Mapping the Cost of Electricity from Grid-connected and Off-grid PV Systems in Africa

Abstract

We present the calculation of  Levelized Cost of Energy (LCOE) for PV systems in Africa and the Middle East. The calculations are based on estimates of the PV energy productivity from satellite data combined with models for the performance of both grid-connected and off-grid PV systems. The PV productivity figures can then be combined with scenarios for the cost of PV system installations in terms of initial investment, operation and maintenance, as well as discount rate for the LCOE calculation. The results show that using realistic estimates of installation and maintenance costs, and 5% p.a. discount rate, the LCOE of PV electricity is below 7 c€/kWh in most of Northern and Southern Africa, rising to 9-10c€ in the cloudy tropical belt near the Equator. If the discount rate is 10%, the LCOE is 9-10c€/kWh in most of Africa, rising to 13-14c€ in tropical West Africa. This shows clearly the importance of a good financing framework. Calculations of the performance of PV minigrid systems shows that the electricity cost from these systems is higher, at 18-25 c€, but it is still competitive with many other options for rural electrification.