Off-grid solar PV is a rapidly growing market, particularly in
emerging economies. According to the International Energy Agency
(IEA), more than 1.3 billion people globally are without access to
electricity. More than 95% of these people are either in sub-Saharan
Africa or developing Asian countries. 1 Even where
a grid power connection is available, supply is often limited — or
there are frequent power outages. Access to electricity could lead
to life-saving improvements, be it in the areas of health,
communications, or education. But as incomes in emerging markets
rise, so does the number of consumers who can afford electrical
goods. They are rightly demanding better services and opportunities
for economic and social development.
However, the use of off-grid solar PV is not restricted to countries
in the developing world alone. Standalone solar systems are as well
applied in developed countries, either as add-on or back up-systems,
or as full self-supply solutions. Areas of application include, for
example, barns and sheds in the agricultural sector or energy supply
for holiday homes in more remote areas. Advantages of off-grid PV
systems compared with grid-connected installations are greater
flexibility and mobility.
In some cases, off-grid technology provides improved infrastructure
and new business opportunities. So far, in emerging economies, many
communities and households without access to the grid — or with only
limited grid access — have been relying on diesel generators. As the
price of diesel increases, off-grid electricity generation is
becoming more attractive, even without subsidies or Feed-in Tariffs.
The good thing about solar panels is that they don’t have any moving
parts that require servicing, and they require no fuel. What’s more,
solar PV systems are quiet and clean compared with noisy and
polluting diesel generators. They are also much safer than kerosene
lamps, which cause health and pollution problems.
Unfortunately, off-grid, rural areas aren’t very enticing for big
electricity providers. There is little incentive for them to extend
their grid, primarily due to the high cost, poor economics,
corruption and red tape. Off-grid solar PV systems can fill the gap
– they can provide a secure energy supply where no reliable public
electricity grid is in place, making a significant contribution
towards electrification in under-developed areas.
Thankfully, the latest generation of off-grid solar systems comes
with batteries.2 While this makes them more expensive (batteries
can add as much as 40 per cent to an off-grid solar system's cost
and the batteries will have to be replaced at some point) it also
enables them to back up vital energy-dependent areas such as
telecommunications, education and health systems and domestic power
requirements.
When it comes to such systems, it’s critical that an off-grid solar
PV offering be robust, have a high output performance and be
user-friendly. The goal is “real plug and play”, so that they
can be individually aligned to local conditions and put into service
without any need for detailed technical knowledge - an electrician
is mainly just needed to ground the unit.
Off-grid PV financial aid
Equally important is affordability: access to finance is
the main obstacle to the expansion of off-grid solar PV. It
may be possible to reduce the cost of off-grid solar systems by
increasing the efficiency of electrical appliances — for example,
installing LED light bulbs and newer model refrigerators and
computers. However, the initial investment might still be a
challenge for low-income families or poor communities.
That’s why off-grid solar systems have attracted the
interest of development aid organisations wanting to fund
electricity supplies for families and small businesses in rural
areas of the developing world. Back in 2008, the World Bank approved
two projects in Bangladesh to install 1.3 million solar home
systems. And its China Renewable Energy Development project, which
closed in mid-2008, installed more than 400,000 solar home systems
in north-western China.
Smaller charities and foundations are also helping. The
GOEDE Foundation, part of the German GOEDE Group, set up a “Solar
Energy for Education” project, which provides solar PV systems to
give people in off-grid, rural areas access to modern education
technology. It has already shipped 100 PV-systems to the northern
Vietnamese region of Quang Ninh, where they enable both children and
adults to watch educational TV programmes and use DVDs with
educational materials for up to four hours each day.
Microfinance Institutions, or MFIs, can also play an important
role in financing off-grid solar PV, for instance, by
offering poor clients loans for energy products, or by assisting
local energy companies to expand into new, rural markets and thereby
creating business opportunities for energy suppliers and users.
Pay-as-you-go (PAYG) payment options could also be a solution
for emerging markets: customers could pay for the services via
scratch cards validated through a text message. This enables them to
make a low-cost down payment for a solar photovoltaic system and
removes the obstacle of asking very low-income communities to pay
large upfront costs.
Early indicators suggest the future for off-grid solar holds
tremendous potential. According to a McKinsey study from May 2012,
the demand in the off-grid solar segment could reach 15 to 20 GW by
2020. Why so bullish? Some believe on-grid power supply will not be
able to meet growing demand, especially in developing countries,
where the cost of rolling grid connections into many rural areas can
be prohibitive. And in Western countries, increasing energy costs
may very well push interest in off-grid PV because it allows for
independence from the price settings of the large energy suppliers.
Also, the steadily rising cost of fossil fuels means solar battery
systems offer greater long-term returns. In short, the market for
reliable, inexpensive energy has never been better.
http://www.renewableenergyfocus.com/view/38378/time-is-ripe-for-off-grid-solar/