13 SEP 2023
How can the Global South turn solar potential into solar power?
Many countries of the Global South are perfectly placed to take advantage of the world’s cheapest energy source – the sun. With COP28 on the horizon, we look at the promise of this cleanest of energy sources, as well as the implementation barriers to be overcome.
Most of the Global South could meet its energy needs with less than 0.1% of its land covered by solar panels. This staggering statistic from Energy Monitor gives us much cause for optimism.
However, it’s not as simple as putting panels on the ground and plugging them into the grid.
While there is enormous potential for solar energy across the Global South, in many countries a lack of funding, infrastructure, economic instability and a range of other factors stifle its growth.
How can the Global South overcome these barriers and capitalize on this abundant resource to power its future?
The current state of solar
Solar energy now offers the cheapest form of electricity the world has ever seen. Its price has plummeted by around 85% over the past decade, making it cheaper than fossil fuels in 60% of countries around the world. At the same time, new innovations have emerged that allow panels to float on water or rise to preserve space for food production.
As a result, solar has become an increasingly viable energy source. According to IEA analyst Heymi Bahar, it “accounts for almost 60% of every power installation that will be built in the coming five years.” Currently, though, solar makes up just 3.6% of the global electricity matrix, so there is a lot to be done to make it the world’s go-to source of power.
Nowhere is this more apparent than in the Global South.
Many developing countries – particularly in the Middle East, Northern and Sub-Saharan Africa – have the perfect geographical conditions to develop strong solar networks.
They receive the highest concentration of solar radiation. They also have access to sunshine consistently throughout the year while other parts of the world experience seasonal shifts. In Ethiopia, for example, covering just 0.005% of its land with solar panels could meet current energy needs.
Equally strong are the incentives to expand solar. Developing countries are bearing the brunt of the climate crisis, disproportionally affected by its most devastating impacts. They are already grappling with rising sea levels, droughts, floods and an array of other extreme weather conditions which are only likely to intensify as the planet warms. Fast-tracking the decarbonization of the global energy system could save countless lives in the long run.
At the same time, 80% of people in the Global South live in countries which import fossil fuels from abroad. This leaves them susceptible to massive fluctuations in the price of oil, natural gas and coal. Solar energy offers an opportunity to release the developing world from its dependence on imported fuel and build up its energy autonomy.
Barriers to the solar transition
If the conditions and incentives are there, what is blocking the expansion of solar energy in the Global South?
While the cost of solar-generated electricity is low, the upfront costs to install it remain high. Few governments – developed or developing – can afford to fund renewable projects on their own, so around 86% of investment worldwide comes from the private sector. To secure the level of finance required for a large-scale solar project, energy companies must demonstrate to investors that the necessary conditions are in place to make it financially viable.
This is where developing countries run into difficulties.
Many are hamstrung by instability. Unstable currencies, political unrest and corruption not only have tangible consequences for citizens, these factors make much of the developing world a ‘no-go zone’ for investors.
Even in more stable regions, developing countries are often hampered by slow-moving regulatory bodies. Others lack the infrastructure to transmit and distribute the electricity efficiently once generated. Some do not have workforces with the technical skills to build key components or carry out the necessary maintenance work.
Under these conditions, getting hold of finance is all but impossible and most solar projects are defeated before they can even begin.
Solutions to scale-up solar
But this status quo is changing rapidly. Solar projects are popping up all over the world and each one that comes online brings positive insights to apply elsewhere.
As the World Bank identifies, the process starts with government leadership and a strong commitment to the clean energy transition.
Governments in the Global South must ‘de-risk’ their economies and create a policy environment in which solar projects can become commercially viable. That could mean stamping out corruption, strengthening their electricity networks or streamlining approvals processes. Once these kinds of conditions are in place, it will be much easier for projects to secure private financing.
The Global South cannot do this alone. It needs far greater financial assistance than is currently available.
Historically, funding has come from the UN, World Bank and regional development banks, as well as international organisations like the Global Infrastructure Hub. But these channels are not equipped for the scale of the challenge we now face.
The International Renewable Energy Association (IRENA) has called for an overhaul of these institutions’ current project allocation processes to deliver funding on a far larger scale. Later this year, it will publish an extensive report alongside Masdar exploring how to make this – and other radical initiatives – possible, with the goal of tripling global renewable capacity by 2030.
Such a seismic shift can only happen with political buy-in from developed nations. Their funding is essential to provide investment funds with the resources they need to develop solar at scale.
That’s why many in the Global South will be looking towards COP28 with eager anticipation.
At COP26, a number of wealthy nations pledged to double or triple their climate finance contributions, finally committing to $100 billion in climate finance in June 2023. Yet their contributions still fall far short of what the developing world has requested.
The upcoming summit in Dubai is another vital opportunity to get around the negotiating table and take this commitment to the next level.
With time running out, it’s an opportunity the world cannot afford to squander.