Decreasing prices for solar PV and the high irradiation on the African continent demonstrate suggest that solar PV should play a significant part of building a renewable energy supply that reaches all Africans – nearly 50% of whom still lack basic access to electricity. This report examines recent developments including important innovations in tariffs, increased use of independent power producers (IPPs) and improved legislations to stimulate renewable energy, decentralized off-grid solutions such as mini-grids and solar home systems.
Factors such as structural, technical and financial barriers including the presence of fossil-fuel subsidies, the weak financial strength of utilities, outdated and unstable grids and an unstable policy environment, all of which translate into a high level of risks for investors. The report argues these barriers are even more relevant for investments in solar PV installations as these are characterized by higher upfront costs than fossil fuel power plants. It explores specific market conditions such as subsidized electricity prices, unstable grids, fast developing suburban areas, off-grid markets including distributed storage solutions and assesses their impact on the nascent solar PV market. It provides insights by way of deep dives into key markets including Angola, Algeria, Ghana, Ethiopia, Egypt, South Africa and Namibia.