A 30-year battery system? Deployed to a remote village? Many people think this is impossible. Homes, businesses and even government buildings in Africa’s biggest cities are lucky to have solar systems with batteries that last five years.
Anyone who has worked on solar projects in Africa knows that you must overcome a gauntlet of obstacles: hot temperatures, dust, demanding load, and high discharge cycles. It’s hard to find technology that can stand up to these challenges. As a result, people spend an exorbitant amount of time and money getting available technology to work, and then endlessly replacing batteries and electronics to keep their systems running.
Sure, higher quality products could potentially solve some of these challenges. They would be more efficient, longer-lasting and safer. But higher-quality systems cost more upfront and installing them requires advanced training, beyond what’s typically available in the developing world.
That seems daunting, for sure. However, when you do the long-run math, a higher-quality system is actually more affordable. A lead acid battery system that requires batteries to be replaced every 5-7 years can easily be twice the lifetime cost of a 30-year battery system.
Selling electricity to homes and businesses per kilowatt typically does not generate enough income for a project to break even. Market rates are typically around USD $0.20 per kWh. So even if you have 100 households each using 30kWh per month, it will still take you 8-10 years to pay back the initial investment into a system that costs $100,000. Many investors want to break-even on their investment in 5 years, and at which point they will begin to see a return on the capital invested.
Another challenge that adds cost to a project is that traditional installations out in the field often have parts and tools that go missing, or solar components are found to be defective. Teams of workers can be waiting around for a part to be flown in or purchased in a distant town. This adds unnecessary cost and time to projects.
The solution is to create a system that is affordable over time and pays for itself over 4-5 years. This means installing systems that are safe, long lasting, and quickly installed, that cost less over a 30-year lifespan, and don’t require repetitive replacement of expensive batteries and components. This also requires establishing an anchor customer who is generating significant revenue through productive use of the electricity.
We recently found a way to put all of the puzzle pieces together to bring a 30-year battery system to a remote African village. Here’s what we learned:
1. Create a long-term business strategy for the mini grid
The best projects inject new cash into the local economy via exporting a product, or they supply to a local unmet demand like milling maize into flour.
One way to do this is to find a business “anchor”that owns and operates the solar mini grid system and utilizes the electricity generated for productive use. We have seen many examples of this in agriculture, like drying or canning fruit for resale, coffee roasting, oil presses for sunflowers, and mill grinding of maize and cassava. If the power generated by the system increases profitability (e.g. through higher yields, less waste due to spoilage, etc), it enables the business to receive a faster return on investment than you would see for household-only use.
Many of these businesses choose to extend electricity out to the homes of their farmers, creating a circular economy. For example, a fruit company might use a solar mini grid to power a refrigerated container. The “chill store” keeps fruits and vegetables cold, and extends the quality and life of produce which can be sold to consistent buyers like grocers, restaurants and lodges. The incremental revenue helps pay for both the initial cost of the solar mini grid, but also pays for the electrification of the homes of the farmers who are supplying the produce. The farmers earn consistent income, and use part of that income to pay for electricity in their homes, thereby creating a circular economy. As a result, the farmers have jobs, food security, and electrification for the first time, all in one fell swoop.
2. Build strong partnerships
No amount of fantastic ideas, high quality product, or strategic planning is enough if you don’t have the right people in place. It is critical to have boots-on-the-ground that can implement the business plan every step of the way. Having staff to run operations, meet a growing demand for power, supply a product or service, and maintain the mini grid is vital to the success of a project. The operating organization must be a pillar in the community, having built up trusting relationships over time. Having strong partnerships with the people in the field, with stakeholders, and managers of projects are critical.
3. Train local talent
To install 30-year batteries require advanced training. While some training is offered through webinars, in-person training is often found abroad, which can be too expensive for African solar companies. As a result, expats from other countries fly in to be the “hero” to program and commission the system. Meanwhile, there is incredible talent and experience within Africa that needs to be nurtured and supported. Every mini grid project is an opportunity to offer local talent the detailed, on-the-job training they need. Doing this creates a legacy of highly skilled local technicians who can maintain the system over the long term.
4. Pre-install everything before it arrives on site
Traditional installations out in the field are often stalled when a tool or part goes missing, or when a solar panel is found to be defective. Work crews who are waiting around on the job, getting paid hourly while they are also fed, and housed, adds enormous cost to a project.
The solution is to pre-install and fully test the entire system in a controlled factory setting, where all parts, materials, and tools are there, and where uninterrupted wi-fi and electricity are available. This decreases overall costs to each project.
At the end of the day, a solar mini grid must be financially viable with revenues exceeding upfront costs. High quality and long-lasting systems are more cost effective over the long run. With the right partnerships, business strategy, and infrastructure, solar mini grids become a sustainable and financially feasible investment, making it easier to scale high quality systems across the continent.