Study of Major Solar Energy Mini-grid Initiatives in Zambia

Solar mini-grids hold the promise of providing sustainable electricity to the 600 million people without access to electricity mostly across rural Africa. However, solar mini-grids are in their infancy and face a number of sustainability challenges. This paper provides a critical study of the financial, technical, environmental, and social sustainability of five major solar mini-grids in Zambia, viz., 48 kW Magodi mini-grid in Lundazi, 52 kW Katamanda mini-grid in Chipangali, 28 kW Chitandika mini-grid in Chipangali, 24 kW Muhanya mini-grid in Sinda (all in the Eastern Province of Zambia) and 32 kW Chibwika mini-grid in Mwinilunga in the North Western Province of Zambia. None of the five solar mini-grids is fully sustainable financially and technically. Economic tariffs that can sustain both capital and operational expense are mostly unaffordable to rural people due to their low-income levels. Challenges of lack of technical support, poor operations, and maintenance are also major causes of unsustainability. All solar mini-grids are running on an ad-hoc and/or pilot basis without a well-thought-out plan of operations and business model. The specific challenges facing the Zambian mini-grids include (i) incorrect sizing of the mini-grids during the planning stage, (ii) use of substandard components and/or lack of technical support, (iii) inefficient operation of the mini-grid by a government agency or the community without adequate technical support, (iv) wastage of subsidies being provided to the private sector without aligning it with diverse interests and expectations, and (v) ad-hoc and inappropriately structured tariff plans. For both technical and financial efficiency, the involvement of the private sector is cardinal. A well-thought-out public-private partnership model for the construction, operation, and maintenance of solar mini-grids is needed. In place of an up-front subsidy as being given currently, smart subsidies which should align the interests and expectations of the government, the private sector, and the clients should be developed.