Insiders predict that agricultural companies could become major adopters of solar power in Africa as farmers strive to improve the cost and reliability of their energy supply.
According to a report by the nonprofit organization GreenCape, last year the market for renewable energy for agriculture reached up to 960 million Rand (currently $61 million) in South Africa alone.
According to the report, 1 in 10 South African solar facilities are in the agricultural sector and the market is expected to grow by 10% per year.
Frank Spencer, director of the South African Solar Industry Association, said solar is showing “exponential growth” in the agricultural sector.
“The agricultural sector’s power supply and demand profile perfectly fits solar PV,” he said in an email. “We expect this trend to continue as solar PV technology matures and costs continue to decline.”
Given the cost and reliability of solar power during the day in Africa, “this kind of application can be applied wherever there is weekly power usage throughout the year,” he said.
The term “agricultural solar power” often refers to the placement of PV projects together on the same land where crops are growing or livestock grazing, but in Africa the location aspect is not the main focus. Instead, businesses primarily use solar electricity to pump irrigation water and cool the product before shipping.
Solar as an inexpensive and reliable power source
In both situations, PV can be more reliable than grid supply and cheaper than diesel generation, Edwin Masimba Moyo, chairman of Zimbabwe’s Nhimbe Fresh Exports, said in an interview.
As one of Africa’s leading exporters of blueberries, strawberries, raspberries and peas, Nhimbe Fresh has led to irrigation losses or decay of commodities that need to be refrigerated after harvest due to grid outages that can take weeks to resolve. .
Until now, Nhimbe has relied on diesel generators to overcome grid outages. However, the cost of diesel can be up to $800,000 per year. “It’s a big number,” Moyo said.
To overcome this problem, Nhimbe is procuring approximately 1.9 megawatts of solar and 3.9 megawatt hours of battery systems for farms, pump stations, pack houses and cold storage.
The system is being procured through Sun Exchange, a peer-to-peer solar leasing platform that allows international investors to purchase PV projects for commercial and industrial-scale customers in Africa.
Nhimbe is Sun Exchange’s second entry into agricultural PV after a project to install a 473 kilowatt system in Boland Cellar, one of South Africa’s largest wine companies. PV systems provide a quarter of Boland’s energy requirements, reducing electricity bills by 34%.
“Until recently, Sun Exchange has focused on school and small business projects,” said Abe Cambridge, founder of the platform, via email. “But only last quarter we hosted crowdsale for two agribusinesses and we’re putting more in the pipeline.”
Solar power is becoming an important tool for reducing operating costs on African farms, he said. “Many farming activities take place during the day when solar energy is readily available.
“The solar system perfectly matches the operating characteristics of the farm, greatly reducing the power requirements. Many farms have refrigerated bins and tend to require the most energy during the day or when it’s hot, even when solar power is at its highest.”
New financing model to release dormant capacity
Moyo said Sun Exchange’s financing model is a decisive factor in Nhimbe’s transition to solar. The advantage of this concept is that the initial cost of purchase and installation is borne by the Sun Exchange investor, and the customer pays for electricity to benefit.
“This allows farms and agricultural businesses to use solar power without equipment, installation, insurance or ongoing operating costs,” Cambridge said. “In an instant, we can cut energy costs by 20% or more and save an average of 40% or more compared to the total 20-year rental period.”
Other procurement options are also available. Spencer of the South African Solar Industry Association said the most common model is to buy a solar system entirely, which yields a payback period of between 3 and 5 years.
Another viable model for agricultural PV in South Africa is the Asset Valuation Clean Energy Plan, which allows asset owners to cover up-front costs of energy and then reimburse their costs over time through a voluntary assessment. .
Solar and crop mix vs. Rooftop and green space alternatives
Access to finance will further increase the momentum of agricultural PV in Africa. However, it remains to be seen whether the benefits of combining PV and agriculture could be replicated in other parts of the world if solar panels were installed directly on farmland.
As long as several gigawatts of PV coexist with agriculture in China, a BloombergNEF study found that the main reason for the pairing was limited land availability in areas with high demand for electricity and high grid resources. This study found that the situation was not optimal for agriculture or PV.
“The problem with a global analysis of everything that has to do with agriculture is that it depends on the climatic conditions and the crops you are growing. [and] Labor and machine availability,” wrote in an email, Jenny Chase, director of photovoltaic analysis at BloombergNEF. “It may vary by year.”
As a result, she said when it comes to agriculture and PV, “I think it’s on an opaque roof that I’m cautious of and knows that the best place to place solar panels now is going to stand for at least 30 years.”