Off-grid solar PV: Is it an affordable or appropriate solution for rural electrification in Sub-Saharan African countries?

Abstract

With insolation levels ranging from 4 to 7 kW h/m(2)/day, the African continent receives a higher amount of solar energy on its surface than the rest of the world. Hence, investments in solar electricity generation projects in African countries have the potential to be economically attractive. This paper reviews the feasibility of off-grid solar photovoltaic (PV) systems in SSA, focusing on five major issues in the context of falling system costs: cost-effectiveness, affordability, financing, environmental impact, and poverty alleviation. Over time, solar PV system costs have fallen dramatically across the globe. This is also the case in SSA, yet the costs prevailing in SSA are much higher than the world average owing to political, financial, and technological risks. Solar PV power systems continue to be an extremely costly source of electricity for the vast majority of the rural poor in SSA. The levellized cost of energy for solar PV systems is high, at US $0.83 per kW h. With an annual rate of decrease of PV system costs of 4% and 7.67% it is estimated that it will take from 8.7 to 16.9 years for solar home systems for electricity generation to become competitive with conventional diesel generators. The cost of reducing greenhouse gas emissions through rural solar PV electrification is in the range 150-626 US$/tCO(2), which is extremely high compared with the current price of traded CO2 emission permits or current estimates of the social cost of carbon of approximately 39 US$/tCO(2). Off-grid solar PV systems are not feasible financially or economically for rural households of SSA unless these technologies are subsidised from abroad. If the policy of a country is to encourage rural electrification, it should carry this out through a systematic expansion of either local or national grids rather than household-level solar PV systems. (C) 2016 Elsevier Ltd. All rights reserved.