IRENA Report: African Solar Costs & Markets

african solar costs markets

A new report from the International Renewable Energy Agency (IRENA), “Solar PV in Africa: Costs & Markets,” finds that solar PV is quickly changing the reality on the continent, which currently relies heavily on hydropower.

The report states that “Solar PV module prices have fallen by 80% since the end of 2009, and PV increasingly offers an economic solution for new electricity generation and for meeting energy service demands, both on- and off-grid.” Lower prices for solar PV, concentrating solar power (CSP), and wind power may rapidly shift Africa’s renewable energy markets in the next few years.

Positive Signs for African solar costs and markets

Some highlights of this extensive document include the following:

  • With recent cost reductions, solar PV now offers a rapid, cost-effective pathway to providing modern energy services to the approximately 600 million Africans living in energy poverty.
  • A positive sign is that many of the latest proposed utility-scale solar PV projects are targeting competitive installed cost levels that are comparable to today’s lowest-cost projects.Mini-grids utilising solar PV are potentially an attractive electrification option. The installed costs of solar PV microgrids vary widely, but recent and planned projects show examples of competitive cost structures.
  • The solar home systems market rapid growth is driven by lower system costs and innovative new business models. Yet Africa’s systems, much smaller than their counterparts in developed countries, have a higher cost/kW as they require batteries and charge controllers to ensure stable output. Still, solar home systems in off-grid Africa are providing better-quality energy services at the same or lower cost as poor-quality lighting from kerosene lanterns. Their use, as well as that of solar lanterns, is growing rapidly.
  • Cost reduction opportunities for solar home systems exist for the core hardware components of modules and batteries, but also for the balance of system, including all non-hardware, costs. For microgrids, the challenges are more varied given the multi-stakeholder engagement required, and therefore project development costs dominate the total cost reduction opportunities.
  • A coordinated effort that targets efficient cost structures in new markets would improve the efficiency of policy support and accelerate deployment.

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