Roof Mounted Off-Grid Solar PV Installations
Roof Mounted Off-Grid Solar PV Installations
Business Model Description
Develop and operate rooftop solar energy systems to provide lighting and energy for other domestic and industrial uses, such as refrigerators, water heaters and other appliances, industrial consumers such as hotels and resorts, and for residential consumers specifically in areas where the national grid does not reach.
Expected Impact
Result in less GHG emmissions, less import-dependency of energy, more reliable energy generation and improved access to electricity.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Zanzibar: Mjini
- Zanzibar: Pemba
Sector Classification
Renewable Resources and Alternative Energy
Development need
Zanzibar imports electricity, fossil fuels, and utilize native fuelwood to meet its energy needs (1). The islands import electricity from Tanzania's mainland, but Zanzibar needs alternate sources, such as renewable energy, due to unreliable energy supply and difficulties with electricity generation, transmission issues, high costs, and frequent outages (3).
Policy priority
The Government prioritizes promoting and developing renewable energy technology and initiatives, while underlining the need for rural electrification (1). By 2032, the Government hopes to provide everyone dependable power (2).
Gender inequalities and marginalization issues
In Zanzibar, only half of the population has access to electricity (5). From 57% of the households who have access to national grid, 33.3% is from rural and 86.6 is from urban areas, which indicates an access gap between regions (14).
Investment opportunities introduction
Zanzibar's distribution of electricity grew by 20% between 2016 and 2020, from 326 GWh to 393 GWh. In the previous five years, the island's electricity demand has grown significantly, averaging about 5% annually (4). Significant opportunities exists in the utilization of renewable energy sources, particularly solar and wind power, to supply this need (1).
Key bottlenecks introduction
Access to energy in Zanzibar is reliant on the mainland, which has an impact on cost and power supply. In addition, adoption of renewable energy alternatives has key challenges such as lack of technical expertise and relatively high investment prices for wind and solar electricity generating (2, 6).
Alternative Energy
Development need
Unreliable and inadequate energy supply, which is import-dependent, results in inhomogeneous distribution of electricity (1). The most of the private sector and industry have diesel generators, including Zanzibar Electricity Cooperation, as a back up to national grid; which results in constant emissions of toxic air contaminants during their utilization (22).
Policy priority
Through its policies and strategic plans, the Government aims to contribute to the sustainable development by independent, reliable and affordable energy for all in the forms of sustainable and renewable energy (6, 3), while encouraging to utilize renewable energy alternatives to decrease import dependence and to meet rising demand for electricity (17).
Gender inequalities and marginalization issues
In Zanzibar, firewood is the first source of energy used for cooking while charcoal follows as second. It is reported that female headed households utilize charcoal more than male headed households (7) which can result in triggering many diseases due to continuous inhalation of charcoal.
Investment opportunities introduction
Zanzibar, to meet the increasing demand and avoid energy disruptions, is in need of developing alternative energy sources for supplementing energy supply. Solar with favorable conditions in the archipelago and the wind with a solid speed of 6.35m/s are creating a favorable environment for investing (4).
Key bottlenecks introduction
The the renewable energy industry in Zanzibar is challanged by slow adoption of alternative energy resources. Main reason behind this slow adoption is insufficient funding for the construction of renewable energy infrastructure (1).
Solar Technology and Project Developers
Pipeline Opportunity
Roof Mounted Off-Grid Solar PV Installations
Develop and operate rooftop solar energy systems to provide lighting and energy for other domestic and industrial uses, such as refrigerators, water heaters and other appliances, industrial consumers such as hotels and resorts, and for residential consumers specifically in areas where the national grid does not reach.
Business Case
Market Size and Environment
5% - 10%
A feasibility Study for the electrification through solar PV power generation and mini-grid distribution in Kokota islet show that demand for off-grid solar system is growing at a CAGR of 8.5 percent (8).
Study shows that it is further forecasted CAGR to grow nearly 125 percent over the coming 10 years, growth being stronger in the first five years (CAGR 13.3%), largely due to high population growth and strong growth in consumption per connection following electrification (8).
Zanzibar Statistical Abstract states that 33,049 new customers were connected to National Grid in 2021 (25).
Indicative Return
10% - 15%
An off grid solar PV plant with an annual generation capacity of 93.1 MWh is estimated to have an economic IRR of 13.5 percent. This returns an Economic Net Present Value (NPV) of approximately USD 40,000 (8).
Investment Timeframe
Medium Term (5–10 years)
According to the feasibility studies conducted in Kokota and Njau islets in Zanzibar, Zanzibar Electricity Cooperation (ZECO) estimates that economic payback period is 10 years (8,9).
In a benchmark project from Uganda, an investment for a USD 250,459 off Feed-in-Tariff (FiT) rooftop solar energy system start yielding positive results from year 7 all through to year 15 (10).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Significant growth on electricity demand in Zanzibar requires increased and independent energy supply and energy efficiency (1).
