The argument by the Organisation for Economic Cooperation and Development (OECD) that tightening South Africa’s wealth tax regime would rebalance ... generational inequality has a fundamental flaw: it targets a “flighty” base, says an expert from the African Tax Institute.
The target is to enter the first new countries at the end of 2022 or the start of 2023, Raghavan says in Nairobi. His model is to sell solar equipment imported from India to individuals. The cost of the packages ranges from $200 to $600 and is paid for by Kenyan savings and credit cooperatives (SACCOs), meaning there is little credit risk for CosmoSol.
- Raghavan hopes to agree similar partnerships with co-operative banks in other east African countries.
Solar-and-storage grids have the potential to transform energy provision in sub-Saharan Africa. Consumers spend almost $20bn a year on fuel for back-up generators in sub-Saharan Africa excluding South Africa, despite the fact that such generators provide only 7% of total electricity supply, according to Benjamin Attia, an analyst at Wood Mackenzie. And his research shows about half of African businesses rely on back-up diesel generators if the grid goes out, despite high and unpredictable costs.
READ MORE Africa's Great Green Opportunity
There is a special opportunity, Wood Mackenzie says, in the Democratic Republic of Congo (DRC), where the national grid is virtually non-existent. Building a bottom-up, distributed grid, rather than adding distributed energy resources to an existing centralised grid, will mean savings for customers in terms of capital and operating expenditure, the research argues.
- Raghavan aims to enter the DRC and South Sudan in 2024 or 2025.
- CosmoSol is also developing a solar-power solution for an industrial client in Namibia, backed by a Scandinavian green-development fund.
- The solution will supply a factory with solar power, and Raghavan hopes it will lead to more industrial customers.
- The company, which is currently debt free, will need new funding for its expansion. Raghavan says he is open to new investors, as well as proposals from potential local distribution partners.
The ambition is to turn CosmoSol into a major solar power player supplying individuals, companies and governments in Africa. The company’s equipment can be used in combination with a national grid or independently from it. Wood Mackenzie says that solar energy costs are 25% to 40% below commercial grid tariffs in markets such as Kenya, South Africa and Nigeria. Raghavan says that his company can provide solar power that is cheaper than that from national grids anywhere on the continent.
The way to drive solar power forward in Africa, Raghavan argues, is to allow individuals and businesses to sell the surplus solar power that they generate via national grids. That means grids should charge for net, rather than absolute, consumption, he says. “I urge all African governments to bring in net metering systems.”
- Net metering does not yet exist for political reasons, but has transformational potential in stimulating job creation and foreign direct investment, Raghavan says.
A rethink of national grid charges could help to maximise the potential of solar power.
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