Power Grid


AFRICA'S SOLAR MARKET: RAPID GROWTH, CHINESE DOMINANCE, AND U.S. SETBACKS.

Irene Jerry
5 months, 1 week

Africa's solar market holds immense potential, evidenced by the recent significant growth in its solar industry. Despite accounting for just 1% of the world's solar capacity, Africa boasts 60% of the best solar resources globally. This vast, untapped potential has attracted the attention of Chinese companies looking to harness these natural resources. China's strategic control over global solar supply chains, combined with the low cost of its products, positions it favorably to dominate Africa's clean energy sector, a feat that Western competitors find challenging to match.

China's ambition to dominate the African solar market is supported by its large-scale production capabilities and the resulting economies of scale. The country's growth in solar module manufacturing capacity in 2022 and 2023 led to a 40% price drop last year, further boosting the attractiveness of its solar products. This price advantage is a significant barrier for U.S. technologies trying to enter Africa's solar market, prompting Washington to consider new tariffs on solar cells from Southeast Asian countries to level the playing field.

In contrast to many Western countries where solar power is a secondary option in the energy transition, for many electricity-scarce countries in the Global South, solar power is the first step toward gaining reliable electricity access. Nearly 43% of Africa's population, or 600 million people, lack reliable electricity. Recent plans by the World Bank and the African Development Bank aim to provide electricity to at least 300 million people in Africa by 2030, primarily through distributed renewable energy systems. If successful, Africa could lead the new distributed energy model, bypassing the need for extensive government power grid expansions.

Global efforts to advance renewable energy projects in Africa create favorable conditions for China to strengthen its presence in the continent's emerging solar market. Beijing's role might extend beyond merely supplying equipment to developing and operating solar projects, leveraging its expertise in renewable technology, batteries, and mobile payments. Solar energy could become a cornerstone of the Belt and Road Initiative in Africa, establishing integrated industrial ecosystems from mining operations to industrial parks. While the U.S. faces challenges in entering Africa's solar market, China continues to shape development in this promising region.


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