A new dawn for solar energy

The cost of solar power has fallen 95% in 30 years, so why are we still building coal and nuclear plants?

To say Amar Inamdar has a vision is an understatement. The softspoken, steely-eyed Inamdar wants everyone in Africa to have access to electricity, and he runs a US$100M fund to do just that.

But not conventional coal-fired energy. Through Kawisafi Ventures, Inamdar wants to bring solar energy to East Africa, and his quiet confidence shows he’s making progress. “There is a revolution in the villages or towns around us,” he told the Tedglobal audience in Tanzania last month. “It is an echo of the cellphone revolution and is also wireless. Now it is solar.”

But the problem is the old ways of thinking about energy are rooted in unsustainable business models, which can never scale to reach the demands of a power-hungry Africa.

There are 620m people in Africa without a connection to the electricity grid, he said, and it would cost $1,500 to connect each household to the grid. Doing so would take about nine years.

“The cost of building these grids is unsustainable. If you add up the deficits all the utilities run, it costs $21bn/year to maintain that system and keep it going,” he told the audience, later telling me a large chunk of that figure is because of Eskom.

SA’S national power utility is so stuck in the past it can’t even agree on how to include solar in its energy mix, and has recently set back the renewable energy sector with more mindless, unsubstantiated obstruction.

A former World Bank heavyweight, Inamdar has worked at energy giant Shell for the past three years on new energy projects and investments in Africa. Now he is driving those investments himself, with an impressive list of backers, including the Green Climate Fund and Acumen.

Though “photons fall on roof tops sufficient for every household’s needs . . . up until now the technology hasn’t been available. A group of companies [has] been chipping away at that problem over 10 years. They recognise that great big ‘nuclear reactor’ up in the sky. In Africa we are endowed with more access than anywhere else.”

Three factors are important for this new way of getting energy. First, the cost of solar power has come down drastically. “It’s absolutely collapsed in 30 years, and gone down 95%.”

Second, energy-efficient LED lightbulbs are 85% cheaper than five years ago, and give “10 times the amount of light and last 30 times longer”.

Third, the solar market, especially in M-pesa-mad East Africa, can piggyback off the cellular revolution, allowing people to pay off their solar kits in small increments of mobile money, often the same amount they would spend on kerosene.

The market in Africa for cellphone charging, batteries for torches and kerosene is worth $27bn/year. “There is not enough working capital coming into solar because banks don’t know how to price the risk, so they do not come in at all,” he said.

If only Inamdar were to live in SA. He might then be able to save us from Eskom’s lack of vision.

A group of companies has recognised that great big ‘nuclear reactor’ up in the sky