Rensource Energy

We are excited to welcome renewable energy developer, Rensource Energy as the latest development partner of our innovative financing platform, Spark Energy Services, and the first based in West Africa.

Lagos-based Rensource specialises in the development and financing of hybrid energy solutions in Nigeria’s commercial and industrial (C&I) sector, where businesses typically rely on expensive and polluting diesel gensets to complement an unreliable grid supply.

The company started out in 2016, initially supplying solar home systems before devising a rooftop solar-hybrid mini-grid model to bring reliable power to Nigeria’s large urban markets. Building on its extensive experience, Rensource pivoted to focusing on the C&I sector in 2020 and has never looked back. The company’s biggest project to date is the installation of a 700kWp solar-powered PV plant at a poultry farm near Abuja, which remains one of the largest power purchase agreements for solar energy signed in Nigeria’s C&I sector.

Rensource’s services range from EPC to asset management, with the company employing a pricing mechanism that enables end-users to achieve 20–30% cost savings on their electricity bills. Through the partnership with Spark, Rensource will be able to expand its portfolio of projects financed under the PPA model.

Camco’s Adam Fitzwilliam, who heads up Spark, said: “Rensource’s mission to accelerate the clean energy transition in West Africa and support green growth is very closely aligned with our own. The opportunities in Nigeria are significant, with much of C&I demand currently being met through diesel generators, providing opportunities for deployment of clean energy to reduce costs, increase reliability and improve health outcomes locally.

“When the company approached us looking for additional funding to expand the business, we recognised the team’s experience and potential to deliver on its ambitious mission, and we are of course delighted to now be able to partner with Rensource as the latest of Spark’s development partners.”

Prince Ojeabulu, CEO of Rensource, stated: “We are glad to partner with Spark in the bid to accelerate the productivity growth of C&I (Commercial and Industrial) businesses in Africa through our clean, reliable, and affordable solar energy solutions. Our partnership with Spark also strengthens our commitment to provide a sustainable future for Africa”.

Rensource becomes Spark’s eighth fully accredited development partner, with four of the others based in Kenya, two in South Africa and one in Uganda.

•             Find out more about Rensource at https://atomic-temporary-210838268.wpcomstaging.com/

•             Find out more about Spark at https://camco.fm/spark

Reference: Spark sets sights on West Africa expansion with new partnership

Lagos, Nigeria. July 13, 2023 – Rensource Energy, Africa’s fastest-growing solar power provider of renewable energy services, announces the closing of a $15 Million facility with Afrigreen Debt Impact Fund SLP (”Afrigreen”). The debt finance provided by Afrigreen will be a mix of US dollars and Naira financing to fund the construction of over 30MW of Rensource C&I portfolio in the next 3 years.

Since inception, Rensource has developed and constructed a combination of about 10MWp of solar PV and 3MWh of storage capacity. Currently, Rensource has a C&I portfolio of over 17MW under construction and 120 MW in its pipeline; cutting across East & West Africa. Its customers range from the agriculture, healthcare, education, real estate, and manufacturing sectors in Africa. With the fundraising, the Lagos-based C&I solar company will be able to provide more affordable, reliable, and clean solar solutions to commercial and industrial clients in key markets across Africa, significantly reducing carbon footprints.

In a comment by Rensource’s CEO, Prince Ojeabulu. He stated: “Rensource since its inception has waxed strong which no doubt can be attributed to its strategic partnerships, Afrigreen being one of them. We are glad to have closed a $15 million fundraise with Afrigreen which will contribute greatly to the development of the commercial and industrial sector in Africa and enable us to achieve our goal of a total installed capacity of 160MWp by 2027.”

Alexandre Gilles, Managing Partner of Echosys Invest stated: “We are thrilled to close this transaction with Rensource. It marks Afrigreen’s first investment since the closing of the fund. It is also the first step of a promising collaboration between the two companies, as Afrigreen will be able to accompany Rensource’s pipeline development in a buoyant C&I market in Nigeria. Africa’s commercial and industrial companies are massively turning to solar PV to reduce their dependency on diesel generators, reducing energy bills, fuel consumption, and CO2 emissions. Companies such as Rensource are promoting C&I projects and Afrigreen will support them with debt financing.”

