How do you make millions from the sun in Africa? You can replace kerosene lamps in Tanzania or build a solar farm, the size of a small island, in Ghana. Everyone is talking about it and many want to invest. It involves importing millions of solar panels, installing them in barren deserts, then cashing in. Sounds easy, but it isn’t. Watch out for sand dunes, fast-growing vegetation and hungry animals.
You would think that a company that can build a solar panel designed to withstand hail stones shot from a cannon would be able to weather anything nature can throw at it. Think again.
Problems come in thick, fast and furry, according to Matthew Merfet, Africa and the Middle East’s project director at First Solar, a company that operates more than 20 utility-scale photovoltaic (PV) plants producing 1.7 gigawatts of energy worldwide.
“On one farm, we noticed a number of panels kept shutting off. We thought it was a cable problem, and we didn’t know why. It took us months to figure out that racoons had moved in and were chewing the cables,” says Merfet.
Fending off rodents on a 4,000 hectare plot is just one of the many unexpected headaches for solar energy farmers. Merfet says First Solar discovered dandelions and trees that grew so high they blocked the sunlight. In deserts, sand dunes piled up.
Finding these problems is harder than you think. Merfet’s company has to fly a toy plane with an infrared camera across fields of panels to check for dark spots.
“It’s easy to get lost out there, finding your way in acres of land is impossible, so we have GPSs,” he says.
Even when everything is working, solar energy can present problems. Merfet says solar energy is unique in that it has a predictable timeframe; you have roughly 10 hours to maximize a sunny day. The key is to heat your panels quickly, and keep them in the sunlight for as long as possible.
As the sunlight is converted to money, companies like First Solar have come up with black panelled solar units designed to follow the sun like a field of sunflowers.
It also means that if one panel breaks, only that panel will miss out on the light. Compare this to a conventional solar farm that moves panels in rows; if a motor malfunctions, the entire row will fail to soak up the rays. Even with hungry creatures and growing trees, First Solar believes this sunflower system can increase output by 25% a day.
In September, South Africa bedded down its first private PV plant in Kimberly, three months ahead of schedule. The 75-megawatt (MW) solar farm houses 312,000-panels. The country’s Renewable Energy Independent Power Producer Procurement Programme has allocated $2.8 billion for renewable energy, of which 8,400MW are for solar PV. Currently, South Africa needs 41,346MW of new power over the next 17 years. The country also needs to upgrade its grid infrastructure, which is so out of date it might not be able to support all the required renewable energy.
Ghana has also stepped forward. Once their giant 450 acre, 155MW solar plant near Aiwaiso is completed in 2015, it will be the biggest solar plant in Africa, boosting electricity capacity by 6%. Costing $400 million, the project will have the capability to generate sufficient energy for 100,000 homes.
This dwarfs Africa’s former largest grid-linked solar plant, Kigali Solaire, in Rwanda. The small 250-kilowatt plant helped the county during a two-year drought, which strained its hydroelectricity plant.
Investing in Africa has only been possible after prices of PV modules dropped by 80% since 2008, according to CleanTechnica. As prices reduce, more technology arrives in Africa.
Then there are days when the sun doesn’t shine, according to South African analyst Chris Yelland of EE Publishers.
“Solar energy can produce more power than wind during the day … we generally have a sunny climate in South Africa. One of the biggest disadvantages of solar power is that the price is not coming down. There is also no storage in solar PV, which restricts power during the night. So you need batteries to store energy and they are expensive, which makes it uninteresting for investors,” says Yelland.
But, soon night won’t be a problem. Abengoa Solar, responsible for building the world’s largest solar plant, is now planning to build the largest parabolic trough solar plant in the world, in Arizona, in the United States. Solana will be the first solar plant in the United States with thermal energy storage. This plant, which will cost $2 billion, will be capable of producing energy night and day.
One of the investors taking the plunge is Adam Camenzuli. For Camenzuli solar energy is a common topic around the dinner table, but his best idea came in the stalls of a McDonald’s in Toronto, Canada.
“We were just hanging out and talking. We saw that the North American and European economies were not going to be the drivers of tomorrow’s growth. With our ties to Africa, we always talked about the next thing for the continent’s growth,” he says.
“We realized that bringing in solar lamps was not a viable business in the long-term—we had to do something different. We had to be innovative and combine the effectiveness of pay-as-you-go, which revolutionized mobile telecommunications, with the benefits of solar technology.
The current market penetration for solar energy is around 15 million people, but there are 600 million people who use kerosene. A family in Tanzania can spend 10 to 25% of their income on kerosene alone. There is a large quantity of low quality solar lanterns coming into the market [Tanzania] … But the upfront cost of a solar lantern is $20 dollars. The average person can’t afford that. Kerosene lanterns are the best alternative,” says Camenzuli.
Clad in a neat black suit and blue shirt, the Canadian-born Camenzuli is in the heart of Sandton, South Africa,.He has traveled from China to Brazil, on the hunt for investors that will back his idea.
In 2011, shortly after moving to Tanzania, his idea shone like a bulb in the dark.
“The ‘aha’ moment was when we realized we had to separate the components of the lamp and introduce a pay-as-you-go model through swapping the battery/light portion of the lamp,” he says.
Camenzuli was even able to throw in a cell phone charger, which has made the lantern even more popular. He sold it to small shops that sell cigarettes, soap and daily doses of kerosene in Tanzania. They call these shops Dukas, and for Camenzuli they are his first step to solar millions.
“By selling through Dukas, you can rent the battery, and swop out a used battery. The Dukas then charge the batteries on their roofs. People pay $20 over the course of a month to rent it, around 66 cents a day. Its money they spend on kerosene, so there is no additional cost to the user. At the end of the 30 days they have paid for the lamp and get to keep the solar panel. In effect, it’s a fully working lantern at 66 cents a day. The individual Duka keeps all the spare batteries. They pay a small charge for the battery and solar panel batteries can last for two years. The beauty is that you can replace individual pieces if it breaks,” says Camenzuli.
It took only six months to turn his dream into reality. Big or small, Africa is the ideal landscape for solar energy. Early bird entrepreneurs are snapping up the worms, but they must watch out for hungry animals.
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