UGANDA LIKES OFF-GRID SUN

Uganda: Energy Drives Real Estate Growth
Ricks Kayizzi, 3 June 2009 (The New Vision)

SUMMARY
In Uganda, getting adequate electricity can be a challenge.

The current government is not satisfactorily delivering on promises to bring water, roads and power to housing developments.

Homes built at a distance from the nation’s central power delivery infrastructure are falling in value as the cost of building a line connecting them to the grid goes up.

It reportedly can cost “millions of shillings” to extend transmission a kilometer.

Although Uganda has incipient New Energy capacities in wind, biogas, geothermal, liquid fuels and peat, off-grid solar energy is, under the circumstances, attracting Ugandans’ attention.

click to enlarge

Solar Energy for Africa, a Ugandan solar installer, reportedly sells its smallest home system at $195 (about sh429,000).

Such systems require no transmission connection, little maintenance, can be expanded to meet increased power needs and offer the option of battery storage as a power supply when the Ugandan sun, which is rich in potential, has set or disappeared behind clouds.

click to enlarge

Whatever the initial costs, the systems provide power for 20-to-25 years without a monthly bill or dependence on a central power supply.

PostBank, a Ugandan state financial institution, has a Rural Electrification Initiative that provides solar energy financing packages with a 30% government subsidy and a 36-month payback period for homeowners and real estate developers. Akright Projects used PostBank financing to install a solar energy system for ~300 Kakungulu Satellinte City residents.

The PostBank-subsidized systems range in cost from sh60,000 and sh7 million. For a sh1 million system, Uganda pays sh300,000, the individual pays sh200,000 in cash and sh500,000 is financed by PostBank.

click to enlarge

COMMENTARY
The attraction of distributed generation has always been, and remains, a strength of solar energy. Critics attack it for its high cost but in places where the grid does not go, it is far more appealing than darkness and affordability is a secondary concern.

Hydroelectric power generated from Uganda’s great rivers is the nation's most developed and cheapest New Energy but a homeowner or group of homeowners can hardly undertake the building of a damn (and unless they live on a river would still have to build transmission).

click to enlarge

Community solar installations make purchases more affordable by creating a larger volume purchase, whether it be for a set of rooftop systems or a large, single-site installation. Real estate developers can defray building expenses by beginning a development with the installation of a solar energy system and for which they can recoup the investment by reselling the system to the development’s homeowners.

Programs like the one sponsored by the Ugandan government bring light to darkness in African and developing world rural areas, both literally and metaphorically. The similar work of the Solar Electric Light Fund (SELF) (see SMALL CAN BE BEAUTIFUL...) has won praise the world over. Yet even in what the 19th-Century British foolishly called “darkest Africa” the anti-New Energy propagandists are trying to spread the lie that solar energy is unaffordable. As in other places, the purpose of the propaganda is to defend big money interests.

In Uganda, the builders of big hydroelectric projects and big transmission systems would like to discredit distributed generation so as to add momentum to the urgency of building their large-scale, centralized projects. The truth: There is a need for big systems but there is also a need for power that can be built now, built fast and built affordably for rural peoples.

The Akright Kakungulu Estates. (click to enlarge)

Uganda’s utility-scale power infrastructure has resulted in the highest electricity tariffs in East Africa. Costs for delivering electricity to new housing projects are also prohibitively high. The government claims to be working to bring rates and costs down. In the mean time, however, there are those deriving handsome returns for the system as it is.

That’s why Uganda could use a little daylight on its power establishment and some competition for its power providers.

SELF is also doing its wonderful work in Uganda. (click to enlarge)

QUOTES
- From the Solar Energy for Africa website: “We will provide you with any power you need, at any location. All of our products are supplied and installed with a 12-24 month warranty. The cost of a home solar electric system starts from $195 US dollars.
Anatoli Kamugisha, managing director, Akright Projects: "On top of helping people save on what they spend on energy, they will overcome loadshedding by having a reliable source of power…"
- Samuel Okello, officer, PostBank: "We are targeting everybody, from real estate developers to individuals home-owners in both urban and rural areas. With this subsidy, no one can give an excuse for not accessing power…"
- F.C. Oweyegha-Afunaduula, Lecturer, Makerere University and Secretary, National Association of Professional Environmentalists (NAPE): "They conduct this negative campaign in order to make hydro-power appear cheaper to legitimize the choice of large dams' based electricity in developing countries, especially those endowed with large river water ecosystems…"