The Tanzanian Market for Rural Lighting Technologies
Lighting Rural Tanzania Competition 2010
Presented by Jeff Felten, Camco TZ
8 April 2010
Problem:
• 90% of Tanzanian’s are
without electricity and
the opportunities and
quality of life that
electricity provides;
• That figure rises too
approximately 98% in
rural areas, roughly 32
million people.
Rural electrification from the TANESCO national grid is unlikely.
The investment costs are high, and the activity is not profitable at
the current prices charged to consumers (roughly $0.10 per kwh).
The government of Tanzania is promoting private
sector, renewable energy approaches too rural
electrification.
Approaches involve mini-grids and the development
of solar energy off-grid, or specifically the
development of the market for photovoltaic and rural
lighting technologies (RLTs).
Electrification rates around the country
A typical Tanzanian Solar Home System (SHS)
A 50Wp solar PV system,
like the one in the diagram
here, consists of a solar
module, a charge controller,
and a battery bank. It would
also most likely include an
AC/DC inverter (not shown).
About 5,000 such systems
were sold in Tanzania in 2009
at an average price of $600,
generating $3 million.
Typical Institutional Systems
•
•
•
•
•
•
•
For schools, dispensaries, offices,
etc.;
From 300Wp to over 1kWp;
For lighting, computers, fans,
refrigerators (for vaccines), etc;
Frequently donor funded without
plans for maintenance and
replacement of batteries;
Great potential to upscale numbers
of institutional systems with REF
funding;
Today about 50% of the PV market
is SHS and 50% is institutional
systems;
Picture at left is TRA office in
Kilwa.
Some of the small-scale RLTs on the
Tanzanian market
• New LED technology has
brought down prices and
improved the quality of solar
lanterns;
• D-Light dominates this new
LED-based market in Tanzania;
• Sollatek’s Glowstar is the old
man (and most expensive);
• Phillips is coming with Dutchfunded project;
• Prices range from Tsh 20,000 to
100,000
The Solar PV Sub-Sector in Tanzania:
• Approximately ten product suppliers (importers) almost all based in Dar
es Salaam;
• About 150 dealers/retailers out in the regions and districts, and an even
greater number of solar technicians;
• Relatively high prices due to small sales volumes and limited
competition in the districts;
• Approximately 3.1MW installed nationwide, most systems being the
property of schools, health facilities or large companies (railroad and
telecommunications);
• A growing market for household systems (roughly 50% of the total
market);
• Annual market surpassed 100kWp for the first time in 2005, and
doubled to 205kWp in 2006, 350kWp in 2007 and over 500kWp last
year 2009.
• A dynamic solar industry association (Tanzanian Solar Energy
Association, TASEA);
• No system to enforce product quality standards.
Solar Systems Versus Solar Lanterns
•The top of the pyramid (in blue)
represents the households that can afford
to purchase SHS, given their income and
the cost;
•The second level of the pyramid (in
green) represents those households who
cannot afford SHS but can afford solar
lanterns for lighting (and potentially cell
phone charging);
•The volume of the pyramid in green is far
greater than the volume in blue, meaning
promoting the less-expensive solar
lanterns – with new LED technology – in
addition to solar home systems allows
greater numbers of households, businesses
and institutions access to modern energy.
Market Segments for Rural Lighting Technologies
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•
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•
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Households
Schools
Health facilities
Small businesses
Social community centres
Households
•80% of Tanzanians live in rural
areas, 2% with TANESCO gridconnected power;
•5.85 million non-electrified
households;
•Though national PCI is low, there
are many successful farmers in
coffee, tea, cashews, tobacco,
cotton, beekeeping and livestock;
•Over 100,000 rural civil servants,
with monthly salaries but no power;
•Some regions – such as Shinyanga
– have thousands of successful
artisanal miners with good income.
Schools
• 17,000 non-electrified schools;
• In modern times, secondary
schools cannot provide
adequate education without
computers and internet
access;
• Lighting in boarding schools
allows kids to study at night.
Studies have shown that
children in schools with solar
lighting perform better in
exams when compared to
students in schools without
power;
• Singida undertaking mission to
solarize all rural secondary
schools.
Health Facilities
• 5,000 non-electrified health
facilities;
• Power needed for lighting,
ventilation (fans),
refrigeration (for vaccines)
and other medical
equipment;
• Systems typically range
between 300 and 500Wp;
• The donor-funded system
at right – in Zanzibar – is
excessively large and failed
due to a lack of
maintenance.
Small Rural Businesses
91,000 rural small businesses in a wide
range of sectors:
• Retail and wholesale shops;
• Bakeries, butcheries, mills and other
agro-processing;
• Artisans (like plumbers, carpenters,
electricians, tailors and hairdressers);
• Bars, restaurants and hotels;
• Private schools and private health
centers;
• Transportation and fueling stations;
• Construction and brick making;
• Charcoal and timber;
• Small-scale financial institutions;
• Etc, etc, etc.
Solar systems can power small
appliances and extend productive
working hours.
Non-Commercial Establishments
• 10,000 non-electrified noncommercial establishments
(churches, mosques and
community centres);
• Use power for lighting,
communications and
entertainment;
• Typical system might be four
80Wp panels with four 40Ah
batteries, charge controller and
DC/AC inverter;
• Market segment not served by
typical PV private actors, but by
faith-based NGOs.
Solar PV System Market Potential in Tanzania
Market Segment & Assumption
Potential (MW)
I f 5 % of 5 .8 5 million hous eholds ins tall 5 0 Wp s olar hous ehold
s ys tems
1 4 .6
I f 2 0 % of 1 7 ,0 0 0 non-elec trified s c hools and c olleges ins tall 3 0 0 Wp
s ys tems
1 .0 2
I f 3 0 % of nearly 5 ,0 0 0 non- elec trified health fac ilities ins tall 3 0 0 Wp
s ys tems
0 .4 4
I f 2 0 % of 9 1 ,0 0 0 non-elec trified s mall/medium bus ines s es ins tall
2 0 0 Wp s ys tems
3 .6 4
I f 1 0 % of 1 0 ,0 0 0 non-elec trified non- c ommerc ial es tablis hments
(c hurc hes , mos ques , s oc ial c enters ) ins tall 3 2 0 Wp s ys tems
0 .3 2
Total Nat ional Market
20.02
So what does this mean in
financial terms?
At current prices of approximately $12 per watt,
20.02MWof solar systems would earn $240
million for those companies participating!
Rural Lighting Technology Market Potential in Tanzania
Marget Segment & Assumption
If 5% of 5.85 million households purchase four
RLTs
If 20% of 17,000 non-electrified schools and
colleges purchase ten RLTs
If 30% of nearly 5,000 non-electrified health
facilities purchase five RLTs
If 20% of 91,000 non electrified small/medium
businesses purchase five RLTs
If 10% of 10,000 non-electrified non-commercial
establishments (churches, mosques, social
centres) purchase five RLTs
Total National Market
Potential (units)
1,170,000
34,000
7,500
91,000
5,000
1,307,500
So what does this mean in
financial terms?
At current average prices of approximately $30
per RLT, the sale of 1,307,500 RLTs would
generate $39,255,000 for those companies
participating!
Solar Electric Systems + RLTs
$240 million
+ $40 million
= $280 million
The End
Thanks for your attention