3 Reasons Why Africa Is Going Solar

In many ways, Africa is the final frontier. Although humans originated from Africa, technology is often the last to come to Africa. 

In the West, we take light bulbs, refrigerators, and other appliances for granted. While those products were invented a long time ago, they have yet to make their way to the majority of Africans. According to the International Energy Agency, almost 60% of Africans still do not have access to electricity.  

As Africa modernizes and solar costs trend lower, solar energy is poised to play an integral part in Africa's electrification.

Perfect environment
Because of its proximity to the equator, Africa gets more sunlight than other solar markets such as Germany or China. Greater solar radiation makes solar power more affordable. Africa also has a lot of desert land next to major population centers. That close geographic proximity allows utility-scale power plants to be built without major detriment to farming and power to be transmitted economically.  

No resource curse 
In many parts of Africa, rent seeking and corruption go hand in hand with drilling for oil and natural gas. The diversion of money away from better places for growth is a big reason why many countries with great resource wealth have trouble developing their economies. 

Unlike drilling for oil and natural gas, diverting funds from solar energy projects is much harder. One can count the number of solar panels on rooftops or in utility scale projects as opposed to generally not knowing how much oil has been pumped from an oil field. Because of solar energy's greater transparency, international agencies such as the World Bank and IMF may be more willing to finance solar projects versus other methods.  

Less need for infrastructure
In many places, access to fresh water is the rate limiting step to electricity generation. A great deal of water is needed to generate power from coal, nuclear and natural gas. Getting water from the ocean is not an option because salt water is too corrosive to metals. Because fresh water is scarce, many African communities use their meager water resources for growing crops and for daily living requirements rather than for producing electricity.

Generating electricity from coal, nuclear, and natural gas also requires an adequate power grid to transport power to homes. For many countries, building such grids for rural areas is cost prohibitive.   

Solar panels do not require water or an adequate grid to produce electricity.

The bottom line
Solar power is not perfect for Africa yet. When the sun goes down, solar power runs dry. Battery costs need to come down for solar to be widely adopted in Africa.

That being said, the long-term trend is very good. Africa's population is set to double to around 2 billion people by 2050. 

Most of those people will at some point have access to electricity. Solar economics and lower battery costs will eventually make solar energy very competitive in providing electricity.

First Solar (NASDAQ: FSLR  ) , whose specialty is making affordable utility scale power plants, will benefit. 

Chinese solar companies like JinkoSolar (NYSE: JKS  )  and Canadian Solar (NASDAQ: CSIQ  ) will also do very well since China is Africa's largest trading partner. 

Because of its wealth, South Africa is currently very active in developing its renewable energy resources. It is a leading indicator of a future trend.

Total, the majority owner of SunPower (NASDAQ: SPWR  ) ,  was recently selected to build a 86-megawatt project in South Africa. 

JinkoSolar has already won a large order of 274 megawatts in South Africa. 

First Solar has stated that it will bid on South African projects next year. 

The increase in solar adoption in South Africa should presage broader adoption in other African nations. As Africa electrifies, investors of leading solar companies and Africans themselves will benefit greatly. 

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Read/Post Comments (7) | Recommend This Article (8)

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  • Report this Comment On December 31, 2013, at 10:00 AM, yahoo123 wrote:

    Go SunPower Go :)

  • Report this Comment On December 31, 2013, at 12:17 PM, luckyagain wrote:

    Almost all of the telephones in Africa are cell phones because it requires the least infrastructure. Solar electric has the same advantage. Also Africa will benefit from the increasing efficiency in electric appliances. In the US due to increasing efficiency, actual power consumption has been dropping for the last few years. My guess is that it will take much fewer kw to have a decent life style in Africa than in places in the US.

  • Report this Comment On December 31, 2013, at 2:03 PM, bugmenot wrote:

    The cost per watt to maintain a solar power plant is higher than the cost to burn gas for electricity. Yes, the maintenance cost makes solar a problem! and inferior to fossil plants!

  • Report this Comment On December 31, 2013, at 2:46 PM, DannyBoy13 wrote:

    you mean to tell me that African solar production will be free of the corruption that plagues the fossil fuel industry?

    Are you sure about that?

  • Report this Comment On December 31, 2013, at 5:04 PM, popeye1250 wrote:

    "Birthplace of humanity?"

    So I guess "they've" written off India and China then?

  • Report this Comment On January 01, 2014, at 9:05 AM, greggdavis wrote:

    Why not discuss the real reason for not having a copper infrastructure in Africa? People steal copper! All over Africa, this has been a problem and has plagued the communication industry. So the real reason that wireless took off was that it worked without people stealing copper lines. Solar will take off in Africa but it's going to be rooftop panels and not major solar farms. Rooftop solar hot water heaters have been popping up all over South Africa. The political corruption, especially in South Africa where the ANC owns a large chunk of Eskom, will undoubtedly filter into the solar industry.

  • Report this Comment On January 01, 2014, at 9:53 PM, vet212 wrote:

    It matters not whether or not Africa goes solar as it is also going down the pipe into the septic tank of history descending back into the morass of tribalism and the disease and war that brings

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