Best Practices for Photovoltaic Household Electrification Programs

132 Pages·2000·6.81 MB·English

by  World Bank Group

d
e
z
ori AVYSt1 996
h
ut WORLD BANK TECHNICAL PAPER NUMBER 324
A
e ASIA TECHNICAL DEPARTMENT SERIES
r
u
s
o
cl
s
Di
c Best Practices for Photovoltaic Household
bli
u
P Electrification Programs
d
e Lessons from Experiences in Selected Countries
z
ri
o
h
ut
A
e
r Anil Cabraal, Mac Cosgrove-Davies, and Loretta Schaeffer
u
s
o
cl
s
Di
c
bli
u
P
T
d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
d
e I .. . r
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
pp~-
RECENT WORLD BANK TECHNICAL PAPERS
No. 245 Klein, ExternalD ebtM anagement:A n Introduction
No. 246 Plusquellec, Burt, and Wolter,M odern WaterC ontroli n Irrigation:C onceptsI, ssues,a nd Applications
No. 247 Ameur, AgriculturalE xtension:A Step beyondt he Next Step
No. 248 Malhotra, Koenig, and Sinsukprasert, A Survey of Asia's EnergyP rices
No. 249 Le Moigne, Easter, Ochs, and Giltner, WaterP olicya nd WaterM arkets:S electedP apersa nd Proceedingsfromth e World
Bank'sA nnual Irrigationa nd DrainageS eminar,A nnapolis,M aryland, Decembe8r -10, 1992
No. 250 Rangeley,T hiam, Andersen, and Lyle, InternationalR iver Basin Organizationsi n Sub-SaharanA frica
No. 251 Sharma, Rietbergen, Heimo, and Patel, A Strategyfor the ForestS ector in Sub-SaharanA frica
No. 252 The World Bank/FAO/UNIDO/Industry Fertilizer Working Group, Worlda nd RegionalS upply and Demand
BalancesforN itrogen,P hosphatea, nd Potash,1 992/93-1998/99
No. 253 Jensen and Malter, ProtectedA griculture:A GlobalR eview
No. 254 Frischtak, GovernanceC apacitya nd EconomicR eformi n DevelopingC ountries
No. 255 Mohan, editor, Bibliographyo f PublicationsT: echnicaDl epartment,A frica Region,J uly 1987 to April 1994
No. 256 Campbell, Designa nd Operationo f SmallholderIr rigationi n South Asia
No. 258 De Geyndt, Managingt he Quality of HealthC arei n DevelopingC ountries
No. 259 Chaudry, Reid, and Malik, editors, Civil ServiceR eformi n LatinA mericaa nd the CaribbeanP: roceedingos f a Conference
No. 260 Humphrey, Payment Systems:P rinciplesP, ractice,a nd Improvements
No. 261 Lynch,P rovisionfo r Childrenw ith SpecialE ducationaNl eedsi n the Asia Region
No. 262 Lee and Bobadilla, HealthS tatisticsf or the Americas
No. 263 Le Moigne, Subramanian, Xie, and Giltner, editors, A Guidet o the Formulationo f WaterR esourcesS trategy
No. 264 Miller and Jones, Organica nd Compost-BaseGd rowingM ediafor TreeS eedlingN urseries
No. 265 Viswanath, BuildingP artnershipsforP overtyR eduction:T he ParticipatoryP rojectP lanningA pproacho f the Women's
EnterpriseM anagementT rainingO utreachP rogram( WEMTOP)
No. 266 Hill and Bender, Developingth e RegulatoryE nvironmentforC ompetitiveA griculturalM arkets
No. 267 Valdes and Schaeffer, Surveillanceo f AgriculturalP ricesa nd Trade:A Handbookfort he DominicanR epublic
No. 268 Valdes and Schaeffer, Surveillance of Agricultural Prices and Trade:A Handbookfor Colombia
No. 269 Scheierling, OvercomingA griculturalP ollutiono f Water:T he Challengeo f IntegratingA griculturala nd
EnvironmentalP oliciesi n the EuropeanU nion
No. 270 Banerjee,R ehabilitationo f DegradedF orestsi n Asia
No. 271 Ahmed, TechnologicaDl evelopmenta nd PollutionA batement:A Study of How EnterprisesA re FindingA lternativest o
Chlorofluorocarbons
No. 272 Greaney and Kellaghan, Equity Issues in PublicE xaminationsin DevelopingC ountries
No. 273 Grimshaw and Helfer, editors, VetiverG rassfor Soila nd WaterC onservationL, and Rehabilitationa, nd Embankment
StabilizationA: Collectiono f Papersa nd NewslettersC ompiledb y the VetiverN etwork
