Challenges in the Industry

Presented By:Omane Frimpong

President:

Association of Ghana Solar Industries

10th December 2013

www.ghanasolarindustries.com

TOPIC:

Status and Development of the

Local PV Market Structure

SCOPE

• Background of Ghana/PV

• PV Market structure

• Market development and growth

• Potential for Growth

• Ghana German collaboration

• Challenges in the Industry

• Potential for off-grid, Roof top projects

SOLAR RADIATION MAP OF GHANA

climatic Zone Region Intensity

(kWh/m2-day)1

Savannah

(close to the

Sahel)

Upper East, Upper West ,

Northern, upper parts of

Brong-Ahafo & Volta

Regions

4.0 – 6.5 kWh/m2-

day

Middle Forest

Zone

Ashanti, Eastern, Western

and parts of Central,

Brong-Ahafo , Volta

Regions

3.1 – 5.8 kWh/m2-

day

Savannah

(Coastal belt)

Greater Accra, coastal parts

of Central & Volta Regions 4.0 – 6.0 kWh/m2-

day source: Energy

Center

(KNUST)

SOLAR INTENSITIES IN GHANA

2530Systems

3500Systems

4911Systems

700Systems335Systems

160kW353kW

510kW800kW

1000kW

1991 1993 1998 2000 2003

Year

No. of Systems

Installed Power

Source: Ministry of Energy, Obeng George

EVOLUTION OF SOLAR PV INSTALLATIONS IN GHANA

PV MARKET STRUCTURE

Regulation

EC, MOEP, PURC

Regulation

EC, MOEP, PURC

Over 30 AGSI companies

active

Over 30 AGSI companies

active

Training

KNUST, K’duaPolytechnic,

DSTC

Training

KNUST, K’duaPolytechnic,

DSTC

Buyer

Gov’t, off-grid customers, etc

Buyer

Gov’t, off-grid customers, etc

Design & Installation

Market Development and Growth

• Not much scientific data exist on size, growth,

turnover etc.

• Opportunistic Market growth – influx of players

during peak demand (such as the power crisis of

1997, 2007, 2012) but as soon as the crisis is over

players reduce significantly.

• Significant price falls in PV cells has boosted the

market entry.. from $8/w in 2006 to $1.6/w 2013

Key Drivers for Growth

• Government buying

• Tax incentives (waivers and exemptions)

• Low electrification rate in Rural Ghana

• Donor programs

• Strong sector Association engaged in lobbying

• Passage of the RE law (grid connected systems)

• Electricity Tariff

PV development in the last

few years

• Renewable Energy Act 832 of Parliament 2011

• 1st Grid connected system installed (2mw)

• FIT (Feed-in-tariff)

• GEDAP

• Mini grids (Hybrid) underway on selected

Islands

Potential for Growth

• Gov’t policy of 10% Renewable in energy mix

• A surging supply-demand imbalance of electricity.

• 70% Electrification Rate

• Low rural penetration rate of electricity

• RE Law

• Stable political economy

• Guaranteed pricing for electricity.

• High Tariff (Recently announced by the PURC)

• Continued demand for Electricity (10% annual)

• Unstable Grid Power (power cuts are frequent)

• Most Commercial businesses operate during the sunshine hours ie during the day.

Possible German-Ghana

Collaboration

• Project concept design, engineering and

construction

• Financing and Equity investments

• Technical knowledge transfer

Challenges in the Industry

• Buyer decisions

• Commitment of

stakeholders

• Institutional

Capacities

• Technology

reliability

• Support Services

catching up

• Economic

landscape

Challenges in the Industry 2

Source: http://www.gridcogh.com/site/downloads (Ghana Wholesale power reliability assessment 2010)


Technical capacities, institutional support, other

support services.

Demand for Electricity is at night i.e. 7-9pm

Technical

Financial

Tariffs

Local Banks rate quite prohibitive for financing

options,

Cost of electricity 18GHp – FIT GHp40 ???


Political Political will, focus of Energy Policies of subsequent governments, Focus of dev’t partners,

Policy

Processes in acquiring licenses and permits to

operate, slow administrative procedures…chasing

documents at gov’t agencies.

Regulation

implementation challenges, eg. Law passed in 2011 operationalized in 2013, lack of clarity in certain provisions,

Potential for off-grid projects

• Over 1000 communities are not captured

under government grid electrification projects

due to their remote and Island nature.

• Rising cost of grid electricity.

• High Potential for roof mounted systems for

Commercial Buildings whose consumption

exceed 400kwh/month.

• Net Metering

Approved Residential End User Electricity Tariff

Effective October 01 2013

Source: Public utility regulatory commission press release 1st October 2013

*1Euro is equivalent to 3.16GHC

Approved Non- Residential End User Electricity

Tariff Effective October 01 2013


*1Euro is equivalent to 3.16GHC

Approved Special Load Tariff (SLT) Effective

October 01 2013


DANKE

Challenges in the Industry

Documents