HAMBURG, Germany — Contradictory to what one might expect is solar power output in Africa. Africa has 60% of the world’s best global solar resources, yet logs behind with only 1% of installed solar energy capacity. In agreement, Fatih Birol, executive director of the Paris-asked energy body, says “In my view, the biggest barrier in front of African economic development is lack of energy access.” With an ever-increasing market in sustainable energy, businesses have spotted an opportunity in the industry of solar power in Africa, overcoming high import tariffs, regulatory barriers and inexperienced African solar company companies. For some, it has become a big success.
Access to Energy for Communities
As energy prices and possible shortages are a heated discussion amongst western countries currently, millions of Africans still lack basic access to electricity. In fact, half of Africa’s population cannot operate a fridge to preserve food, turn on the light when it gets dark or cool down facilities in extreme heat. With only three countries in West and Central Africa being on track to facilitate universal electricity by 2030, the impact on persisting poverty and development is daunting, according to The World Bank.
Without electricity, children can’t do their homework past sunset, economic activity is little to none and opportunities for improving human capital are once again not realized. The solution to tackling Africa’s region’s energy access crisis lies beyond the border of the West and Central African countries. Linking fragmented energy systems and investing in abundant, affordable and clean energy seems to be the way forward for universal electrification across sub-Saharan Africa, according to The World Bank.
In fact, an IEA study predicts a more hopeful future in which Africa could and should achieve universal energy access by 2030 through a yearly investment of $35 billion. Within that capacity, the study states that 90% of total energy would come from renewable energy, including solar, hydroelectric and geothermal.
Karm Solar: A Success Story
The company Karm Solar pioneered in breaking through the market for solar energy in Africa. The founders Xavier Auclair, Randy Fahmy, Yumna Mdi and Ahmed Zahran developed a strategy based on the motive to help farmers in the remote Bahariya Oasis. With Bahariya Oasis being unconnected to the central grid, the solution constitutes building 33 wells for the farmland with which the farmers could power their water pumps using solar energy instead of diesel generators.
From 2015 onwards the company was quickly expanding allowing them to target other off-grid regions via a finance model under which infrastructure was repaid by clients within a 25-30-year window and as part of their tariff. A few months later, the company gained an independent power producer license, allowing for the sale of electricity from an off-grid solar station, as well as an expansion of its business model to include water desalination, construction management and architecture.
Distributed Energy System
GridX Africa, a solar power company launched in 2016, has also capitalized on remote solar facilities to provide power to construction projects, farms and safari lodges in Kenya, Mozambique and Tanzania. Its business model does not only provide power in a sustainable way but also offers a solution to power outages. In January 2022, Kenya experienced a nationwide outage, putting businesses, hospitals and essential services out of business for 24 hours. With GridX, solar systems are distributed and detached from the grid, allowing them to continue to provide power during the outage.
As headlines worldwide focus on the emerging energy problems of the west, one cannot forget about the millions of people in Africa that still do not have access to basic energy services. The solution to solving this true and present energy crisis lies in continued investment from developed regions, continued political cooperation and a unified energy grid that draws on affordable and clean energy.
Start-up companies like Karm Solar and GridX Africa have shown the path ahead now it is down to global leaders to catalyze new investments and unlock commercial potential.