No. 274 Govindaraj, Murray, and Chellaraj, HealthE xpendituresi n LatinA merica
No. 275 Heggie, Managementa nd Financingo f Roads:A n Agendafor Reform
No. 276 Johnson, Quality ReviewS chemesforA uditors:T heir PotentialforS ub-SaharanA frica
No. 277 Convery, Applying EnvironmentalE conomicsin Africa
No. 278 Wijetillekea nd Karunaratne, Air Quality Management:C onsiderationfso r DevelopingC ountries
No. 279 Anderson and Ahmed, The Casefor SolarE nergyI nvestments
No. 280 Rowat, Malik, and Dakolias,J udicialR eformi n Latin Americaa nd tle CaribbeanP: roceedingos f a World Bank Conference
No. 281 Shen and Contreras-Hermosilla, Environmentala nd EconomicI ssuesi n Forestry:S electedC ase Studies
in Asia
No. 282 Kim and Benton, Cost-BenefiAt nalysis of the OnchocerciasiCs ontrolP rogram( OCP)
No. 283 Jacobsen, Scobie and Duncan, StatutoryI nterventioni n AgriculturalM arketing:A New ZealandP erspective
(List continues on the inside back cover)
WORLD BANKT ECHNICALP APERN UMBER3 24
ASIA TECHNICALD EPARTMENTS ERIES
Best Practices for Photovoltaic Household
Electrification Programs
Lessons from Experiences in Selected Countries
Anil Cabraal, Mac Cosgrove-Davies, and Loretta Schaeffer
The World Bank
Washington, D.C.
Copyright () 1996
The International Bank for Reconstruction
and Development/THE WORLD BANK
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First printing August 1996
Technical Papers are published to communicate the results of the Bank's work to the development com-
munity with the least possible delay. The typescript of this paper therefore has not been prepared in accor-
dance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibili-
ty for errors. Some sources cited in this paper may be informal documents that are not readily available.
The findings, interpretations, and conclusions expressed in this paper are entirely those of the
author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations,
or to members of its Board of Executive Directors or the countries they represent. The World Bank does
not guarantee the accuracy of the data included in this publication and accepts no responsibility whatso-
ever for any consequence of their use. The boundaries, colors, denominations, and other information
shown on any map in this volume do not imply on the part of the World Bank Group any judgment on
the legal status of any territory or the endorsement or acceptance of such boundaries.
The material in this publication is copyrighted. Requests for permission to reproduce portions of it
should be sent to the Office of the Publisher at the address shown in the copyright notice above. The
World Bank encourages dissemination of its work and will normally give permission promptly and,
when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy por-
tions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222
Rosewood Drive, Danvers, Massachusetts 01923, U.S.A.
The complete backlist of publications from the World Bank is shown in the annual Index of
Publications, which contains an alphabetical title list (with full ordering information) and indexes of sub-
jects, authors, and countries and regions. The latest edition is available free of charge from the
Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433,
U.S.A., or from Publications, The World Bank, 66, avenue d'lena, 75116 Paris, France.
ISSN: 0253-7494
Cover photo: Solar home systems in Sukatani, West Java, Indonesia.
Credit: Courtesy of PT. Sudimara Energi Surya.
All three authors work in the Asia Alternative Energy Unit in the Asia Technical Department of the
World Bank. Anil Cabraal and Malcolm Cosgrove-Davies are renewable energy specialists, and Loretta
Schaeffer is the unit's program manager.
