Solar energy conjures up images of roof panels. The portrayal is especially true in Africa, where an estimated 600 million people lack access to electricity – electricity to keep lights on and electricity to keep the COVID-19 vaccine frozen.
The African economy has experienced solid growth of 3.7% on average across the continent. This expansion can be further fueled by solar electrons and the absence of CO2 emissions. According to the International Renewable Energy Agency (IRENA), as many as 30 African countries have power cuts because supply lags demand.
“Grid reliability is a major issue in Nigeria and many other parts of Africa,” said Tony Carr, CEO of Starsight Energy, in an interview. “This makes expensive and heavily polluting on-site diesel generators not only back-up, but often the primary sources of power. In addition, where reliable grid conditions exist, electricity costs can be quite high in some countries. Africa’s phenomenal size means that large areas of the continent have no grid at all. “
Think about this predicament for a moment. Electricity is the cornerstone of any economy. Gross domestic product per capita is typically three to five times higher in North Africa where less than 2% of the population lacks reliable electricity, according to IRENA. In sub-Saharan Africa, the problem is much more acute and will require billions of new investments.
By 2050, Africa is expected to grow from 1.1 billion people today to 2 billion, with a total economic output of $ 15 trillion – an amount that will now be partly used for transport and energy sites.
Electricity also gives life to medical facilities. Reuters made a video on how “solar freezers” are used – freezers capable of storing COVID-19 vaccines. The video refers to a study in the Journal of Global Health, which indicates that nearly 60% of health facilities in sub-Saharan Africa do not have access to electricity. But Power Africa and a network of public groups set up by USAID are winning the funding to set up off-grid solar-powered health centers.
“Economic growth, changing lifestyles and the need for reliable access to modern energy should require that energy supply be at least doubled by 2030,” says IRENA study . “For electricity, it may even be necessary to triple. Africa is richly endowed with renewable energy sources, and now is the time for smart planning to ensure the right energy mix. “
Brighter lights to come
The good news is that, excluding South Africa, around 1,200 megawatts of off-grid solar power are expected to come online this year in sub-Saharan Africa. That’s more than double the amount ordered in 2018, says BloombergNEF. He adds that regional electricity markets will develop, allowing countries to buy electrons from surplus countries. He argues, however, that a lack of private investment in transport infrastructure and small-scale fleets will hamper this growth.
In total, more than 700,000 solar systems have been installed in the region, says the World Bank. IRENA adds that renewables, in general, can provide 22% of the African continent’s electricity by 2030, up from 5% in 2013. The ultimate goal is to reach 50%: hydropower and electricity. Wind power could reach 100,000 megawatts each while solar power could reach 90,000 megawatts. To get there, however, an investment of $ 70 billion per year is required. This represents 45 billion dollars per year for production capacity and 25 billion dollars per year for transport.
One potential remedy is “energy as a service”. Starsight Energy uses such a model, which removes solar panels, battery storage and cooling assets from the balance sheets of its commercial and industrial customers. Starsight, for example, will perform an energy audit and design a tailor-made solution based on energy demand. It then maintains this solar system at no upfront cost. Instead, the commercial or industrial facility will pay the vendor a monthly fee for monitoring, maintenance, and support throughout the lifecycle of the system.
Globally, energy as a service is expected to reach $ 173 billion by 2027, according to Grand View Research. The main driver is the sharp drop in prices for solar panels, about 80% of what they were ten years ago. The Asia-Pacific region is expected to adopt this business plan – a plan that sub-Saharan Africa may also adopt. And business enterprises with limited access to capital and little experience in energy management are the best prospects. According to the research firm, the market leaders in this area are: General Electric
While reliability and affordability are paramount, “Our industry may face regulatory challenges as governments continue to develop policies for renewable energy development,” says Carr of Starsight. “Currency risks can also be a problem.”
Access to energy offers hope for a stable economic life as well as a more vibrant and COVID-19 free existence. An expansion of off-grid solar power in Africa could help secure this outcome. And a booming continent is good for everyone and especially for energy companies who want the region to shine.