About Rensource:

Rensource is a leading C&I solar power provider in Africa. Rensource currently designs, funds, and delivers solar solutions to diverse C&I clients across Africa. The company’s solutions offer affordable and reliable clean energy to clients, making it a superior choice for MSMEs looking to reduce their cost of electricity.

Rensource is backed by leading investors, including Persistent Energy, Omidyar Network, EDP Holding,
Proparco, Inspired Evolution, Amaya capital, Investisseurs & Partenaires

About Afrigreen:

Afrigreen is an infrastructure senior debt fund that offers financing solutions to commercial & industrial (C&I) consumers in Africa, enabling their installation of on-and off-grid solar power plants in order to help reduce their energy bill as well as their diesel dependency.

Afrigreen is a French limited partnership funded by the European Investment Bank (EIB), the World Bank Group’s International Finance Corporation, the Belgian Investment Company for Developing Countries (BIO), Proparco (Groupe Agence française de développement), Société Générale and BNP Paribas.

Afrigreen was set up by a team of experts with strong industry expertise. Afrigreen is jointly managed by Rgreen Invest (a French regulated Investment Manager) and Echosys Invest (a joint subsidiary of Rgreen Invest and Echosys Advisory).

Afrigreen applies IFC Performance Standards and EIB Environmental & Social Standards. The Fund follows an environmental and social management system under which all projects are audited to assess positive and negative impacts in terms of environmental and social aspects.

Afrigreen pays specific attention to the risk of forced labour being used in the production of solar photovoltaic panels and their components. It condemns the use of such forced labour for the production of solar photovoltaic panels or their components.

Reference: Rensource Announces a $15 Million deal with Afrigreen Debt Impact Fund SLP

By Paulo Silva Vieira

Africa, specifically Nigeria, presents a significant opportunity for distributed generation (DG) solar projects to address the energy needs of the continent. With over 90 million people lacking access to reliable electricity, DG solar projects offer a cost-effective and reliable option to bridge this gap. However, for DG solar projects to be successful in Nigeria, a variety of factors must be considered, including strategy, IT tools, financing capacity, regulations, and policies.

The adoption of DG Solar in Africa will require the collaboration of governments, businesses, and international organizations to create the necessary infrastructure and support systems. Africa has seen significant growth in installed solar capacity in recent years, with Nigeria’s installed solar capacity increasing from approximately 350 MW in 2016 to over 1.2 GW in 2020, representing a compound annual growth rate of over 30% per year. With Nigeria’s population expected to reach over 276 million by 2030, the country needs to anticipate and plan for the growing demand for electricity over the next 10 years. Rensource Energy is addressing this demand by delivering financially and technically advanced solar solutions for commercial and industries. 

When considering a DG solar project in Africa, a clear and well-developed strategy is crucial to define the company’s vision and goals, identify target markets, develop a competitive advantage, allocate resources effectively, and manage risks. Engaging with the local community is also important to ensure the project benefits the local community and creates a positive impact.

Rensource’s strategy is focused on the Nigeria energy transition plan to achieve carbon neutrality by 2060, and aims to achieve this by providing decentralized solar for Commercial and Industrial businesses as this market presents itself with enormous potential. We design our internal workflows with a view to continuously improve and make changes where necessary, ensuring a great level of viability, which in turn helps us deliver the best services to our customers. As such, we are a team that daily seeks to innovate and be efficient to ensure the actualization of this transition plan. Rensource engages with the local community by empowering them to use and own solar, as well as fostering more women to become engineers, thereby bridging the energy gap in Nigeria.

Rensource Energy has successfully used IT tools and data to improve the efficiency of operations, enable better communication and collaboration among employees, improve customers experience, thereby providing a relevant advantage compared to other competitors. IT can also provide tools for collecting, storing, and analyzing data about a solar company’s operations, automating various processes within a solar company, and providing platforms for employees to collaborate and communicate with each other, facilitating continuous improvement.