Library of Congress Cataloging-in-Publication Data
Cabraal, Anil, 1948-
Best practices for photovoltaic household electrification programs
lessons from experiences in selected countries / Anil Cabraal, Mac
Cosgrove-Davies, and Loretta Schaeffer.
p. cm. - (World Bank technical paper; ISSN: 0253-7494; no.
324. Asia Technical Department series)
Includes bibliographical references.
ISBN 0-8213-3728-9
1. Building-integrated photovoltaic systems. 2. Dwellings-Power
supply-Equipment and supplies. I. Cosgrove-Davies, Mac, 1957-
II. Schaeffer, Loretta, 1936- . III. Title. IV. Series: World
Bank technical paper; v. no. 324. V. Series: World Bank technical
paper. Asia Technical Department series.
TK1087.C33 1996
33.79'32--dc2O 96-32250
CIP
CONTENTS
Foreword ...................................................... vii
Acknowledgments ...................................................... ix
Executive Summary ...................................................... xi
Abbreviations and Acronyms ...................................................... xvii
1. INTRODUCTION ...................................................... 1
2. THE PLACE FOR PHOTOVOLTAICS ...................................................... 7
The Solar Home System. .................................................... 7
The Cost of Solar Home Systems ..................................................... 8
The Solar Home System Niche ..................................................... 13
Consumer Perceptions ...................................................... 14
3. THE ECONOMICS OF PV HOUSEHOLD ELECTRIFICATION ..................... 17
Solar Home Systems vs. Kerosene and Automotive Batteries .............................. 18
Solar Home Systems vs. Grid-Based Power Supply ............................................. 19
Load Growth Impact ..................................................... 22
4. BARRIERS TO AFFORDABILITY ..................................................... 25
First Cost Barriers ..................................................... 25
High Transaction Costs ...................................................... 30
Market Distortions ...................................................... 31
5. INSTITUTIONAL MODELS. ..................................................... 33
Energy Service Company (ESCO). ..................................................... 35
Leasing Arrangements ...................................................... 38
Consumer Financing ..................................................... 39
Cash Sales ..................................................... 40
The Role of Governments and Donor Agencies .................................................... 41
Role of The World Bank and Other Donors ...................................................... 45
6. ATTAINING FINANCIAL SUSTAINABILITY .................................................... 49
Terms and Conditions ...................................................... 50
Pricing Strategies ...................................................... 50
Grants and Subsidies. ..................................................... 53
Enforcing Repayments ..................................................... 54
Financing Battery Replacements. .................................................... 55
iii
7. TECHNICAL REQUIREMENTS. ...................................................... 57
Hardware Design ........................................................ 57
Standards and Specifications. ...................................................... 63
Other Technical Considerations. ...................................................... 64
Quality Control ....................................................... 65
Maintenance Services. ...................................................... 66
Educating Users. ...................................................... 68
8. BEST PRACTICES: CONCLUSIONS AND RECOMMENDATIONS. ............ 71
Overcome the First Cost Barrier ....................................................... 71
Establish Sustainable Infrastructure ....................................................... 72
Quality Products and Services. ...................................................... 74
Government Support. ....................................................... 74
Donor Support. ...................................................... 75
ANNEXES
1. ASTAE CASE STUDIES IN PV HOUSEHOLD ELECTRIFICATION. ........... 77
Indonesia
Sri Lanka
The Philippines
The Dominican Republic
Conclusions
2. ECONOMIC AND FINANCIAL COMPARISONS OF RURAL ENERGY
ALTERNATIVES .................................................. 91
Energy Requirements
Criteria for Village Selection
Rural Energy Alternatives
Least-Cost Comparison (Economic Basis)
Least-Cost Comparison (Financial Basis)
Case Studies: Productive Loads and Load Growth
Conclusions
REFERENCES ....................................................... 101
iv
TABLES
2-1 Solar Home System Prices in Selected Countries ...................................................... 9
2-2 Variations in PV Costs by Components in Selected Countries ................................. 11
3-1 Levelized Monthly Economic Costs of Kerosene/Battery and PV for Rural
