More solar PV systems are installed in Bangladesh than in Germany and the United States combined. At the end of 2013, Bangladesh had an estimated 2.9 million solar PV systems installed compared to 1.4 million in Germany and 445,000 in the United States.
This is despite the fact that Bangladesh is one of the poorest countries on the planet, with per-capita income of less than $3,000 per year. In Bangladesh, solar home systems (SHSs) range from 10W to 200W. Approximately 50% of all systems sold in Bangladesh are between 20W and 30W – roughly 1% of the capacity of a medium-sized residential system in the United States, but enough to power a few compact fluorescent or LED lights, charge a cell phone, or power a radio. At an average cost of about $230 for a 20W SHS in Bangladesh, an upfront cash payment is out of reach for people who make less than $9 per day. But thanks to the success of micro-credit programs that made Mohamad Yunus and Grameen Bank household names, SHSs are affordable to all.
Home Systems Multiply
Grameen Shakti, based in Dhaka, is the solar power arm of the Grameen Bank and is the leading SHS installer in Bangladesh, with an estimated 1.3 million installations to date. These installations represent more than 30 MW of installed capacity. The model relies on an extensive network of sales agents who can reach remote areas, low interest loans, and numerous grants that provide seed funding. Grameen Shakti provides free operation and maintenance services for 3 years after installation, with low-cost service options thereafter.
With a strong emphasis on grassroots education, Grameen Shakti has contributed to the industry’s high visibility in Bangladesh, where there are now around 40 providers of SHSs. The company sells approximately 1000 SHSs per day and is targeting 2 million SHS sales by the end of 2016.
The government of Bangladesh – whose low-lying topography makes it especially vulnerable to the effects of climate change – has set a target of generating 5% of its power from renewable energy sources by 2015 and 10% by 2020. The pipeline of projects started small, but is now growing considerably. The country has approximately 10 GW installed capacity, with only 75% of that power actually available at any given time due to grid reliability issues. That relates to roughly 136 kWh available per capita each year – one of the lowest rates in the world. Compare that to an average household consumption of 1000 kWh per month here in Portland, Oregon.
Changing the Model
Rahimafrooz Renewable Energy Ltd. (RREL) represents the growing number of hybrid companies with a foot in the SHS market and many others, including agriculture, healthcare, education, telecommunications, rural street lighting, and marketplaces, as well as government and private institutions. RREL has installed 300 solar water and irrigation pumps, 2 MW of solar rooftop solutions, and more than 100 solar-powered telecom base stations in Bangladesh.
Meanwhile, the company’s not-for-profit venture, Rural Services Foundation (RSF), has disseminated nearly 426,000 SHSs under the Infrastructure Development Co. Ltd. (IDCOL) program, representing more than an estimated 12 MW at the end of 2013. This makes it the second-largest SHS installer in Bangladesh, behind Grameen Shakti.
As I’ve covered previously in blogs and Navigant Research’s report, Solar PV Consumer Products, countries such as Bangladesh, Kenya, Tanzania, and others are challenging traditional Western perceptions of developing countries and approaches for tackling poverty. Investors have also taken notice. Solar’s very favorable current market forces (low cost) and unique advantages in economic development (health benefits and cost savings) can be leveraged to enable the continued expansion of solar PV to even the most remote regions – and the poorest countries.
Tags: Climate Change, Distributed energy, Finance & Investing, Microgrids, Smart Energy Program, Solar Power
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