What sets Rensource apart from its competition is how we use IT tools and data such as:1) Data and analytics: we use tools to collect, store, and analyze data which helps us identify trends, patterns, and areas for improvement, as well as make informed decisions about how to optimize our operations;
2) Automation: we automate various processes, such as site evaluation, sales, customer service, and operation and maintenance (“O&M”). This improves efficiency, reduces errors, and frees up time for our employees to focus on more important tasks;
3) Collaboration: we provide platforms for employees to collaborate and communicate, which facilitates continuous improvement, employee efficiency, innovation, and increased success.

In conclusion, IT maturity provides tools and platforms that enable solar companies like Rensource Energy to better understand their operations, identify areas for improvement, and implement changes to ensure the best time-to-market and effectiveness. As Africa continues to address its energy needs, DG solar projects will play a significant role in building a more sustainable and resilient energy system.

Rensource Energy, a leading African solar power developer for the commercial and industrial sector (C&I), today announced the signing of an additional 1.4 MW worth of projects in Nigeria to be constructed in early 2023. These projects will bring Rensource’s project portfolio to 14.6 MW under construction and 70 MW in the pipeline.

The new projects range in size from 300 kWp to 700 kWp, include storage capacity, and reflect a strong demand for sustainable, affordable, and reliable power in Nigeria going into 2023. Rensource’s ability to deliver innovative systems tailored to customer needs is reflected in the diversity of clients these installations will serve, ranging from pharmaceuticals to hospitality and agriculture.

As interest rates continue to rise in Nigeria, fuel costs soar, and electricity access slowly expands, the C&I sector will continue to seek affordable state-of-the-art power solutions to meet their needs. Rensource is the service provider of choice across Nigeria’s key growth sectors, given its superior ability to design, fund, and execute solar projects of all sizes.

Prince Ojeabulu, CEO of Rensource, commented, “2023 will be a big year for Rensource, and we are thrilled to start the year strongly with 1.4 MW worth of new projects signed. Moreover, our team has proven that it can adapt to the needs of any customer, be it a large pharmaceutical processing facility or a popular tourist hotel. We look forward to working with our industry-leading construction partners to execute these projects in record time.”

About Rensource

Rensource is a leading C&I solar power provider in Africa with 5MWp of solar capacity and 2.1MWh of storage capacity delivered to date and another 14.6 MW of projects under construction, and more than 70 MW in the pipeline. Rensource currently designs, funds, and delivers solar solutions to diverse C&I clients in the manufacturing, agriculture, education, and real estate sectors. The company’s solutions offer affordable and reliable clean energy to clients, making it a superior choice for MSMEs looking to reduce their cost of electricity.

Rensource is backed by leading investors, including Persistent Energy, Omidyar Network, EDP Holding,
Proparco, Inspired Evolution, Amaya capital, Investisseurs & Partenaires

Reference: Rensource Energy Announces 1.4 MW of New Projects in Nigeria

By Prince Ojeabulu

High inflation and slowing GDP growth rates are combining for a dreary economic forecast for several African countries going into 2023. For this reason and more, business costs and de-risking operations are top of mind for investors, business owners, and governments heading into Q4. While investors and policymakers may feel inclined to take their foot off the gas of large-scale infrastructure investments, renewable energy investments, especially in the solar sector, should not be a casualty of a potential recession. Instead, increased energy prices should directly correlate to the increased attractiveness of solar and other renewable energy sources, as the International Energy Agency recommends.

Policymakers and investors should put added focus on the energy transition for three main reasons: 1. this transition has been well underway even through a pandemic with investment attractiveness only improving, 2. renewable energy systems can help businesses persevere during a downturn and 3. Commercial and industrial solar, in particular, is key to African businesses hitting their climate targets.

1. The energy transition is well underway in Africa

By any metric, the renewable energy transition is well underway in Africa. Renewable energy capacity in Africa doubled between 2006 and 2017, with nearly $18 billion invested over the same period. Africa is the largest destination for off-grid solar investment in the world, and hundreds of millions of dollars are pouring into the sector. In fact, annual investments in renewable energy grew tenfold from less than $500 million in the 2000-2009 period to $5 billion in 2010-2020. There is still room to grow: the African continent has the highest solar energy potential in the world but has only installed 5 gigawatts (GW) of solar PV, which represents less than 1% of the global total.

