‘No need for financial incentives’ to spur Africa’s solar market, says developer

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
The focus should be on innovative financing mechanisms, and not ancillary incentives, according to SolarAfrica. Source: Flickr/AMISOM Public Information

Africa’s solar market will accelerate just fine, independent of any financial incentives, a market developer has said.

“There’s no need for financial incentives really to get the market to go,” James Irons, CEO of SolarAfrica, a solar solutions provider in Africa’s residential and commercial & industrial (C&I) solar sectors, told PV Tech. 

“In my view it is very much about getting to grips with how these projects are financed,” he added.

More developed markets such as those found in Europe or the US have benefited significantly from financial incentives such as feed-in tariffs, investment tax credits and net metering regimes. The lack of such incentives in Africa’s solar market has historically caused market entrants to doubt the financial viability of implementing projects in the region. But according to Irons, such incentives are only ancillary, and the falling cost of solar is an incentive in itself.

“The reason we are in the [African] market is that there is huge potential for this type of technology or business model, given the fact that energy is an issue for a lot of these countries and with the huge drop in technology costs, we are competing with grid power or the price of power in all these countries,” he explained.

“[African solar] makes sense from a financial perspective otherwise nothing would happen. If there's no savings incentive for the end user or the actual offtaker then nothing would happen.”

That being said, in many African countries, savings achieved with solar – particularly in the C&I space – are not significant enough to attract consumers to make the switch from conventional power. Coupled with this is a lack of understanding of the technology.

“Anyone coming from Europe needs to understand that energy in Africa is done on a very different basis,” said Irons. “So it's very different to your feed-in tariffs or your local operator or utility who would buy most of your production. Projects in Africa will likely never really have a net metering style product. You need to be able to design your systems on the basis it can work with generators, it can work within the plants load requirements.  I think a lot of foreign or European contractors sometimes miss that.”

For more information on African solar finance, visit the event website of Solar Media's Clean Energy West Africa Summit, to be held in Accra, Ghana, 4-5 April. 

Read Next

December 9, 2021
US residential solar installer SunPower has launched a new financial services product aimed at making domestic renewables more affordable.
December 9, 2021
Investment firm KKR has launched a new utility-scale solar and energy storage development platform, dubbed Stellar Renewable Power.
December 7, 2021
Solar developer ib vogt has signed a €40 million (US$45 million) syndicated loan agreement with its long-standing German bank partner Commerzbank AG to support its international growth strategy
December 6, 2021
Saudi solar developer ACWA Power has signed a memorandum of understanding (MoU) with Natixis Corporate & Investment Banking (Natixis CIB) that will see the partners explore opportunities to develop projects, including renewable energy plants.
December 3, 2021
Solar investor and asset manager NextEnergy Capital Group (NEC) has secured backing from the UK Infrastructure Bank for a new fund that aims to raise £500 million (US$663 million) to invest in subsidy-free solar power plants in the UK.
December 1, 2021
Major US bank Wells Fargo has closed its maiden tax equity investment into a colocated solar-storage project currently under construction in New Mexico, US.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
December 21, 2021
Free Webinar
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal

PV TECH POWER VOLUME 29 OUT NOW—Get 35% off your first year

Solar’s 2030 blueprint