Energy demand in Zanzibar is met through electricity imported from mainland, fossil fuels and local fuelwood.
The electricity grid in Zanzibar does not reach to all households in Unguja and Pemba. There are huge rural areas without access to the national grid (12).
Gender & Marginalisation
It is reported that electricity connection for male-headed households is higher (56.9%) than female-headed households (50.3%) in Zanzibar which points out to lack of access to electricity by women (16).
Expected Development Outcome
The roof-mounted solar PV installations will strenghten the availability and reliability of electrical power and extend the access to energy to households without access to the national grid.
The roof-mounted solar PV installations will enhance energy security towards possible technical and/or capacity failure from mainland and decrease dependency on imported energy and local fuelwood (12).
The roof-mounted solar PV installations will promote and enable efficient use of energy, protection of the environment and reduction of GHG emissions.
Gender & Marginalisation
Roof-mounted solar PV installations will be utilized for energy-intensive activities like cooking, improving the livelihood of rural women by maintaining familial health and welfare.
Primary SDGs addressed
7.1.1 Proportion of population with access to electricity
7.1.2 Proportion of population with primary reliance on clean fuels and technology
7.2.1 Renewable energy share in the total final energy consumption
The proportion of households connected to electricity was 57.6 percent in 2019/20(14).
N/A
N/A
Recent Zanzibar Development Plan targets to increase electricity supply capacity to 100% in 2025 and increase electricity connectivity from 57% in 2020 to 85% in 2025 (21).
Recent Zanzibar Development Plan's projection is to have 100% of the population enjoy access to electricity within the next 10 years in line with the SDG (21).
Recent Zanzibar Development Plan's projection is to have 100% of the population enjoy access to electricity within the next 10 years in line with the SDG (21).
13.2.2 Total greenhouse gas emissions per year
763 Gg CO2 eq in 2010 (15).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
Gender inequality and/or marginalization
Outcome Risks
If not disposed properly, solar PV panels may create negative impacts on the environment.
Impact Risks
The initial cost of solar PV installation may be too high for the average income of the local community, thus the demand from the underserved households may be restricted (11).
Impact Classification
What
Roof mounted solar PV installations will offer a clean and independent alternative for households, hotels and enterprises, meeting the growing demand and shrink the access to electricity gap.
Risk
Business model is capital intensive, which may lead to high prices for the products and fail to reach to the underserved population who do not have access to electricity.
Contribution
IOA will decrease the national carbon footprint, decreasing the GHG emission as the CO2 level of forestry and energy sectors' will be decreased.
Impact Thesis
Result in less GHG emmissions, less import-dependency of energy, more reliable energy generation and improved access to electricity.
Enabling Environment
Policy Environment
Zanzibar Energy Policy: The Policy aims to contribute to the sustainable development by independent reliable and affordable energy for all and the energy uses by households and institutions shall transform to the forms of sustainable renewable energy (6).
Zanzibar Utilities Regulatory Authority (ZURA) Strategic Plan: ZURA’s aim to improve and promote reliable, sustainable and efficient provision of utility services is underlined as well as its support for renewable energy alternatives to lessen import dependence and to meet rising demands (17).
Zanzibar Trade Policy: It raises the concern on availability of adequate energy for commercial as well as domestic purposes. The policy concludes that a rapid growth of the economy in Zanzibar depends upon energy availability, reliability, and reasonable cost for energy (19).
Zanzibar Electricity Corporation Master Plan: The Master plan encourages off-grid solar home system to rural households where grid extension would prove costly (20).
Financial Environment
Financial incentives: World Bank and Climate Investment Fund has an ongoing project on Energy Transformation in Zanzibar, consists promotion of solar energy and network streghtening, worth of 152 Million USD (13).
Fiscal incentives: General incentives are exemption from payment of import duty, excise duty, VAT and similar taxes on capital good. Strategic investors have more comprehensive benefits which consists long-term exemption from duties and tax, resident permit for the investor and her family etc (4).
Other incentives: 100% foreign ownership, 33 to 99 years of land lease agreement, employment of expatriates in key positions, 100% allowance for R&D activities (4).
Regulatory Environment
Zanzibar Utilities Regulatory Authority Act: The Regulation puts forward the establishment, structure and functions of the Authority (18).
Marketplace Participants
Private Sector
GadgetroniX, NAJ Solar Power Systems Ltd, Baraka Solar Specialist limited, LORENTZ Solar Water Pumps Company, Zanzibar Solar Shop Kikwajuni, Umoja wa Wakulima wa Mbogamboga na Matunda (UWAWIMA).
