Utilising the biggest natural resource of them all: Africa’s 2021 solar boom

In Niger’s eastern region of Diffa, across the Sahara desert, lies Agadez, a UNESCO World Heritage site, best-known for being the gateway to the Sahara. The town’s historic centre dates back to the 15th century, a captivating display of mudbrick architecture and cultural gems. The beautiful town is also known by its less flattering label as the ‘frying pan of the world’. Considered to be 1 of the top 3 hottest places on earth according to the US National Aeronautics and Space Administration (NASA), Agadez boasts 3,483 hours of sunshine per year, and rain that evaporates before it even hits the ground. Aggregate data stemming 20 years of Nasa’s research showed that the city received sun radiation averaging a sweltering 6.78 kilowatt hours per square meter per day, enough energy then to produce electricity to heat water each day in a typical American home. And in African terms, enough energy for an entire village with 500 residents. Africa has 7 of the 10 sunniest countries on earth: Chad, Egypt, Kenya, Madagascar, Niger, South Africa and Sudan. It also has 770 million people without electricity access, according to International Energy Agency (IEA) data. Chad, for example, has a 8.5% electrification rate, one of the lowest in the world. The Sahara desert, and most of the Nile basin, act like a giant solar panel. In a continent often stirred by its natural resources, sunlight is becoming increasingly crucial, as countries finally start to tap into their extremely bright potential. A perfect fit Looking at the sector’s characteristics, it’s hard to think of a more perfect fit for Africa’s needs and resources. The benefits of solar power perfectly answer the continent’s infrastructure needs, as off-grid solar panels provide even the most remote, last-mile communities with electricity, surpassing the need for pricy, archaic national grids. The ever-decreasing prices across the sector’s value-chain and the ability to use small-scale panels are allowing millions of families in Africa’s poorest areas to enjoy electricity in their homes for the first time. Alongside the benefits, the sector’s disadvantages are almost a non-issues when it comes to Africa: while developed countries find it difficult to maintain their local population’s electricity consumption through solar power, Africa’s power consumption in private homes, businesses, and even institutions, is the lowest in the world, making solar extremely viable. And lastly, while sunlight can be scarce across Europe, where long months of rain are often the case, Africa is one of the sunniest places on earth, and the vast lands across the continent make it easy for governments to install large-scale projects. A record-breaking month With the reasons mentioned above, alongside global and local investments, private market interventions, and the rising importance of sustainable energy, Africa’s solar sector has been exponentially growing for the past decade. According to multiple estimates, more than 100 million people have already been connected through solar power, and the modest estimates show 30-40 million more to be added each year by 2030 and that number could very well double, while Kleos, a consultancy firm, recently valued the market at $24 billion USD. All these numbers, and the exponential growth has established the fertile ground to June 2021 being a record-breaking month for the solar field in the continent. In the past few months Africa’s off-grid systems were joined by a promising sub-sector: Commercial and Industrial (C&I), large-scale projects that we often see in industrialized countries. These are massive projects that produce large amounts of electricity that are streamed directly to national grids, upsurging the overall electricity supply, while allowing African countries to add meaningful amounts of clean, cheap energy to their mix. According to the Solar PV report by the International Renewable Energy Agency (IRENA) installed costs for power generated by utility-scale solar PV projects in Africa have decreased as much as 61 percent since 2012 to as low as USD 1.30 per watt in Africa, compared to the global average of USD 1.80 per watt. The report shows that mini-grids utilising solar PV and off-grid solar home systems also provide higher quality energy services at the same or lower costs than the alternatives. Stand-alone solar PV mini-grids have installed costs in Africa as low as USD 1.90 per watt for systems larger than 200 kilowatt. Solar home systems provide the annual electricity needs of off-grid households for as little as USD 56 per year, less than the average price for poor quality energy services. To realise just how meaningful is the growth in the solar energy sector, we can examine the overall production capacity of solar systems across the continent. According to another IRENA report, in 2010, 239 MW of electricity were produced by solar resources. In 2019, that number was 30 times as high at 7.4 GW. You think that is substantial? Well, in june 2021 alone multiple projects in a total scope of 1.9 GW were announced, catapulting a trend that is only gaining more and more traction. Only the beginning The outsurge of projects and budgets allocated to the field substantiate Africa’s role as a global renewable energy powerhouse. One of the signs to that position can be found in the “1GW club”: an exclusive list of 37 countries that are currently producing over 1GW of electricity through renewable energy resources. Until today, only 2 African countries (South Africa and Egypt) were members, but with the growing project numbers announced in 2021, 9 more are expected to join in the near future. The record-breaking month, coming after exponential growth witnessed in the past few years, have made Africa’s solar market one of the hottest investments opportunities world wide, and it is only the beginning. The perfect fit between the technology and local market needs, decreasing prices of solar systems, and the global transformation to renewable energy sources are set to push the sector into new found heights, establish Africa’s global leading position, and above all - supply hundreds of millions with clean, affordable power for the first time ever. The writer is an entrepreneur and investor,leading sustainability-driven companies in Africa and the Middle East

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Utilising the biggest natural resource of them all: Africa’s 2021 solar boom