If the renewable energy sector is to continue to grow throughout Africa, governments must embrace renewable energy and provide an environment of clear regulation and governance conducive to large-scale private investment. Africa’s off-grid solar sector alone represents a $24 billion per year opportunity, and the high costs of fossil fuels caused by the Russian-Ukrainian war mean alternative energy sources are more in demand than ever.

2. Renewable energy systems are key to business resilience

The fundamental benefit of renewable energy to African businesses is the power reliability and cost predictability. These are constant concerns for any business owner, particularly large-scale consumers in the commercial and industrial space. Energy costs make up a significant portion of business expenses in Africa, with businesses paying 25% to 100% more for electricity from the grid than similar companies in other regions. One study found that 25% of Ghanaian and Nigerian businesses suffered double-digit losses in sales due to power outages, with some firms losing 31%. Add to this uncertainty the global uptick in energy prices caused partly by the Ukrainian War, and there is little promise for dependable diesel and gas prices in the next few quarters.

Solar installations, on the other hand, can offer predictable expenses and reliable energy: stand-alone solar mini-grids have installed costs in Africa as low as $1.90 per watt for systems larger than 200 kilowatts. Combine this with a battery storage solution, and business can be relatively disconnected from the ups and downs of global energy markets.

3. Commercial and industrial solar is key to African businesses hitting their climate targets

Nowhere is the benefit of solar for businesses more apparent than in the commercial and industrial sectors. These large power off-takers, be them manufacturing plants, data centers, or large-scale farms, have a consistent and high energy use that can come at a high cost. In addition to needing cheaper power rates, no commercial or industrial business can afford for their plant or site to lose power for any amount of time. Imagine a food processing plant that loses power and refrigeration, causing the spoilage of goods. Or a data center that loses power and goes offline taking thousands of internet-based services offline with it including mobile banking.

On top of these businesses benefits are ones of critical importance to our modern economy: carbon avoidance. Whether forced to be regulated, or voluntarily undertaken for ESG principles, businesses can reach emission reduction targets by deploying solar installations on their sites. Companies do not have to wait for their grid power to become green – they can start drawing power from solar and batteries on their own terms through solar installations, instantly reducing their carbon emissions.

Reference: 3 Reasons Why African Solar Investments Should Be Recession-Proof

Rensource, Africa’s fastest-growing solar power developer for the commercial and industrial sectors, today announced the start of construction of a 5 MW solar solution for Baze University’s Abuja campus.

The first phase of the project will come online by Q1 of 2023, and the full installation will generate over 2,000 MWh of clean energy a year.

This clean energy generation will help the university avoid 3,000 metric tons of CO₂ emissions over the project’s lifetime.

Baze University is a distinctive, quality-based educational institution delivering British education standards to Nigerian students by having experienced international staff, superb teaching equipment, overseas external examiners, and first-rate buildings.

Founded in 2011, the Baze campus is 6km from Abuja Central Area and houses six academic departments and 4,000 students.

In addition to the six academic departments, the new solar installation will power the recently commissioned Baze University Teaching Hospital, a 200-bed state-of-the-art hospital for training future doctors and nurses that will provide critically needed health services to Nigerians.

Rensource designed and funded the project and is partnering with leading African EPC contractors for construction.

Rensource’s solar solution will deliver reliable clean energy to Baze University while reducing the university’s electricity costs by nearly 20% and helping the university reach its sustainability goals.

David Ogbonna, the deputy vice chancellor of Baze University, commented: “Rensource was the clear choice for us when we were looking for a partner to develop this significant solar installation on our campus. Baze University identified Rensource as having the engineering and technical ability to deliver this project, and we look forward to being partners with them for years to come.”

