – a fact that is made all the more troubling by the power inequality in such areas. In Africa, for example, only half of the continent’s vast population currently has access to a reliable source of electricity.
Fortunately, solar is a scalable power-generation technology that is well suited to the task of electrifying Africa. From the moment a single photovoltaic (PV) cell comes online, electrical current starts to flow; as more cells, modules, panels and arrays are added, power output rises proportionally. Over time, this growth in solar capacity will allow a greater number of people across the continent to gain access to electricity.
Further, it’s important to note that solar power can be consumed onsite without the need for expensive transmission lines and doesn’t suffer from transmission losses. These are significant benefits over centralised power models, which require extensive infrastructure and significant investment to ensure residents receive electricity.
Few technologies can rival the bankability and scalability of solar power. Nigeria, for example, has found great success with Green Village Electricity, a local distributed energy service company that operates more than 20 solar PV plants across the country. Each of the firm’s microgrid facilities can generate enough energy to power up to 2,000 households, businesses, schools and municipal offices per village.
As a result of this success, almost every country in the Economic Community of West African States is following Nigeria’s lead, with decentralised solar power generation now moving from a vague election promise to official public policy. Some countries have even created decentralised energy agencies that are tasked with fostering greater collaboration between governments, investors, non-governmental organisations and local populations. Off-grid applications are also helping to ensure residents have a reliable source of electricity.
As well as providing comfort and security to citizens, this greater access presents many growth opportunities, notably through the maintenance of new ecosystems and pay-as-you-go services. For this new business model to work, though, bankability is key.
A key economic driver behind the adoption of solar power is the falling cost of onsite storage. Cheaper solar batteries allow telecoms operators to install more cellular towers, which, in turn, help to spur economic activity in the local area. The same is true of data centres, gas stations, water treatment facilities and other critical services. At Schneider Electric, for example, we have built a unique solution that provides a high-end real estate development in South Africa with energy independence. We have achieved this by combining community-level centralised storage with decentralised power generation.
Homeowners paying to be off-grid want the process to be easy and simple – they don’t want to have large and potentially dangerous battery banks or noisy diesel generators that require constant refuelling standing in their garages. Instead, they want the benefits of power security without having to adjust their lifestyles or pay premiums.
Africa is currently spending $1.2bn per annum on diesel generators for telecoms tower farms that are polluting the atmosphere. By implementing a solar-diesel hybrid system, however, the impact of CO2 emissions can be reduced and operating expenditure lowered. Solar power has the potential to amplify this relationship further than any other decarbonised energy generation technology.
Scalable, affordable and easy to distribute PV technology levels the playing field by ensuring everyone has access to reliable electricity. Indeed, African countries that embrace solar power enjoy a competitive advantage that few western nations can match. Against this backdrop, Africa is proving fertile ground for new business models and cleaner forms of energy.