For almost five decades, hydroelectric power from the Volta region has been Ghana’s energy backbone, while the nascent oil and gas industry has recently risen up the agenda. But solar power could play an increasingly important role.
With over 5 million households off-grid, market potential for solar energy in Ghana is calling investors’ attention to expand mini-grids in rural and peri-urban areas.
Yet, business sustainability and return on investments remain question marks despite the attractive legal framework which followed Ghana’s Renewables Energy Act 2011. To date, modalities to offset feed-in tariffs are still unclear while doubts continue to cast over the capacity of Electricity Company of Ghana (the national electricity off-taker) to pay independent power producers (IPPs).
Some industry actors are however hopeful. Sidney Yankson, CEO of the Africa focused private equity boutique Ghana Capital Partners (GCP), currently developing a 28MW solar power plant (costing $56million), does not deny these arguments but remains strongly confident in advocating for solar. He told Africa Energy that solar energy is becomingly increasingly viable from a financial perspective also in Ghana, “both for commercial and residential purposes. The price of solar PV panels keeps decreasing and the appeal of a reliable energy source, powered by the sun, whose installation price will decrease – unlike the conventional electricity – cannot be underestimated.”
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