The first of a 652kW solar project in the Maldives was launched this week. Through a power-purchasing agreement signed by State Electric Company (STELCO) with Renewable Energy Maldives (REM), 61kW panels on the island of Villingili were switched on by Germany’s parliamentary state secretary at the federal ministry for the environment, nature conservation and nuclear safety, Katherina Reiche. German solar firm, Wirsol, provided technology and financing.
In Villingili, panels will be installed at six sites in total: 74kW at Eduruvehi, 28kW on Cinamale, 40kW on the Judicial Building, 58kW on the Maldives National Defence Force (MNDF) flats and 33kW on the powerhouse.
Signed in June 2011, the panels to be rolled out include 294kW in Villingilli, 64kW in Guraidhoo, 78kW in Himmafushi, 120kW in Maafushi, 48kW in Kaashidhoo and 48kW in Thulusdhoo.
REM had initially proposed a system to provide 70% of daytime power across six islands on the back of the government’s proposed feed-in tariff, but STELCO reduced the installation to 30% with the intention of later expanding it.
Head of REM, Dr Ibrahim Nashid, said the success of the project was an important step that would instil confidence among others in the power sector to invest in renewable energy. “When we tested the [Muhyiddin] system we found the panels were generating 10% more than we had initially calculated,” he said. “It is a good indication of the potential for solar in the Maldives.”
Power from the solar panels will be sold – and fixed – at US$0.25 per kWh, compared to the current cost of around US$0.35 cents per kWh.
Founder of Wirsol, Stefan Riel, said the six-island 652kW installation would avoid the equivalent of 800 tons of carbon entering the atmosphere every year. “In the next 12 months, we want to put 20MW into the grid across several islands, which would mean 25,000 tons of carbon reductions,” he said.
“We are using German technology and experience to create jobs in the Maldives and give young people here the opportunity to be involved in their energy production. For that to happen we need the continued support of the Maldives government and the German Development Bank.”
While the final details of the feed-in tariff are being confirmed, the Wirsol system will operate under a special arrangement.
Research conducted last year suggested that electricity costs could be reduced to US$0.17 or even lower on some islands through the use of solar. Many existing diesel generators on the islands are extremely expensive to run as they have a capacity far above the demand of their islands, with electricity costing up to US$0.77kWh in some areas. Solar was, claimed the President’s Energy Advisor Mike Mason, “an opportunity to print money – and there aren’t many of those available to the government.”
But the key challenges remain economic and regulatory, alongside lack of financing options, according to REM’s Director Hudha Ahmed, “We have been making 20-25 year contracts on good will. We need to make sure investments are secure and that regulations are in place. Contracts also have to be signed by the councils as well as the utility providers, as the councils have the responsibility for providing electricity.”
Ahmed continued, “It has been a huge challenge – no bank would finance this project. We approached every bank in the Maldives but none would invest.”
Very few people in the Maldives would have US$5,000 to invest in a typical rooftop solar system, Ahmed explained, even if such a system were to cut the average electricity bill in half and pay for itself in 5-6 years. While elaborate financing mechanisms exist to fund the capital city’s enormous motorcycle fleet, with costs not dissimilar to a solar PV system, no such small loans system exists for solar.