Prince Ojeabulu, CEO of Rensource, commented: “We are proud of this massive 5 MW project, demonstrating Rensource’s ability to design, fund, and execute solar projects for C&I clients. Baze University and its students, including at the new world-class teaching hospital, demand reliability to power everyday learning in classrooms, and Rensource’s solar installation will provide that. We look forward to designing and funding similar projects for C&I clients that play crucial roles in Africa’s modern economy and society, like Baze University.”

Reference: Rensource breaks ground on 5 MW solar installation for Baze University in Abuja, Nigeria

Rensource, West Africa’s leading SME focused renewable energy company, in partnership with Stellaris Power Solutions (SPS), has deployed a 300kWp solar PV for 2-Way Steel Works Nigeria Ltd, a steel manufacturing company in Kaduna, Nigeria. The solar PV plant will generate 0.5GWh of energy annually and offset over four-thousand tons of carbon throughout the project’s lifetime, improving air quality and benefiting health outcomes in the country. 2-Way Steel Works Nigeria Ltd has thus set the pace to be one of the largest installed solar PV in the steel manufacturing industry in Nigeria. The project, which commenced operations in March 2022, will have an important footprint in terms of sustainability. It will save up to 360 tons of CO2emissions per year and create 20 jobs during its construction and operations phase.

Since venturing into providing Commercial and Industrial (C&I) Renewable Energy solutions to businesses & industries in 2019 with its flagship project in Premium Poultry Abuja, Rensource Energy has signed PPAs to provide over 5MWp of installed solar PV capacity across Nigeria and projects to construct 12MWp by the end of the year.

According to the Council for Renewable Energy Nigeria (CREN), Nigeria has been affected by insufficient power supply which has largely contributed to the paralyzing of industrial and commercial activities in the country. CREN estimates that power outages brought about a loss of 126 billion naira annually. Aside from the huge income loss, it has also resulted in health difficulty because of the exposure to carbon emissions caused by constant use of generators in different households and businesses, unemployment, and high cost of living leading to the degeneration of living conditions. Generators remain inadequate to satisfy the needs of Nigeria. As such, solar energy becomes a great solution as it is cheaper and reduces carbon emissions, which lessens the effect of climate change.

This project will represent the steel manufacturing industry’s largest renewable energy project. The solar PV is expected to operate for 15 years according to the power purchase agreement (PPA).

Commenting on the deployment, Rensource’s COO Prince Ojeabulu said “We are honored to partner with 2-Way Steel Works Nigeria Ltd to provide a state-of-the-art PV solution that generates cheap and clean energy to power 2-Way Steel Works production activities. This successful completion of the PV plant represents Rensource’s commitment to continue to bridge the energy gap hampering economic growth in Nigeria.”

Mr Clement U. Ejeh the CEO/Chairman of 2 Way Steel was also elated by the project, according to him “For years, as big players in steel construction, requiring high electric power to produce, we have had to grapple with the epileptic supply from grid, resulting in high production cost and loss of revenue. Today, that is history, as we operate at full capacity, towering above production targets, all thanks to God that brought Stellaris Power Solutions & Rensource Energy our way! Our power partners come with the rising sun!”

About Rensource Energy

Rensource is a leading West African provider of renewable energy related services, it specializes in the development and financing of solar-hybrid captive power provision which provides commercial, industrial, and utility customers, solutions that bridge the gap between desired and available power. Rensource deploys any combination of solar power and fossil-fired power, primarily gas and diesel but also including natural gas with appropriate battery storage solutions. Rensource has proven itself with a track record of reliability and consistency in the region.

About 2-Way Steel

2-Way Steel Works Limited is a world class steel manufacturing company into the production of quality fabrication of iron and steel. 2-Way Steel creates the unimaginable with iron to suit clients’ needs, these include silo, palletized, box, container, flat bird, tankers, LPG Bodies amongst others.

About Stellaris Power Solutions

Stellaris Power Solutions is the leading EPC and Engineering Services company with a regional footprint across Africa and the Middle East. Stellaris provides turnkey design, supply, and installation for utility-scale solar tracker projects. As GameChange Solar’s certified, trusted partner and the market’s leading provider of GENIUS TRACKERTM, Stellaris helps its customers meet their renewable energy goals with simple, seamless project execution.

