SOLAR PHOTOVOLTAIC (PV) IN WEST AFRICA : LEARNINGS FROM BENIN About this brief The brief was authored by Innogence Consulting in collaboration with ARESS. Innogence Consulting would like to thank ARESS for providing the data used in this brief, which were extracted from invoices issued since they began operations in Benin in 2013. Innogence Consulting ARESS Innogence Consulting provides market Africa Renewable Energy System & Solution research and strategy consulting services to (ARESS) is a leading provider of renewable private companies and public institutions. energy solutions with a focus on solar Our team operate in 24 countries in Africa. energy. The company operates in West To find out more about Innogence Africa, with teams in Benin, Togo, Burkina Consulting, consult the website: Faso, Mali and Sénégal. www.innogenceconsulting.com To find out more about ARESS, consult their website: http://www.aress-group.net/ 2 Ressources Énergétiques du Benin, in its Introduction 2018 report, 29.2% of Beninese citizens have access to electricity, with a significant disparity between urban (53.9%) and rural Benin has been experiencing a rapid areas (6.5%). The National electrification economic growth with a corresponding rate includes every structure that have ever increase in the demand for energy. been connected to the national grid and Keeping pace with the rising energy needs, doesn’t factor in the consistency of the to enable economic growth and extend power supply. access to modern energy to those lacking, is presently the agenda as well as challenge Government has set an electrification for policy makers in the country. Trying to target rate of 95% Urban electrification and solve this while betting on clean energy, 65% Rural electrification by 2025. To well known to be better for the planet and achieve this goal and given the country’s humanity rather than energy derived from low population density and low purchasing fossil fuels, makes it even more power, especially in rural areas, the challenging. government supported the development of decentralised energy production in The Beninese government has a unique underserved communities. Benin adopted opportunity to accelerate sustainable the Millennium Challenge Corporation development by putting renewable energy (MCC) reform agenda and created the at the heart of its economic development « Off-Grid Clean Energy Facility » (OCEF), plan. The significant amount of perceived which aims to improve access and knowledge about the cost and availability of electricity for use by performance of renewable power households. generation in Benin can be misleading because of the lack of accurate, comparable, reliable and up-to-date data. Like most countries in Sub-Saharan Africa, Benin's energy sector is largely dominated by the use of fossil-based energy and the national grid remains widely unreliable, plagued by wide variations in voltage and frequent power cuts, leaving most of its citizens underserved or unserved by the national grid provided by the Beninese electrical power-company, Société Béninoise d’Energie Electrique (SBEE). Electricity consumption per capita in Benin is below 110 kWh per year, less than 25% of the continent’s average of 483 kWh1. According to Direction Générale des 1 World Bank : https://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC?locations=ZF-BJ 2 3 Table 1 : Benin key statistics Benin. All these different initiatives and efforts by the government to promote the Key indicators for 2018 uptake of SHS, helped in accelerating access to clean energy with more and more Total Population 11.5 M homes, especially in the rural areas, purchasing solar kits. Between 2016 and GDP per capita $901.90 2019 over 250,000 units of solar kits were sold in Benin, and the country was largely dominated by Pay-As-You-Go (PAYGo) Urbanisation rate 55.3 % sales rather than outright purchases of the solar home systems and much of its sales National electrification rate 29.2 % include kits with basic appliances like radios and TVs. Urban electrification rate 53.9 % Rural electrification rate 6.5 % 259,115 portable lanterns, Number of household without 1.4 million multi-light systems and power solar home systems Electrification target rate by were sold between 2025; 2016 and 2019 Urban electrification 95 % Source: Gogla off grid solar sales report 2020 Rural electrification 65 % Source: Gogla country brief - Benin, INSAE, DGRE Benin In a bid to promote the uptake of Solar If these kits helped improve energy access Home Systems (SHS) and solar kits in in rural areas, their use is limited in urban Benin, the Government agreed to waive settings as their power output cannot the 41% tax (23% on import duty and 18% sustain the energy needs of city dwellers. on sales tax) for all solar products meeting Most urban homes in Benin need an Lighting Global Quality Standards under average of 1kW to fully