Africa’s Solar Challenges: Massive Untapped Potential Shows Up Tiny Production

Africa's Solar Challenges: Massive Untapped Potential, Minute Production

With nearly one-fifth of the world’s population today, Africa accounts for less than 3% of the world’s energy-related carbon dioxide emissions to date and has the lowest emissions per capita of any region. But still, Africans are facing the worst consequences of climate change in the world due to several reasons. Following that, Africa also has the potential for 40 percent of solar energy in the world but produces just 1.7% of the global deployment of solar capacity. This compared with China, Japan, and the UK shows that these countries that are smaller than Africa produce more solar power than the entire continent.

According to a media report, the Northern and Southern African regions have the greatest practical potential, while Central Africa ranks last. Namibia, Egypt, Lesotho, Libya, and Botswana are the top five countries in terms of average practical potential. According to IEA, Africa is home to 60% of the best solar resources globally, yet only 1% of installed solar PV capacity. Solar PV – already the cheapest source of power in many parts of Africa – will outcompete all sources continent-wide by 2030. 

In Kenya, for example, more and more people are moving towards off-grid solar plants that they are setting up at their homes due to the unreliability of the solar grid and rising prices of fuel and electricity. A World Bank report has also shown that the number of mini-grids that support a cluster of homes or businesses has grown from 500 in Africa in 2000 to 3,000 in 2023. The International Renewable Energy Agency (IRENA) reported that the cost of solar decreased by 77% between 2010 and 2018.

In Africa, mini-grids are likely to be the lowest-cost energy solution. IRENA report also showed that the total installation cost of solar PV projects would continue to decline in the next three decades in Africa. Amid mini-grids being used by households in several African countries, industries, and companies are also heading towards the mini-grids in African countries. A report by the Africa Solar Industry Association (AFSIA) shows industrial solar power installations or captive solar in Africa grew by over 60% in 2022, taking cumulative solar capacity past the 10 gigawatts (GW) mark.

As the trend for mini-grids grows in the continent, rooftop solar is gaining pace due to lower installation costs while eliminating the need for space. The rooftop solar market in South Africa is projected to grow at a compound annual growth rate (CAGR) of more than 9.5% up to 2026. The World Bank, on the other hand, has committed more than $1.4 billion to mini-grids over the next seven years, through 38 projects in 29 countries. These include the deployment of 3,000 mini-grids by 2029, to reach over 13 million people.

Further, the households have been setting up and consuming solar power through the PayGo model that combines the latest solar technology with fintech to enable first-time consumers to buy a solar unit on a rent-to-own basis. Repayments are made by mobile daily enabling the users to own their units in a short period.

Apart from the trends hovering across the continent, West Africa can also be considered a microcosm of the larger challenges that the continent faces in the growth of solar installation. The headwinds involve National Power companies lacking the required expertise and implementation finesse, as per a report published by UNDP. The report also delved into the issue of low-quality equipment and low-skilled labour further discouraging the households. West Africa is also facing the impediment of a lack of investment coming its way for solar projects amid the unavailability of the required data.