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Do poor countries like Ghana really need to spend valuable Subsidy on monster Solar Panel Farms

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Solar Panel Farms in Ghana

It has been reported that a UK solar developer Blue Energy has got approval to build a giant 155 MW solar panel plant in Ghana. This solar farm will be the biggest solar installation in Africa and one of the biggest in the world. The company has already got the required approvals of land, subsidy etc. and is set to close financing from a UK based asset management firm in the near future. While the mainstream media outlets with their shallow reporting are all going ga-ga over renewable energy development helping reduce global warming and the scale of the plant, the question nobody is asking whether Ghana is making the appropriate and optimum use of subsidy with this plant.

Poor countries have limited resources and they need to spend every dollar with care. India too has gone in for subsidizing expensive large ground mounted solar plants under its JNNSM federal subsidy scheme. However, these solar farms are probably not the best use of money. First of all, some of these feed in tariffs are only benefiting large industrial groups and financial firms without helping consumers. Most of the solar booms in Europe have brought profits only to big companies and investors. They create problems in power evacuation and also hog up a lot of land. Ghana might be better off giving the feed in tariff subsidy to roof mounted small distributed solar power systems than giving massive subsidies to one developer.

Another question that has not been asked is whether this giant project was awarded after a tender or given away without competition. How did a small UK solar developer win such a huge project is the first question comes to mind. Were global solar installers and developers like Sunpower, SunEdision, Juwi and others given a chance to bid on this project?

Solar Plant in Ghana

The Nzema project, based in Ghana, will be able to provide electricity to more than 100,000 homes. Construction work on the $400m (£248m) plant is due to start within 12 months.

The developers say that they are optimistic that finance for the project will be confirmed within six months. The initiative is being developed by Blue Energy, a UK-based renewable energy investment company.

Dozens of solar projects have been announced across Africa in recent years but few have been on this ambitious scale says industry analyst Ash Sharma at IMS Research. He says the 155 megawatt plant will increase Ghana’s generating capacity by 6%.

“It is the biggest single project that’s going ahead at the moment,” he said. “It is not the biggest in the world, but if it goes ahead it will be the biggest in Africa.”

He says that a key element in helping the project go ahead has been Ghana’s renewable energy law under which the plant has been awarded a feed-in tariff for 20 years. These are premium prices, guaranteed for the working life of the site. Project director Douglas Coleman, from Mere Power Nzema Ltd. who will build the plant, said that it was “fully cooked” in planning terms. “The project has land, it has planning consent, it has a generating licence, and it has received a feed-in tariff,” he said, “it is the right plant in the right place at the right time.” He was confident that the finance needed to build the plant could be raised in the next six months.

What Indian Solar Energy needs – Focus on Small Distributed Rooftop and Off Grid Solar

Solar Energy incentives in most of the developed solar markets in Europe have clearly shifted their preference to distributed small rooftop solar installations on residences. This is because it reduces the need for expensive power generation infrastructure, improves reliability and puts money in the hands of the common citizens. Spain, Germany and Italy which are the 3 biggest markets in the world have done this. India however has not paid any focus to rooftop solar installations except for Delhi.

Electricity in India is not only expensive but also highly unreliable and of low quality. Low voltages and blackouts of 10 hours are not uncommon. Having a reliable home based source of power would be attractive to most people in India even at higher costs (note electricity tariffs have been outgrowing inflation). It would also lead to reduced losses in the power transmission which is the highest in the world at around 30%. The advantages of promoting residential solar is much more however the policymakers have not given enough thought with half of the subsidies going to Solar Thermal Technology which is fast losing out to Solar PV technology. India’s solar policy makes it clear that the decision makers do not have enough knowledge about the developments in this fast paced solar energy sector to make the optimum decisions.

Advantages of Solar Farms over Rooftop solar Installations

1) Lower Cost and  Scale – The greater scale of these plants allows lower installations compared to smaller installations. The costs  are reduced in permitting, maintenance as well.

2) Use of Disturbed Land – Solar Farms can be built on disturbed land like in Germany where they have been built on former airbases.

3)Utility Friendly – Large Solar Farms are controlled by utilities or IPPs while rooftop solar is generally in the ownership of residential owners or commercial owners. This results in less push back from utilities which generally control transmission and allow easier acceptance of solar energy.

Disadvantages of Solar Farms over Rooftop solar Installations

1) Long Delays in Permitting, Environment Clearance, Land Siting – Large Solar Farms have to go through a myriad of regulations and clearances. There have also been instances of lawsuits against solar thermal and solar PV plants in California by wildlife and environmental groups as well as local Indian tribes.

2) Electricity Transmission Costs – Grid Connection leads to additional costs for solar farms while rooftop solar can use existing transmission infrastructure.

3) Less Grid Stability – A Large Part of Distributed Solar is consumed locally while Farms supply 100% to the grid. That makes managing the grid difficult when solar penetration increases.

Also Read on GWI:

Solar Panels in India

Solar Panel Manufacturers – Guide to the Biggest and Best


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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