Are we there yet? Improving solar PV economics and power planning in developing countries: The case of Kenya
AbstractDespite the rapid decline in the cost of solar photovoltaic (PV) systems in the past five years, even recent academic research suggests that the cost of generating PV electricity remains too high for PV to make a meaningful contribution to the generation of grid electricity in developing countries. This assessment is reflected in the views of policymakers throughout Africa, who often consider PV as a technology suited only to remote locations and small-scale applications. This paper therefore analyzes whether, in contrast to conventional wisdom, PV is already competitive with other generation technologies. Analytically, the paper is based on a levelized cost of electricity (LCOE) model to calculate the cost of PV electricity in Kenya, which serves as a case study. Based on actual technology costs and Kenya’s solar resource, the LCOE from PV is estimated at USD 0.21/kWh for the year 2011, with scenario results ranging from USD 0.17-0.30/kWh. This suggests that the LCOE of grid-connected PV systems may already be below that of the most expensive conventional power plants, i.e. medium-speed diesel generators and gas turbines, which account for a large share of Kenya’s current power mix. This finding implies that researchers and policymakers may be mistaken in perceiving solar PV as a costly niche technology, rather than a feasible option for the expansion of power generation in developing countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number FNU-200.
Length: 28 pages
Date of creation: 18 Apr 2013
Date of revision:
solar photovoltaic electricity; on-grid electricity supply; levelized cost of electricity; developing countries; Africa;
Find related papers by JEL classification:
- C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AFR-2013-09-13 (Africa)
- NEP-ALL-2013-09-13 (All new papers)
- NEP-ENE-2013-09-13 (Energy Economics)
- NEP-REG-2013-09-13 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jann Lay & Janosch Ondraczek & Jana Stoever, 2012.
"Renewables in the Energy Transition: Evidence on Solar Home Systems and Lighting-Fuel Choice in Kenya,"
GIGA Working Paper Series
198, GIGA German Institute of Global and Area Studies.
- Janosch Ondraczek & Jann Lay & Jana Stoever, 2012. "Renewables in the energy transition - Evidence on solar home systems and lighting fuel choice in Kenya," Working Papers FNU-198, Research unit Sustainability and Global Change, Hamburg University.
- Lay, Jann & Ondraczek, Janosch & Stöver, Jana, 2012. "Renewables in the energy transition: Evidence on solar home systems and lighting fuel choice in Kenya," HWWI Research Papers 121, Hamburg Institute of International Economics (HWWI).
- Paul Collier & Anthony J Venables, 2012.
"Greening Africa? Technologies, endowments and the latecomer effect,"
OxCarre Working Papers
089, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- Collier, Paul & Venables, Anthony J., 2012. "Greening Africa? Technologies, endowments and the latecomer effect," Energy Economics, Elsevier, vol. 34(S1), pages S75-S84.
- Paul Collier & Tony Venables, 2012. "Greening Africa? Technologies, endowments and the latecomer effect," Economics Series Working Papers WPS/2012-06, University of Oxford, Department of Economics.
- Paul Collier & Anthony J. Venables, 2012. "Greening Africa? Technologies, endowments and the latecomer effect," CSAE Working Paper Series 2012-06, Centre for the Study of African Economies, University of Oxford.
- Deichmann, Uwe & Meisner, Craig & Murray, Siobhan & Wheeler, David, 2011.
"The economics of renewable energy expansion in rural Sub-Saharan Africa,"
Elsevier, vol. 39(1), pages 215-227, January.
- Deichmann, Uwe & Meisner, Craig & Murray, Siobhan & Wheeler, David, 2010. "The economics of renewable energy expansion in rural Sub-Saharan Africa," Policy Research Working Paper Series 5193, The World Bank.
- Rosnes, Orvika & Vennemo, Haakon, 2012. "The cost of providing electricity to Africa," Energy Economics, Elsevier, vol. 34(5), pages 1318-1328.
- Peters, Michael & Schmidt, Tobias S. & Wiederkehr, David & Schneider, Malte, 2011. "Shedding light on solar technologies'A techno-economic assessment and its policy implications," Energy Policy, Elsevier, vol. 39(10), pages 6422-6439, October.
- Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Uwe Schneider).
If references are entirely missing, you can add them using this form.