Reference: Rensource deploys Solar Energy System to 2-Way Steel Works Nigeria Ltd

Rensource Energy was incorporated in February 2016 and initially launched into a Power as a Service model focused on the deployment of Solar Home Systems to homes and SMEs. After which, it diversified to include markets. Rensource has since powered different markets including Iponri Market, Ita-Osu, amongst many others.

As time went on, Rensource saw an energy gap in the Commercial and Industrial (C&I) sector and sought to fill it by providing affordable clean energy solutions to the C&I clients. Rensource Energy kicked off its transition from mini grid to C&I with its flagship project, a 700kWp solar farm for Premium Poultry Farms, Abuja in March 2019.

The project saw Premium Poultry Farm enter a power purchase agreement (PPA) with Rensource to deploy a custom solution. An energy audit was first conducted to determine PPF energy requirements, afterwards, and on guarantee of client satisfaction, the construction of the 700kWp solar farm was commenced. The Solar PV farm will generate up to 300MWh of clean energy annually and will save up to 25 000 tons of CO2 in its lifetime and contribute to Abuja’s fight against local air pollution. The project will create over 40 jobs throughout its construction and operational phase.

An enduring moment from former US president Barack Obama’s visit to Kenya in 2015 was a quick chat with the founders of home solar power provider, M-Kopa at the Power Africa Innovation Fair in the United Nations compound in Nairobi. Power Africa was Obama’s signature Africa initiative to help boost electrification across the continent and has had mixed impact depending on who you ask.

But M-Kopa, which was just four years old at the time, has grown rapidly in that time, reflecting the broader progress in the sector as renewable energy solutions are increasingly adopted as viable workarounds to plug the wide gaps in electrification in Kenya and across the continent. Yet, a half decade later, there are fears that looming regulation in the East African country is signaling a possible shift in the government’s outlook on the sector.

Those fears come in light of the latest annual report by Kenya Power, the national electricity company, which showed local demand growth for electricity lagged below the projected level of 5%. Even more crucial is the reason presented as a suspected cause of stunted demand. “Dampened demand growth is further compounded with the increased threats of grid defection by the industrial category as decentralized renewable energy options are becoming more available and cheaper,” the report stated.

Put another way, more industrial customers in Kenya are now being powered by renewable energy sources—a stark reality for Kenya Power given that industrial customers account for 45% of its total revenues.

In the wake of the utility’s report, Kenya’s Energy and Petroleum Regulatory Authority is proposing rules for further regulation of importing, distributing, installing, and maintaining solar systems in the country. And, given the proximity of both events, the proposals have already been described as a protectionist attempt to “thwart” the penetration of solar power and preserve Kenya Power’s dwindling revenues. For its part however, EPRA has denied the suggested ulterior motives.

But while the regulator might indeed be without ulterior motives, the current realities of Kenya Power, and the impact of solar energy providers, offers a snapshot of a looming face-off between nascent renewable energy providers and struggling national utilities across the continent.

Change-over

The obvious reason more industrial users of electricity are increasingly taking up the option of solar power is the cost implication. “On the cost curve, [solar] will get cheaper by 10%-15% every year, which is extraordinary and fundamentally disruptive to electricity,” says Matthew Tilleard, managing partner at CrossBoundary, a solar power provider for businesses which operates in nine African countries.

The switch by industrial players is not only happening in Kenya either. In Nigeria, off-grid energy firm Rensource is building a 700 kilowatt solar power plant for one of the country’s largest private farms. Further, middle-class home owners are also increasingly taking up the option of installing solar systems, as a complement to the national grid’s unstable electricity supply in some cases but as a complete replacement in others.

“We could lose five or ten years worth of fixing electricity on the continent to bad regulation and special interests trying to hold on.”

Companies like M-Kopa and others offering pay-as-you-go solar solutions are also improving access to renewable energy by eliminating large upfront costs of purchase and installation through flexible payment plans based on the ability of consumers to buy what they can afford, rather than wait on an uncertain bills from national utilities.

