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Off-Grid Solar Energy Market in Africa Growing, Energiebau Says

Energiebau Solarstromsysteme GmbH, a Cologne, Germany-based developer of small-scale solar systems, said the number of installations it is doing in Africa is increasing by about 10 percent a year.

“When we arrived here in 1994, nobody else was here,” Managing Director Michael Schaefer said. “Now there is a market establishing, a lot of competitors are coming.”

The falling price of photovoltaic panels is making solar a more affordable source of power for Africans though the market needs five more years before a local PV panel manufacturing plant is warranted, he said on the phone today from Cologne.

In places like Ghana and Kenya, solar power is now cheaper per kilowatt-hour than a diesel generator, Schaefer said. “There’s a big market for hybrid systems, which is a combination of PV and diesel.”

About 5 percent of the company’s business comes from Africa and is growing, Schaefer said. In 2006, Energiebau founded a subsidiary in Ghana and another in Mali to supply small, off- grid systems to remote areas. It will open another unit in Kenya before the end of the year, he said.

Germany’s Schott Solar AG and SMA Solar Technology AG (S92) are Energiebau’s main equipment suppliers. Lower cost products are sourced from Korean panel-maker Solar Park, he said.

German and other European companies have the strongest presence in Africa at present because Europe is the most experienced in PV, Schaefer said.

‘More Chinese’

“There are very few American and Japanese companies but now more and more Chinese,” he said. “But these Chinese companies have no experience in systems, in installations, design and maintenance. They just produce panels.”

Energiebau has installed more than 100 units in African countries including Tanzania, Kenya, Zambia and Uganda. Its largest project is a 515-kilowatt installation at the headquarters of the United Nations Environment Program in Kenya. It has bid to develop a 2-megawatt on-grid project in Ghana, Schaefer said.

“At the moment we are concentrating on East Africa and West Africa, and the next step could be South Africa,” Schaefer said. Uncertainty in South Africa’s regulatory environment has dissuaded the company from opening a unit there, he said.

To contact the reporter on this story: Lauren van der Westhuizen at at lvanderwesth@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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