Overview

Experience across the developing world confirms the technical viability of stand alone systems in a variety of settings. Under the right conditions, stand alone renewable energy systems – including solar home systems, pico hydro systems or micro wind systems - can offer lighting and other services to large numbers of households that are poorly served by existing energy sources or have no service at all.     Early stand alone system programs in the 1970s and 1980s often failed due to unreliable technical performance; poor system design; lack of ongoing qualified technical support; implementing agency shortcomings; poor attention to cost recovery; and, unrealized user expectations and consequent dissatisfaction. More recent programs have benefited from the lessons learned. As a result, stand alone systems have now have been successfully introduced in over a dozen World Bank and GEF supported operations in the world.   In these programs there are four main reasons for including stand alone renewable energy initiatives in rural electrification programs:

Least Cost Economic Solution

Environmentally Sustainable

Contributing to Millennium Development Goals and World Bank renewable energy targets

Ability to bring service faster than waiting for grid supply

Least Cost Economic Solution

In rural electrifications programs, there is an important economic niche for stand alone systems. Stand alone systems are an effective complement to grid-based power, which is often too costly for sparsely settled and remote areas. For such rural conditions, fuel-independent, modular stand alone systems can offer the most economical means to provide lighting and power for small appliances. Individual systems can be cost effective compared to grid supply or isolated diesel systems at low levels of electricity use. In Vietnam an economic cost-effectiveness analyses show that at a grid electricity consumption level of fifteen kWh per month per household, solar home systems are the lowest economic cost option if grid extension cost is $400/household or more.    If average consumption level is thirty kWh per month per household, then solar home systems should be used only if grid cost is greater than about $600/connection. Similarly if consumption is sixty kWh per month per household, grid supply is preferred to SHS, if grid connection cost is less than $1200/connection. The cost effectiveness boundary is depicted in Exhibit 1. In other cases the stand alone system is an upgrade from lead acid batteries, dry cell batteries, kerosene or LPG used by the rural clients. Using these energy sources usually cost between US$2 to US$15 per month for the end user. A stand alone system offered with a finance arrangement could compete with these costs while providing a superior service.   Where perennial water resources or wind resources are available nearby, pico hydro or micro wind units have even lower economic life cycle cost compared to solar home systems. Several economic models and case studies have been included in the Project Tools Module (for example see Economic Analysis of PV systems in the Philippines). An overview of costs and a comparison of the cost for different countries can be found here.   For more see Rationale module

  Environmentally Sustainable

Stand alone systems are safer and more convenient than kerosene lanterns and dry cell or automotive batteries which are widely used in developing countries for lighting and to power small appliances. Stand alone systems are especially attractive to women and children, who rely heavily on household energy services for a range of activities. As a renewable energy source, these systems are also environmentally friendly and reduce reliance on often expensive imported fuels.

  Contributing to millennium development and World Bank renewable energy goals

Programs supporting stand alone renewable energy systems contribute to several international treaties and goals. Stand alone renewable energy programs contribute directly to goal 7 of the Millennium Development Goals (MDGs) to ensure environmental sustainability. For five of the other MDGs it fulfils a necessary prerequisite to achieved these. Like the other renewable energy programs, stand alone programs contribute to the growth goals set by the World Bank to increase its renewable energy and energy efficiency lending port-folio with 20% per year between 2004 and 2009.   The carbon abated by using stand alone systems supports the global combat to reduce overall greenhouse gases.

  Ability to bring service faster than waiting for the grid

Stand alone renewable energy systems can provide modern energy services to end users in the rural and remote areas in a shorter timeframe compared with grid extension. Even in countries with a fast expanding grid network constraining factors like financing available to the utility; availability of human resources; and accessibility of territory to allow network installation will leave significant portions of the population without access to modern energy services. Stand alone systems which are provided through companies other than the national utility and are in part financed by private sources can provide modern energy services years before an electric network is considered.

 Exhibit 1

  Cost comparison

See table below for a sample of PV system retail prices in selected countries.  For a more comprehensive information on Photovoltaics Prices and Costs by components, see www.solarbuzz.com.

Comparisons for PV System Retail Prices ($US)

Sources: Anil Cabraal 2002 and China REDP PV retail price survey 2004