Rural Poverty Reduction, How Solar Energy Can Change the Tide - ILAPI

Purpose: To inform decision and shape the direction of policy into considering the use of renewal energy.

Policy actors: Institutions and Authorities such as Energy Commission, Volta River Authority, Electricity Company of Ghana, and Parliament are the policy actors to be influenced. The policy brief is aiming at influencing legislative process to reform the green energy sector.

Message: Considering investing 20% in solar energy for rural communities.

Title: Rural Poverty Reduction, How Solar Energy Can Change the Tide.

 

INTRODUCTION:

Solar energy is energy tapped from the sun and a wonderful source of energy to depend on due to its abundant availability. In Ghana, the major energy source is hydro-electricity power on the River Volta and the Bui Dam on the Black Volta River which generate 912 megawatts and 400 megawatts respectively. Rural dwellers depend also on the hydro energy as their main source of electricity for productivity. There is a vast availability of sun shine in Ghana per its location on the globe. Ghana lies on latitude 5°N and 11°N, and longitude 1°E and 3°W, which is within the tropics. The annual temperature is high throughout the year within the range of 26°c to 35°c. Moreover, Ghana is blessed with 10 hours of free sunlight every day. (Agbejule, 2010) Solar energy and its use have been limited greatly to the drying of foodstuffs for preservation. However, the advancement of modern technology has proven beyond doubt that more can be utilize with solar energy. The cost burden that comes with the use of hydro energy and its prepaid meter system has made the rural dwellers channel most of their income on electricity, where they are needed for both domestic and enterprise purposes. The income level of the rural dwellers is low and the drain caused by the burden of cost from hydro-electric energy couple as a setback to savings and investment culture. The income level of the rural dwellers is low hence unable to invest in ventures like education, health and enterprise for a better future. The research will examine the impact on solar energy in increasing rural household income and investment on other sectors like education, health and agriculture. If rural dwellers spend less on electricity with the use of solar energy would their income and moreover, offer them the opportunity to invest in the future of their education, health, and their business in order for them to be self-reliant and bring about development. Can the permanent installation and durability of solar energy can help relief the cost on hydro power by rural dwellers? Solar energy will play a significant role in the government’s renewable energy vision 2020, and distributed solar especially is being championed as a more financially prudent alternative to reducing national electricity demand in an affordable and sustainable manner.

 

ANALYSIS:

Ghana is endowed with renewable energy resources that can be utilized to contribute to sustainable economic growth of the country. It has been recognized that solar energy resources can ensure access to affordable modern energy services for the majority of rural communities; for domestic activities and for empowering enterprises for increased production, job creation and increased rural income - thereby reduce poverty.

The energy sector strategy and development plan completed by the ministry of energy in 2010 set an objective to achieve a 10% supply of renewable energy in the national grid. The legislative mandate to push for the realization of such a target was provided by the Renewable Energy Act, 2011 of Ghana. Primarily, the act was adopted in order to advance the development, management and utilization of Ghana’s renewable energy resources for the production of power in efficient and environmentally sustainable ways.

Access to electricity in Ghana is about 72% out of which 87% is utilized in urban areas and just under 50% in rural areas. The country is a net power exporter to neighboring countries; however, domestic demand is growing annually by about 10%, so there is an expected increase in generation capacity to more than 3.5 gigawatts (GW) by 2020. Ghana in preparation to this demand has developed a comprehensive grid code that needs to be revised to include specific conditions accommodating renewable energy storage capacity and distribution.

