500,000 households to be solar powered in Peru

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500,000 households are to be provided with solar panels via Peru’s National Photovoltaic Household Electrification Program (NPHEP), which aims to provide 95% of Peru with energy, by 2016.

The minister of energy and mines (MEM), Jorge Merino Tafur, announced the start of the NPHEP in the village Cilacot, ten minutes from the town of Contai, Cajamarca region, this Sunday.

The initial part of the first phase of the five-year NPHEP project started with 1601 solar panels, which will power 126 impverished communities in the districts of Cupisnique, San Benito, Tantarica , Chilete, Yonan, San Luis and Contai.

Nearly half of Peru’s population live in poverty, with 19% under the extreme poverty level. Only 66% of the population have access to electricity, leaving 1.6 million households with no electricity access.

Rural villages in Peru currently use candles, kerosene torches and traditional stoves for everyday living and cost rural households nearly US$8 a month, or US$77 a year.

Merino Tafur said the panels meant families would have electricity in their homes for the first time, which will greatly impact their daily lives as electricity access allows children more time to study, and parents more light hours to develop their produce at home.

“This programme is aimed at the poorest people, those who lack access to electric lighting and still use oil lamps: spending their own resources to pay for fuels that harm their health,” Merino Tafur said.

The NPHEP’s overall cost is approximately US$200 million, and hopes to install 12,500 PV Systems over 5 years.

A public competition to select a bidder for the installation of solar panels across Peru will start this week.

The MEM and United Nation’s Development Programme (UNDP) project brief for NPHEP states the project’s main aim as breaking barriers and implementing community engagement for improving lives in Peru, creating a sustainable market for investors and sustainable and cost efficient energy sources for locals, and continued education for future generations.

The project will be supervised by the UNDP, MEM and the Global Environment Facility (GEF), with eligibility under the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC).

The brief states the project “will demonstrate the viability of establishing micro enterprises to sell, maintain and operate PV systems, as well as creating incentives for increased public and private sector investment in photovoltaic-based rural electrification”.

The brief also predicts by the end of the project’s five years, Peru’s PV industry will have grown from the starting out figure of 1000-2000 50W systems per year, to nearly 7000 systems per year.

The project plans to create market opportunities for renewable energies “by improving the access to credit, by facilitating the creation of rural PV service companies, and by creating greater consciousness of the benefits and possibilities of PV electrification”.

The brief also predicts the cost per system will decrease from an initial high of US$713, to about $513 as demand increases, by the end of the project.

Peru was facing possible energy shortages in 2013, according to Jesus Tamayo, head of Osinergmin, the country’s supervisory agency for investments in energy and mining, as reported by Peru This Week.

Peru is the third largest country in South America, with a population over 24 million, with average solar radiation levels which can reach 5 kWh per m2 a day in the Sierra (foothill of The Andes). Peru is also home to the first major PV installation in Latin America.

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