The Ministry of Land, Housing, Water and Energy, Zanzibar Utilities Regulatory Authority, Zanzibar Electricity Corporation, Zanzibar Environmental Management Authority, Tanzania Electric Supply Company Limited, Zanzibar Business and Property Registration Agency (BPRA).
World Bank.
Non-Profit
Japan International Cooperation Agency (JICA).
Target Locations
Zanzibar: Mjini
Zanzibar: Pemba
References
- (1) Zanzibar Planning Commission. 2020. Zanzibar Development Vision 2050. https://www.planningznz.go.tz/english/Downloads/current/ZDV2050.pdf
- (2) Zanzibar Energy Sector Transformation Project. https://pubdocs.worldbank.org/en/354361581437357722/12164-Project-Concept-Information-CTF-DPSP-3-Tanzania-WB-ZEST.pdf
- (3) Ministry of Water and Energy. Zanzibar Renewable Energy and Energy-Efficiency Programme. https://www.zanzibar-energy.com/about-doem/programs/3.-zanzibar-renewable-energies-and-energy-efficiency-programme/
- (4) Zanzibar Investment Promotion Authority. 2020. Zanzibar Investment Guide. http://www.zipa.go.tz/pdf/guide2020.pdf
- (5) World Bank. 2019. Project Information Document (PID). https://pubdocs.worldbank.org/en/354361581437357722/12164-Project-Concept-Information-CTF-DPSP-3-Tanzania-WB-ZEST.pdf
- (6) Ministry of Water, Construction, Energy and Lands of Zanzibar. 2009. Zanzibar Energy Policy.
- (7) Ministry of Water and Energy, Department of Energy and Minerals. 2021. Energy Sector Database. https://www.zanzibar-energy.com/energy-sector-database/
- (8) Zanzibar Electricity Cooperation (ZECO). 2018. Electrification of Kokota Islet, Zanzibar. Available upon request.
- (9) Zanzibar Electricity Cooperation (ZECO), 2018. Electrification of Njau Islet, Zanzibar. Available upon request.
- (10) Mathew Matimbwi et al, 2020. Tanzania Energy Situation.
- (11) Ministry of Water, Construction, Energy and Lands. 2009. Zanzibar Energy Policy.
- (12) Intec, Suntrace. 2019. Preliminary Feasibility Studies for Wind Parks, Solar Farms and Solar Home Systems
- (13) Climate Investment Fund. 2021. DPSP III: Zanzibar Energy Sector Transformation Project (ZEST). https://www.cif.org/projects/dpsp-iii-zanzibar-energy-sector-transformation-project-zest-0
- (14) Office of the Chief Government Statistician Ministry of Finance and Planning Zanzibar. 2020. 2019/20 Household Budget Survey. https://www.ocgs.go.tz/php/ReportOCGS/HBS%20Main%20Report_final%2031.12.2020%20printing%20(2).pdf
- (15) RGoZ, Global Climate Adaptation Partnership. 2012. Technical Report on Assessing the Benefits of a Lower Carbon Development Pathway for Zanzibar. http://www.economics-of-cc-in-zanzibar.org/images/Zanzibar_LCD_Draft_Final_report_v2.pdf
- (16) Zanzibar Planning Commission. 2020. Annual Sustainable Development Goals (SDGs) Implementation Report, 2019/2020 Zanzibar
- (17) ZURA Strategic Plan 2017-2020.
- (18) Revolutionary Government of Zanzibar. 2013. Zanzibar Utilities Regulatory Authority Act.
- (19) Revolutionary Government of Zanzibar. 2006. Zanzibar Trade Policy.
- (20) ZECO Master Plan. https://www.zeco.co.tz/images/World_Bank_Instruments/ESMF.pdf
- (21) Zanzibar Planning Commission. 2021-2026. Zanzibar Development Plan. https://static1.squarespace.com/static/5a7ca94b268b9686b4dec606/t/63b16deafd28426edc8d2908/1672572399541/PDF+E+-+The+Revolutionary+Government+of+Zanzibar+%28Zanzibar+Planning+Commission%29+-+Zanzibar+Development+Plan+%28ZADEP%29+%282021-2026%29.pdf.
- (22) Niyi Awofeso, American Journal of Respiratory and Critical Care Medicine. 2014. Generator Diesel Exhaust: a Major Hazard to Health and the Environment in Nigeria. https://www.atsjournals.org/doi/abs/10.1164/ajrccm.183.10.1437?role=tab
- (23) Naj Solar Power. 2023. https://naj-solar-power.business.site/
- (24) Afric 2, 2022. The Environment and Sustainable Development in Africa. Available upon request.
- (25) Office of the Chief Government Statistician. 2022. Zanzibar Statistical Abstract, 2021. https://www.ocgs.go.tz/php/ReportOCGS/ZANZIBAR%20STATISTICAL%20ABSTRACT%202021.pdf.