Per a 2015 energy commission data, the percentage of modern renewable in the national power supply mix was a puny 0.04% (2.5 megawatts VRA solar plant) although this should increase to a projected 0.18% in the next review with the grid integration of the 20MW BXC solar plant from Gomoa Onyandze in the Central region. Ghana abounds in renewable energy resources; the bulk of this potential largely remained untapped. The current renewable power output is still a far cry from the 10% target, yet the question of interest is; Is Ghana’s power supply reliable, affordable and accessible to all? Studies have shown that Ghana is prepared to ensure reliable, safe, secure and affordable renewable power grid integration. Therefore, the problem will not be the case of reaching the target, but the underutilization of solar energy to the disadvantage of Ghanaians who cannot access or afford energy from hydro-electric resources. Solar energy is an uprising energy resource being tapped by the few who can afford it with the help of private investors and some government initiatives. Solar energy is energy tapped from the sun and a wonderful source of energy to depend on due to its abundant availability in Ghana. The sun serves as a natural resource for energy generation; it is not transportable but requires a solar plant to be positioned in the direction of solar rays, unlike other renewable energy resources. The rural electrification project by government has been able to extend electricity to five hundred (500) rural communities as at 2014. In its quest of making electricity accessible to as many Ghanaians as possible and achieving UNDP universal access to electricity by 2016. The rural electrification project looks at extending access, however the cost burden of electricity on rural dweller is not making the rural folks take advantage of the project. The supply of electricity is erratic though expensive hence does not incentivize productivity.

 

CONCLUSIONS & RECOMMENDATIONS:

Private investors in collaboration with existing power providers should initiate grid-connected rooftop solar photovoltaic systems that are affordable to rural areas. The challenge over the years for private solar energy providers in Ghana has been the high taxes associated with importing raw materials needed for the solar panels; if government is not in the position to help her citizens enjoy the natural resources, then I believe they should create a conducive economic atmosphere for private entities to do so.

Another challenge has been the depreciation of the Ghana Cedi (currency) as investments are most likely to be denominated in foreign currency, while revenues are expected in cedi. Hence the need to put in place effective currency risk mitigation instruments that would help increase investor confidence in financing renewable energy projects.

There is a need to build the capacity of local private operators and financial institutions to develop and appraise bankable decentralized renewable energy project proposals. Government has to provide the supporting capacity for local financial institutes to be able to support the efforts of private operators and civil society organizations that are targeting rural areas in the provision of solar panels for energy. Thereby increasing market confidence and competition in the provision of energy - aside the national grid. This should drive down costs of providing solar energy to the rural areas.

Efforts should be targeted at rural agricultural communities where the use of basic technology will help increase productivity. These will include using group lending approaches and sustainable credit programs for low-income operators and farmers in rural areas to afford solar panels that will help increase productivity as well as increase their income. Additionally, researchers should be supported in designing solar equipment that will enhance rural enterprises, e.g. solar dryers that could be manufactured locally.

Rural development is in dying need of support for the utilization of renewable energy as an alternative to affordable energy for domestic and production purposes that will translate into income increment. The roadmap that will lead to this establishment in Ghana has already been laid out except for the aspect that will promote and encourage private operators, investors, financial institutions and civil society organization to be able to provide solar energy to rural areas at an affordable price. The onus therefore lies on government to provide the economic security and enabling environment for rural communities to benefit from a natural resource that is available.

 

CITATION AND REFERENCES:

 

Gauri Singh, Safiatou Alzouma Nouhou and Mohamed Youba Sokona. Ghana, Renewables Readiness Assessment: International Renewable Energy Agency (IRENA), 2015.

“Ghana’s Renewable Energy Readiness”. Daily Graphic 18 Sept. 2017: 53. Print.

Ghana Daily Graphic (2012), “GhanaWeb”, published 13 November 2012, www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=256346.

Government of Ghana (2012), “Ghana Sustainable Energy for All Action Plan” http://energycom.gov.gh/files/SE4ALL-GHANA%20ACTION%20PLAN.pdf.

http://www.ids.ac.uk/news/can-renewable-electricity-reduce-poverty

http://www.ghanaweb.com/GhanaHomePage/newsArchive /Ghana-begins-production-of-solar-systems-178634?channel=D1

Volta River Authority (2014), “Power Generation: Facts & Figures”, www.vraghana.com/resources/facts.php.

 

 

Evans Badu Boampong

Institute for Liberty and Policy Innovation (ILAPI-GHANA)

Lumumba road, Design house, fourth floor

Tema, Accra- Ghana

Mob: +233(0) 246380994

Email: evans@ilapighana.org

          ebboampong@gmail.com

Source: ILAPI