Increasingly, these services are being delivered by solar powered mini-grids which power dozens or a few hundred households. The rapid growth of these mini-grids has coincided with a reduction in costs—the average price per connection dropped to around $700 last year down from around $1,600 earlier in the decade, according to data from the Africa Minigrid Developers Association.

Capex outlay has more than halved in that time and the cost for new entrants has fallen by a third. The average installed costs is also said to have decreased by 65% to $6,200/kW in 2018 from $14,000/kW in 2015.

As such, taking up solar power over grid supply is a move not only driven by the notorious unreliability of national grids—coming under strain as many African countries’ populations have expanded quickly—but also by the simple fact national utilities cannot match the cost savings solar power providers promise, particularly over the long term. In fact, back in September, Nigeria was on the cusp of a nationwide strike after a nearly 100% increase in electricity tariffs. “It has become a no-brainer to clients to look at solar for power,” says Ademola Adesina, CEO of Rensource.

One way for large, inflexible utility companies to adapt to the changing trends is to seek opportunities for collaboration with private renewable energy providers, Adesina says. “It would be a better use of my time to deploy a 20 megawatt plant to power an entire community or industrial park [through national distribution companies] rather than doing smaller deals,” he tells Quartz Africa.

The potential cost savings solar energy providers promise will become even more crucial in the year ahead as the continent suffers a setback in electrification. Data from the International Energy Agency (IEA) show the number of people living without electricity in Africa is set to increase for the first time in eight years, and fall back to 2016 levels given the economic effects of the Covid-19 pandemic.

With IEA estimating that over 100 million people will be unable to afford basic electricity services across the continent due to dire economic straits, the appeal of cheaper, affordable solar power is likely to continue to rise.

Mind the gap

As governments across Africa contemplate the existential crisis their national electricity companies will face as the shift to solar continues, they will face some stark realities.

With nearly 600 million people without access to electricity, national grids are simply unable to generate and distribute enough power to match growing local demand. In South Africa, Africa’s most advanced economy, episodes of electricity blackouts—or “loadshedding,” as Eskom, the national power utility firm, calls it—have become increasingly normal. The pressures of catering to local demand has seen the job of chief executive at Eskom become a poisoned chalice of sorts over  the years.

In Nigeria, the use of expensively maintained petrol or diesel-powered generators as a key source of electricity has long been a feature of everyday life, despite the high expense of fossil fuels and accompanying costs of air pollution.

Conservative estimates by Access to Energy Institute (A2EI), a German-based non-profit, suggest Nigeria is home to 23 million small gasoline generators which have a capacity that’s eight times larger than the national power grid.

With such vast shortcomings, solar power can be more accurately described as being fundamental to the progress of electrification rather than a threat to a wobbling status quo. Indeed, some African countries have taken that view and are investing billions of dollars in taking advantage.

In 2016, Morocco connected Ouarzazate Solar Power Station, with an installed capacity of 160 megawatts, to its national grid as part of a target to generate 52% of its electricity through renewable energy sources by 2030.’

More recently, Nigeria has toed a slightly different path to deploying solar power as part of its national electrification policy: the government has announced a project that will see up to 25 million Nigerians in underserved and off-grid communities supplied with solar home systems through payment plans that will remove the upfront costs of purchase and installation.

As it turns out, the upsides that come with adopting renewable energy sources go well beyond electrification. Last year, a “job census” report by Power for All, a non-governmental organization focused on promoting renewable energy, showed that startups and other players in the space are creating jobs at a scale that’s already comparable to local utilities in Kenya and Nigeria.

Given obvious benefits, a protectionist recourse to preserving fading utilities at the expense of renewable energy upstarts might slow down growth in the sector but will ultimately prove futile, Tilleard says.

“We could lose five or ten years worth of fixing electricity on the continent to bad regulation and special interests trying to hold on,” he tells Quartz Africa. “But the inevitability of current cost curves for this technology means we’ll end up in the same place—the question is if we’ll waste a lot of time getting there.”

Reference: Solar providers in Africa are on a collision course with struggling national grid companies