Insiders predict agricultural companies could become major
adopters of solar power in Africa as farmers seek to improve the
cost and reliability of energy supplies.�
According to a
report from GreenCape, a non-profit organization, the market
for renewable energy in agriculture last year was worth up to 960
million South African Rand ($61 million at todayâ€™s rates) in
South Africa alone.
One in 10 South African solar installations were in the
agricultural sector, said the report, and the market was expected
to grow at 10 percent a year.
Frank Spencer, a board member at the South African Photovoltaic
Industry Association (SAPVIA), said solar was seeing â€œexponential
growthâ€ in the agricultural sector.
â€œThe electricity demand and supply profiles of the agriculture
sector make solar PV a perfect fit,â€ he said in an email. â€œWe
envisage this trend to continue as solar PV technology matures and
the costs continue to decrease.â€
Given the cost and reliability of solar generation during the
day in Africa, â€œthis kind of application is applicable wherever
there is daytime usage of electricity throughout the year,â€ he
While â€˜agricultural solarâ€™ elsewhere tends to refer to the
co-location of PV projects on the same land where crops grow or
livestock grazes, in Africa the location aspect isnâ€™t key.
Instead, itâ€™s the fact that businesses mainly use solar
electricity to pump irrigation water and to chill produce before
Solar as a source of low-cost, reliable power
In both situations, PV can be more reliable than grid supplies
and cheaper than diesel generation, said Edwin Masimba Moyo,
executive chairman at Nhimbe Fresh Exports of Zimbabwe, in an
One of Africaâ€™s top exporters of blueberries, strawberries,
raspberries and peas, Nhimbe Fresh has been blighted
by grid outages that can take up to weeks to sort out, leading
to loss of irrigation or spoilage of goods that have to be
refrigerated after picking.
Until now, Nhimbe has relied on diesel gensets to ride through
grid outages. But the cost of diesel can be significantâ€”up to
$800,000 a year. â€œItâ€™s a big number,â€ Moyo said.
To overcome this problem, Nhimbe is procuring around 1.9
megawatts of solar plus a 3.9 megawatt-hour battery system for its
farm, pump sites, pack house and cold store.
The system is being procured via Sun Exchange, a
peer-to-peer solar leasing platform that allows foreign
investors to crowdfund PV projects for commercial and
industrial-scale customers in Africa.
Nhimbe is Sun Exchangeâ€™s second foray into agri-PV, following
a project to install a 473-kilowatt system at Boland Cellar, one of
South Africaâ€™s largest wine companies. The PV system delivers a
quarter of Bolandâ€™s energy requirements, cutting its electricity
bill by 34 percent.
â€œUntil recently, Sun Exchange has focused on schools and small
business projects,â€ said the platformâ€™s founder, Abe Cambridge,
in an email. â€œBut in the last quarter alone, weâ€™ve hosted crowd
sales for two agribusinesses, with more in the pipeline.â€
Solar is fast becoming an important tool for reducing the
operational costs of African farms, he said. â€œMany farm
activities take place during the day, when solar power is readily
available,â€ he commented.
â€œHaving a solar system perfectly aligns with the operational
nature of farms, significantly reducing power requirements. Many
farms have cold stores and these tend to require the most energy
during the day or when it is hot, which also happens to be when
solar generation is at its highest.â€
New funding models to unlock fallow capacity
Moyo said Sun Exchangeâ€™s funding model had been key in
enabling Nhimbe to move to solar. The benefit of the concept is
that the upfront costs of purchase and installation are borne by
Sun Exchange investors, who then profit from electricity payments
made by the customer.
â€œThis allows farms and agribusinesses to go solar with no
equipment, installation, insurance or ongoing operational costs,â€
said Cambridge, and â€œresults in an immediate energy cost
reduction of at least 20 percent, and average savings of over 40
percent over the full 20-year lease term.â€
Other procurement options are available, of course. SAPVIAâ€™s
Spencer said the most common model was to purchase a solar system
outright, with a payback of between three and five years.
Another model that may be viable for agricultural PV in South
Africa is the Property Assessed Clean Energy scheme,
which allows asset owners to finance the upfront cost of energy and
then pay the costs back over time through a voluntary assessment
and with debt tied to property.
Mixing solar with crops vs. rooftop, greenfield alternatives
Access to finance will be likely to further increase agri-PVâ€™s
momentum in Africa. But it remains to be seen whether the alleged
benefits of pairing PV with farming can be replicated in other
parts of the world â€” particularly where solar panels are sited
directly on farmland.
One BloombergNEF study in China, where several gigawatts of PV
are co-located with agriculture, found the main reason for the
pairing was limited land availability in regions with strong
electricity demand and grid resources. The situation wasnâ€™t
optimal for farming or for PV, the study found.
â€œThe problem with a global analysis of anything to do with
agriculture is it differs by the climatic conditions, the crop you
want to grow [and] the availability of labor and machinery,â€
Jenny Chase, head of solar analysis at BloombergNEF, wrote in an
email. â€œIt can even differ by year.â€
As a result, she said, when it comes to agriculture and PV, â€œI
am cautious, and for now think that the best place to put solar
panels is on an opaque roof that you know will be standing for at
least 30 years.â€
Source: FS – GreenTech Media
Could Agri-PV Be Africa’s Next Big Solar Market