power their homes, the « Power out of Poverty Partnership » and the energy capacity presently made initiative in 2014. Under the Energising available to customers via SHS (max of Development (EnDev) Benin Program of 250W) is not sufficient enough to power 2005-2021, which was created to promote home equipments like TV, AC, fridge, etc. private investments in clean energy, solar products have also been exempted from import duty and sales tax all in a bid to promote renewable energy as well as increase the National electrification rate in 4 commit to it. Most individuals have Benin’s learning factored in the costs of the heavy equipments like the panels, batteries, curve inverters etc., as well as the costs for BoS2 and manpower, and they have tagged solar energy to be more than they can handle Due to the upfront cost involved in their although they all agree on its long term installation, residential rooftop solar has benefits in power generation and reliability. had a very slow uptake in the Country. Even with its much-needed use for either Based on data collected from ARESS primary electricity (Off-grid) or for backup (African Renewable Energy Systems & power during the brownouts and blackouts Solutions), one of Benin’s top solar PV that frequently occur in Benin, homeowners providers, we can observe a decline in the who need more energy than what the SHS cost for installed energy capacity, a trend can supply have still not been able to which seems to be similar worldwide as shown in figure 1. Figure 1 : Global vs Benin average cost of installed kilowatt (kWp) 8000 $US World Benin 6000 $US 4000 $US 2000 $US 0 $US 2013 2014 2015 2016 2017 2018 2019 Source: IRENA, ARESS Looking at the graph, we can see a rapid According to ARESS’s data, the cost of a decline in the average cost per installed kilowatt of installed capacity costed $6,596 kilowatt, which means that solar energy is in 2013 and as at 2019 the cost dropped getting cheaper and more affordable over by almost 51% to $3,297 per Kilowatt over the years. the course of 6 years. This is consistent, even though rather lower, than the global 2 BOS refers to all components of a solar system other than the modules or large equipments. They include cables, frames, installation accessories, etc 5 trend which saw a 62% decline in the cost can observe that PV modules, batteries and of a unit kilowatt of installed capacity. inverters (named equipments in the graph) When looking at a breakdown of the account for approximately 80% of the total installation cost as shown in figure 2, we cost. The rest is split between Balance of System (BoS), taxes and manpower. Figure 2 : Cost segmentation for the installation of a kWp of PV solar in Benin 100 % 75 % 50 % 25 % 0 % 2013 2014 2015 2016 2017 2018 2019 2020 Equipments Manpower BoS Taxes Source: ARESS Good news is, the expensive equipments them not only cheaper but more are increasingly becoming cheaper and efficient. more available due to the following • Increased manufacturing scale and reasons: improved manufacturing processes also • Efficiency in solar equipments is mostly led to competitive prices. Competition driven by technology used in devices also helped drive prices down while like panels, batteries, Inverters, etc., and delivering on more and more efficient as science and technology improves, equipments. they get cheaper. Technology is These global trends also affected the local constantly advancing and innovations in Beninese market as we could observe a quantum physics and nanotechnology drop of 55% in equipments’ prices has increased the effectiveness of solar between 2013 and 2019 as shown in figure panels. These advances have helped 3. double, or even triple, the electrical output of solar power systems making 6 Figure 3 : Average cost of Equipments per installed KiloWatt (kWp) in Benin 6000 $US 4500 $US 3000 $US 1500 $US 0 $US 2013 2014 2015 2016 2017 2018 2019 2020 Source: ARESS A Solar Balance of System or BoS refers to the standards of the solar energy sector the components and equipment that move regarding the quality of materials, type of DC energy produced by solar panels installations, and the stable price of copper, through the conversion system, which in the decrease in price has not been as turn produces AC electricity. Like large substantial as that of equipments and has equipments, improvement in technology remained more or less constant. A price and competition have also driven the drop of 35% was observed in 7 years as it is decline of prices for BoS globally, which shown in figure 4. impacted Benin as well. However, due to Figure 4 : Average cost of BoS per installed KiloWatt (kWp) in Benin 1800 $US 1350 $US 900 $US 450 $US 0 $US 2013 2014 2015 2016 2017 2018 2019 2020 Source: ARESS 7 Solar energy installations were once staff to ensure that they are more efficient considered complicated and skilled at their tasks.