“To improve is to change, to be perfect is to change often” Winston Churchill
The world is constantly changing. I would assume this is an effort to achieve perfection in the various endeavours we are all engaged in. IT, crop production, banking, and energy too.
In a bit to obtain eco-friendly energy sources, nations are moving into renewable energy sources, and solar energy is at the forefront. Nations in the Middle East and North Africa are reaping from this, and I believe we as a nation can learn from them.
So, what can we learn from these nations?
1. Local firms can do it too
Funny enough, the companies taking the lead in these solar parks are local firms such as Abu Dhabi’s Masdar and they are relatively new in this field of renewable solar energy.
The fact that it is not large European, Chinese or American companies taking the lead shows it’s pretty easy and the entry costs are not limited to only powerful financial players.
Another advantage local firms have the local advantage. They have on the ground experience developing energy and electricity projects. They also understand the regulations, the local power grid and the incentive structure. These give them an edge over most international companies.
2. Requires ample space and sunlight
Of note, is the fact that most of these projects are being implemented in North Africa and the Middle East. This is due to their preexisting conditions of ample sunlight (desert climatic conditions) and ample cheap land. These conditions make investing in solar energy quite ideal since the investment costs are dipping and have been doing so for the past several years.
These are all conditions which are within our country and can take advantage off.
People are becoming increasingly aware of the effects of non-renewable energy sources. This coupled with the fact that most oil reserves are being depleted, makes it ideal to invest in solar energy.
The market for solar energy is increasing leading to the increasing demand for large solar power plants.
4. Government’s role
Companies in these nations have submitted record-breaking bids. Saudi Arabia’s ACWA submitted a bit of 5.85 cents per kilowatt hour which were later broken by Abdul Latif Jameel which submitted a bid of 2.99 cents per kilowatt hour.
Note: These low prices will not set new standard low prices because the economic conditions are unique in the Middle East.
Most of these companies are able to do this because their governments have made it possible to access low-cost capital from local banks and sovereign funds. This shows that the government plays a pivotal role in the development and growth of solar energy.
5. Opportune time to invest
The cost of providing utility scale power has plummeted. A good case study is the US whose cost fell by about 60% between the period 2017 to 2015. This makes it the best time to invest with the increasing market and the plummeting investment costs.
By being late, most companies are benefiting from the low-cost entry into this market.
6. Straight forward technology.
There are some few differences in technology, but it is quite easy to grasp. Despite this, the tech is pretty much similar to conventional power plants. Therefore no huge expertise is required. That is why giant retailers like eurosolar global have had such a huge success all around the nation.
Most of these ventures in the Middle East are joint ventures with foreign firms which have more experience in the field of solar development. These ventures happen to be a win-win situation for all the parties involved
In the Middle East ACWA works with Spanish engineering and construction company. TSK works with solar modules made by American company first solar.
In these collaborations, both companies gain. The local companies develop their capacity in the field of solar development by learning from the wealth of this established companies. On the other hand, the foreign companies increase their odds of penetrating the market.
Collaborations are also helpful since there is a transfer of knowledge. This knowledge transfer is vital for nations that are the fossil fuel dependent to diversify into other energy sources so as to help in their economic growth.
So, as discussed, I consider it wise to conclude that now is the time that we as a nation invest in solar energy. The costs have never been lower, and it is a renewable energy source. Beyond that, it creates thousands of jobs for the youths in our nation.
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