Africa PV market to grow by 10% up to 2023

The African photovoltaic (PV) solar market is expected to grow by 10% over the next 8 years as a result of high prices in electricity and governments' increased initiative towards these power solutions according to a report published by Delaware, U.S.-based Global Market Insights, a global market research and consulting service firm. Growth of solar market would mean that solar will continue to play a major role - in fact a leading role so far - in renewable energy markets. It is also good news to investors in the sector, although according to the experts, more remains to be done in order to harness the full potential of solar energy. These include dealing with the much prevailing ignorance about solar being a viable powering option for communities, and leveraging better and innovative financing strategies.

At the same time, the wind market size is likely to exceed USD 130 billion by 2023, with European market leading the way due to increasing government policies favoring the investments.

Independent power producer programs contribute in growth

More particularly, establishment of the Renewable Energy Independent Power Producer Programs (REIPPPs) by various African governments is likely to help propel growth of solar markets in this continent. Huge growth avenues are also likely to be created due to the proliferating advancements outside of these procurement programs. The highest growth rate will be realized in the southern and eastern Africa according to the report. Solar will also likely become the more preferred source of energy as prices of retail electricity sore in the coming years.

Last year, the market witnessed additional installations of grid connected photovoltaic systems accounting for more than 300 MW in the utility scale sector in the sampled 40 countries around the world, and these types of investments ( grid connected photovoltaic systems) are likely to continue leading in PV investments according to the report. The commercial sector type of installations accounted for over 240 MW while residential sector installations were made up of around 200 MW.

Although there has been an increased number of microgrid installations over years, Africa is likely to witness growth in large scale photovoltaic power stations as well. The demand for more solar photovoltaic power will be driven by increased demand for electricity, says the report, but also to play a role will be increased awareness of environmental sustainability, coupled by benefits that come from increasing the catch for renewable energy sources. Growth in demand will also be propelled by increased output efficiency of PV systems as a result of technological improvements, their low cost or economical installation, and the fact that people can afford to maintain the PV systems (low maintenance cost).

Although previously not that popular among many policy makers as an alternative power supply method to masses, a number of improvements have been witnessed, and now Africa is witnessing an increased interest in sustainable energy generation methods in the recent years, so says the report. Some of the policy changes include those that favor awarding of more licenses to private entities to generate solar power distributed to the public by utility firms, something not popular here before.

Increased demand for power and solar efficiency

PV solar systems are now associated with better cost optimization and this will increase their likability among masses. In addition, Africa's growth in the coming years is likely to record gains in job creation and stimulate local economies, which will propel demand coupled by rising population. The region will experience low cost energy generation as a result of increased installation of these systems. Growth of the industry from 2016 to 2020 will also be pushed up by increased load shedding frequency and threats of blackout, says the new report. For instance, South Africa, which only recently was putting up many solar plants to curb load shedding, is expected to achieve a significant gain following commissioning of many plants in 2013, says the report. An example of these plants include the Jasper Project of 96 MW which powers 30,000 homes.

Strategic placement

A big positive are that most of the regions have a favorable equatorial location. Solar systems in these regions can work optimally due to advantages of insolation. Most of South Africa, for instance, receive 2,500 hours of sunlight all around the year and thus the country will be an ideal case when it comes to solar technology installations and implementation. Installation of solar systems is also somewhat an advantage for many businesses since it is associated with internal rate of return (IRR) realized once the initial payback or investment period is complete, says the report.

Ignorance and poor financing to affect growth negatively

However, ignorance of the technology among people in the region will still eat away some of the growth that would have occurred according to the study. Change of mind-set among people with regard to solar being a viable alternative source of power is still going slow which affects generation of power from solar despite the fact that the region has enjoyed "many years of readily available thermal power."

Further growth could be realized if guidance on the initial outlay for purchasing solar PV is provided according to the report. For instance, there are successful cases where solar plants have been completed under public-private joint ventures -- one of those is the RustMo1 Solar Farm that has a production capacity of 7 MWs and that has already been hooked to the national grid and is supplying power for Eskom, the South Africa's public utility.

The market is still witnessing entry of more players. An example is REC, a Norwegian company that has planned installation of 100 GW of solar PV installed capacity in East and South Africa by 2030.