Off-grid solar is a market that has been largely overlooked by the PV industry. With the outlook for grid-connected projects continuing to be gloomy, is it time for a reappraisal, especially for a low-cost CPV concept?
Dr Richard Komp’s Northern Honduras account reads like a typical backpacker’s tale up until the bit about when he brings over 500 Evergreen Solar cells into the country. By the part when he gets a local glass dealer to cut panes for 32-watt modules, it is clear this is no average travel story.
Komp, director of Skyheat Associates in Maine, USA, visited Nicaragua recently to help the Garifonos people of the Cuero y Salado Reserve develop their own solar panels. “I design the PV modules to use as much local material as possible,” he writes in his online report.
If it all seems a distant cry from the high-end-manufacturing-led world of utility-scale PV, though, beware: with established solar markets in freefall, there may be more to the off-grid opportunity than meets the eye.
“Relative to the scale of the grid-connected market it is pretty miniscule,” says Shayle Kann, managing director of GTM Research’s solar practice. “And it’s also tough to track.”
But in places such as India, he adds: “There is obviously a big opportunity. PV, especially with costs having fallen as much as they have, can be quite competitive.
“And ‘competitive’ is almost the wrong way to look at it, because often times it is a choice between solar and nothing, or solar and a diesel generator which is really expensive.”
As a consequence, even though the market is small this is one area where demand for PV potentially remains strong. And that is leading major manufacturers, which had previously ignored off-grid installations, to take another look.
“We have been hearing that most major module suppliers have never paid much attention to the off-grid market,” Kann says. “There have been a few companies that have taken the off-grid market as a niche and done really well there.
“But because there has been such a substantial over-supply over the past couple of years we have heard about some companies that really weren’t trying to go after the off-grid market starting to do so.”
That ultimately is a good thing for the off-grid market because it means there will be more competition amongst suppliers there, he notes.
These suppliers will probably have to go through something of a learning curve, however, since many the world’s potentially major off-grid markets bear little resemblance to the places where utility-scale PV has done well so far, such as Europe and the US.
The US has historically had about 30 MW to 40 MW of off-grid PV installation a year, principally for applications such as highway lighting. “But that I think is not a particularly strong growth market,” Kann states.
Instead, the places where off-grid could be big business are countries such as Nigeria, where Dr Shawn Buckley, founder of Focused Sun, is hoping to sell a low-cost CPV concept. “We thought their interest was in utility-scale solar farms,” he says. “But these guys are politicians.
“And votes come from the villages. If they put in a big solar utility installation they’re helping city folks. Nigeria has 14,000 clinics and those clinics need sterilisation, they need electricity for refrigeration. And there’s other uses for electricity in the village.”
Buckley says villages can use the heat generated by the CPV cooling system to boil water and render it drinkable. Furthermore, another attraction of the system for off-grid applications in developing countries is that most of the assembly can be carried out locally.
“It’s pretty much the same as furniture manufacturing,” he comments. “They like the idea that they can do local manufacturing. We’ve said we will drop-ship a container with all the ingredients for a complete system.”
Source of insecurity
The container is a valuable part of the overall package because it can be locked up to prevent theft, Buckley notes, thereby underscoring one of the risks that off-grid ventures face.
And theft is not the only source of insecurity. Says Buckley: “One of our guys is doing a Chinese installation in Mali for the president and he was deposed yesterday.”
However, if business is risky for PV companies selling off-grid projects, it is also a pretty hazardous undertaking for the people who are buying.
Simon Bransfield-Garth, chief executive of off-grid solar developer Eight19, says: “While solar panels are very effective in the market, the challenge has been that people who earn a few dollars a day simply don’t have the US$50-$60 to buy a high-quality solar product.”
Eight19 is commercialising PV on a pay-as-you go basis, similar to the model used for mobile phone top-up cards, which should make it easier for people to buy off-grid solar power; and should give them peace of mind that the panels will be fixed if something goes wrong.
That is still a bit precarious for all involved. But right now, off-grid is probably one of the safest bets the PV industry has got.