Solar PV in Africa: Costs and Markets

Africa has abundant renewable energy resources. Traditionally reliant on hydropower, the continent is turning to solar photovoltaics (PV) to bolster energy security and support rapid economic growth in a sustainable manner. With recent substantial cost reductions, solar PV offers a rapid, cost-effective way to provide utility-scale electricity for the grid and modern energy services to the approximately 600 million Africans who lack electricity access.

According to this report, installed costs for power generated by utility-scale solar PV projects in Africa have decreased as much as 61 per cent since 2012 to as low as USD 1.30 per watt in Africa, compared to the global average of USD 1.80 per watt. These cost reductions, coupled with vast solar potential on the continent, present a huge opportunity for Africa to increase energy access, improve quality of life and mitigate climate change.

The report shows that mini-grids utilising solar PV and off-grid solar home systems also provide higher quality energy services at the same or lower costs than the alternatives. Stand-alone solar PV mini-grids have installed costs in Africa as low as USD 1.90 per watt for systems larger than 200 kilowatt. Solar home systems – which have tripled in Africa between 2010 and 2014 – provide the annual electricity needs of off-grid households for as little as USD 56 per year, less than the average price for poor quality energy services.

IRENA estimates that with the right enabling policies, Africa could be home to more than 70 gigawatts of solar PV capacity by 2030. The report discusses challenges in policy making and proposes a co-ordinated effort to collect data on the installed costs of solar PV in Africa, across all market segments. Such information will improve the efficiency of policy support and accelerate deployment.