Solar Energy in Sub‐Saharan Africa: The Challenges and Opportunities of Technological Leapfrogging

• Published date: 01 January 2015
• Date: 01 January 2015
• Author: Joseph Amankwah‐Amoah
• DOI: http://doi.org/10.1002/tie.21677

15

FEATURE ARTICLE

Published online in Wiley Online Library (wileyonlinelibrary.com)

© 2014 Wiley Periodicals, Inc. • DOI: 10.1002/tie.21677

Correspondence to: Joseph Amankwah-Amoah, Bristol University, School of Economics, Finance & Management, Social Sciences Complex, 8 Woodland Road,

Clifton, Bristol, BS8 1TN, United Kingdom, 0044 (0) 117 3317936 (phone), Joseph.amankwah-amoah@bristol.ac.uk

Solar Energy i n

Sub-Saharan Africa:

The Challenges

and Opportunities

of Technological

Leapfrogging

For decades, Africa was generally perceived as the dumping ground for obsolete technologies. In

recent years, technological leapfrogging, which is associated with the newly industrialized econo-

mies in Asia, has transpired in some key industries. In this article, we present the solar photovoltaic

industry as one such industry and an integrated model of scaling up solar technologies. We identi ed

 ve unique models aimed at scaling up solar energy in Africa: state-led, nongovernmental organiza-

tion and other agency–led, emerging-market multinational enterprises–led, Avon, and pay-as-you-go

models. Our analysis focused on four countries in particular (Ghana, Nigeria, South Africa, and Kenya)

and Africa in general. Despite the promising opportunities of this industry, a number of factors suchas

high up-front capital costs and limited end-user  nancing schemes have limited the technological pro-

cess. We conclude by outlining the implications of the  ndings for theory and practice. ©2014Wiley

Periodicals, Inc.

By

Joseph Amankwah-Amoah

16

FEATURE ARTICLE

Thunderbird International Business Review Vol. 57, No. 1 January/February 2015 DOI: 10.1002/tie

PV industry, like many others in Africa, is characterized

as underserved, underexploited, or underutilized with

potential for growth (Amankwah-Amoah, 2014). Against

this backdrop, we seek to address three fundamental

questions that have remained unanswered: How has the

solar industry evolved in Africa? What are governments’

policies in this area and models in scaling up solar power?

More importantly, what are the major obstacles to scal-

ing up solar power in Africa? We contend that the fall-

ing prices and technological breakthroughs of solar PV

energy provide an enticing opportunity not only for rural

areas, but also for cities to circumvent the conventional

path of energy development and move directly to solar

energy.

To streamline our analysis, we focus on four sub-

Saharan African countries (i.e., Ghana, Nigeria, South

Africa, and Kenya), which have seen remarkable eco-

nomic growth in the past decade in Africa (for details on

all countries’ gross domestic product growth rates, see

“A Hopeful Continent,” 2013). These four countries are

regarded as emerging economies in Africa. We also shed

light on those key questions by drawing heavily on illustra-

tive cases and policies from these countries to drive the

analysis. We contribute to the literature by advancing an

integrated model of the solar scaling-up process, which

includes the state-led, nongovernmental organizations

(NGO) and aid agency–led, emerging-market multina-

tional enterprise (EMMNE)–led, Avon, and pay-as-you-go

solar models.

The rest of the article is organized along the follow-

ing lines. Next, we review the literature on technological

Introduction

“The sun is hugely powerful—it delivers more energy in

an hour than humankind uses in a year and unlike fossil

fuels it will never run out.”

“Thou Orb Aloft Full-Dazzling” (2011, p. 20)

I

n the first decade of the twenty-first century, solar

energy emerged from the shadows and the gloomy

picture of Africa’s geological environment to become

not only a major source of power but also a platform

on which new businesses and opportunities flourish

(Bradford, 2006; Kulichenko & Wirth, 2011; “Renewable

Energy: Sun-Burned,” 2011; World Bank, 2008). Globally,

there are around 1.4 billion people without access to grid

electricity but who enjoy sunlight most days of the year.

Harnessing solar power is fundamental not only to pov-

erty alleviation but also to economic development. Solar

photovoltaic (PV) energy provides people disconnected

from the global economy and without access to power

grids the opportunity to light their homes and businesses

in places where grid power can either be extremely

expensive or unreliable (International Trade Forum

[ITF], 2011; “Lighting the Way,” 2012). This is particu-

larly important given that around 600 million people in

Africa, which is around 70% of the population, remain

unconnected to the energy grid and rely on expensive

and inefficient sources of energy such as candles and

kerosene to power their businesses and homes (ITF,

2011; Karekezi & Kithyoma, 2002). Current projections

indicate that unless the trend is reversed, more than 700

million Africans could be living without electricity by

2030 (ITF, 2011).

In the past few years, the price of solar PV panels

has declined by as much as 50% largely due to soaring

production in China and significant technological break-

throughs (Birnbaum & Faiola, 2012; KPMG, 2012). The

cost of solar PV systems has fallen to the point that it has

become a lower-cost alternative to other sources of energy

such as nuclear (Blackburn & Cunningham, 2010; Pow-

ers, 2010; REN21, 2012). Many in African rural areas get

power from diesel generators at prices of roughly $1 per

kilowatt-hour (kWh), relative to below 20 cents per kWh

for solar PV power (Chipman, 2011). In addition, the

quality of solar products such as solar lamps now outper-

forms the commonly used kerosene lanterns across much

of the developing world (Chipman, 2011).

Despite these developments, our understanding of

why the solar revolution has failed to take off in a sig-

nificant way in Africa has been overlooked. The solar

In the past few years, the

price of solar PV panels

has declined by as much as

50% largely due to soaring

production in China and

significant technological

breakthroughs.