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Productive Use of Solar PV in Rural Malawi : Feasibility Studies

Eales, Aran and Buckland, Hannah and Frame, Damien and Unyolo, Berias and Gondwe, Chawezi and Kaunda, Morton (2017) Productive Use of Solar PV in Rural Malawi : Feasibility Studies. [Report]

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Productive Uses of Energy are agricultural, commercial and industrial activities involving energy services as a direct input to the production of goods or provision of services. Productive uses include home businesses, non-monetary income, excludes social infrastructure and cuts across different sectors, energy sources, and types of enterprises. This study focusses on the economic feasibility of a range of businesses in Malawi powered by solar PV. The overall objective is to identify a set of businesses that have the potential to be progressed to pilot projects. Surveys were carried out on existing electricity using businesses in Dedza, Malawi to determine CAPEX, OPEX and monthly income figures for agricultural, sales and services, and repair and manufacture businesses. Solar PV systems were designed to supply the business loads and then priced using component costs obtained from suppliers. 10 year cash flow forecasts were conducted for 3 business scenarios (strong, stable and weak). Using the modelled profit and loss, the viability of the different businesses powered by solar PV was evaluated. As shown in the table below, the study has found that irrigation and small sales and services (specifically barber shop and phone charging) businesses powered by standalone PV systems look likely to succeed, with most paying back initial investment under 3 years over all scenarios. Maize milling and tailoring businesses give paybacks of 5 and 8 years for strong and stable scenarios respectively, indicating grant funding would be required to contribute to CAPEX to be affordable for most entrepreneurs in Malawi. A metal workshop business doesn’t recover initial investment within 10 years for any of the scenarios modelled. The results indicate solar PV has potential to reduce poverty through income generation in Malawi. Recommendations have been given for implementing pilot projects based on the feasibility studies, along with suggestions for future research to inform wider scale dissemination of Solar PV productive use initiatives.