Project Development, Solar, Wind Power

Solar Energy Powers Rural Development

Almost two billion people in developing countries — one third of the world’s population — have no access to electricity. Fuelwood, agricultural residues, human power and draught animals continue to be the primary energy resources for millions of rural families. But solar electric systems could change this.

Finding alternative sources of energy that are both economical and environmentally friendly is crucial for increasing agricultural productivity and improving the quality of life in rural communities. A new FAO report, “Solar photovoltaics for sustainable agriculture and rural development”, suggests that photovoltaic solar energy systems may be part of the solution. Finding the right niche The publication makes clear that photovoltaic solar systems are still relatively costly and therefore are not “a panacea for solving all rural poverty problems”. However, they do offer tremendous potential for filling certain extremely important ‘niche applications’. “Solar energy systems, together with wind energy and other renewable energy applications, are the only technically viable solution to deliver the energy required by isolated rural communities,” says Gustavo Best, FAO Senior Energy Coordinatorin a radio interview. “Small amounts of energy can make a tremendous difference, making it possible to improve rural lives, enhance agricultural productivity and create new opportunities to earn income.” Solar power is currently used primarily for household lighting and radio and television. By extending the hours of available light, it creates extra time for productive activities. This has been especially beneficial to women and children, who spend more time indoors. The extra light allows women to perform activities such as sewing, basket-making and handicrafts and lets children continue studying after dark. But solar energy’s potential is relatively untapped in increasing agricultural productivity and rural development in general. With a supportive financial and institutional environment, solar energy systems could significantly improve health care and education; water supply forconsumption, irrigation and livestock; food preparation and refrigeration; veterinary services; communication; and tourism. It also holds promise for productive off-farm activities (restaurants, cinemas, technical and artisinal workshops, etc.) by powering tools, kitchen equipment, phones and other appliances. Barriers to success Compared with energy from fossil fuels, solar energy systems are flexible, low maintenance and environmentally benign, but they have their limitations. “Most disadvantaged subsistence farmers will generally not be able to afford solar systems” the report states. Furthermore, batteries to store solar electricity can be costly and problematic: A backup system is required for night-time and days with little sunlight, and disposal of the batteries poses an environmental threat. More problematic are the institutional barriers: high start-up costs coupled with lack of financing mechanisms lead to low volumes of sales, and the relatively long chain from the producer of the solar panels to the end user results in high transaction costs. These are key reasons for the lack of infrastructure and political commitment. This vicious circle has tended to make solar energy systems unattractive both to the rural user and to many investors. Potential of solar energy applications But there is hope for overcoming the financial and institutional barriers to solar energy success. In Kenya, despite punishing tax and tariff policies that favour conventional energy resources such as kerosene and other fossil fuels, between 50 000 and 70 000 solar home systems have been installed. This demonstrates how the private sector can develop a solid market by reaching those rural customers left unserved by a monopolistic power company. And in Indonesia, the Government and institutional donor money support a thriving market in solar home energy systems. To fully exploit the potential of solar energy will require several institutional changes in the energy sector: * Rural and agricultural development banks must make solar energy systems eligible for loans. * The systems must be made more attractive to private investors. * Above all, the energy, agriculture, education and health sectors must work together to promote solar technology, improve maintenance and servicing infrastructure and create sustainable markets for the creation, use and funding of solar energy systems. Considerable progress has been made over the past 20 years in delivering electrical power to the people. In 1970, 23 percent of the rural population had access to electricity; in 1990, the proportion had almost doubled, to 44 percent. Much of this has been achieved by extending the coverage of national electrical grids. However, connecting the rural communities to these grids is not profitable, requires heavy government subsidies and does not always bring the projected benefits. The report notes that in general, “the success of rural electrification follows and supports socioeconomic development rather than the other way around”. Today, solar energy systems are being integrated into large electrification programmes in rural areas around the world, where “their smaller, modular character makes them particularly suitable for remote, dispersed populations with low and scattered energy demands”.