Households in Indonesia (in 1993 dollars) .................................................... 18
3-2 Load Growth: Incremental Economic Costs for PV- and Grid-Based Systems in
Indonesia (in 1993 dollars) .................................. ............................ 22
5-1 PV Program Structures ............................................................... 34
6-1 Financing Characteristics of PV System Delivery Models ........................................ 49
6-2 Terms for Solar Home System Financing in Selected Countfies .............................. 51
7-1 Suggested Spare Parts List for a Cooperative in Indonesia ...................................... 64
BOXES
1-1 Government Initiatives in Indonesia ................................................................ 2
1-2 The Solar Home System Market in Sri Lanka ........................................................... 3
1-3 Bilaterally-AssistedP rograms in the Philippines. ....................................................... 4
1-4 The NGO Experience in the Dominican Republic. ..................................................... 5
2-1 Cost Reduction Opportunities for Solar Home Systems. ......................................... 12
4-1 Increasing Credit Availabilityf or PV Systems. ........................................................ 27
4-2 Idaho Power Company and Southern California Edison Programs for Solar
Photovoltaic Service .............................................................. 29
5-1 Examples of Solar Home System Projects Implemented by ESCO .......................... 37
5-2 Mexico's PV Rural Electrification Program ............................................................ 43
5-3 World Bank/GEF-Assisted Indonesia Solar Home Systems Project ......................... 46
5-4 World Bank/GEF-Assisted Sri Lanka Energy Services Delivery Project .................. 47
FIGURES
2-1 Typical System Components. ............................................................. 8
2-2 Some Reasons for Unit Cost Variations of Solar Home Systems. ............................ 10
3-1 Indonesia: Break-Even Thresholds for PV- and Grid-Based Electricity Supply,
by Village Location .............................................................. 21
4-1 Demand for PV Systems in Rural India, by Type of Financing ................................ 26
4-2 The Impact of Duties and Taxes on the Initial Cost of a Solar Home System
in Indonesia, Kenya, and Sri Lanka (in 1993 dollars) .................................... 30
4-3 Comparison of the Economic and Financial Costs of PV- and Grid-Based Service
in Indonesia (in 1993 dollars) ............................................................... 32
v

FOREWORD
Governments across the developing world have made rural electrification a high
priority over the last two decades. Yet despite the rapid expansion of the power sector
during this period, by 1990, only about 44 percent of the more than 3.3 billion people
living in rural areas had access to grid-based electricity. Given the constraints of high
capital costs and maintenance, there is little chance of achieving universal rural
electrification through conventional grid services.
Off-grid PV systems can generate sufficient electricity to provide households
with lighting and power for small appliances. PV modules can also be combined to meet
larger energy requirements for other household services or for productive uses in
activities such as agricultural processing or cottage industries. However, formidable
barriers, including the high initial cost of PV systems, keep this technically and
economically viable technology beyond the reach of most rural families.
Case studies of recent experiences in Indonesia, Sri Lanka, the Philippines and the
Dominican Republic have identified key ingredients for successful residential PV
programs and ways to overcome financial and institutional barriers to the use of PV
systems. These case studies were commissioned by ASTAE, with the cooperation of the
German BMZ/GTZ. In addition to the studies, ASTAE has consulted with World Bank
staff and PV professionals worldwide on experiences with PV systems in developing
countries. This process has reinforced the main conclusions of this Report: that PV
systems are a viable complement to grid-based energy service delivery and that within the
rural electrification framework such systems can find a cost-effective niche and
sustainable market. It has also yielded insights on best practices to improve prospects for
successful project design and implementation.
ASTAE was created by the World Bank, with support from the Netherlands
Ministry of Development Cooperation, the US Department of Energy, and other donors.
The Unit's mandate is to stimulate environmentally sustainable and commercially viable
renewable energy and demand-side management investments in Asia. I share, as do
ASTAE donors, the belief that PV systems can provide least-cost light and power service
to small, dispersed residential communities. We hope that this Report will catalyze
further action among public and private planners and developers to improve the quality of
life for rural families.
Harold W. Messenger
Director
Asia Technical Department
vii