Off-Grid Solar PV Markets and Diesel Generation Substitution Markets in Africa

Hudson is a private equity fund that invests in clean energy companies around the world.  As a part of Hudson’s ongoing evaluation of global clean energy markets, the firm’s Research Department is undertaking an evaluation of solar energy markets in Africa.  Specifically, the firm is evaluating the potential for diesel generation to supplemented or substituted with solar PV technology.

Africa’s off-grid energy generation markets are dominated by diesel generators. At a diesel price of $1 per liter, the fuel cost alone of diesel electricity generation is $0.40/kWh for a relatively efficient generator. The cost of solar PV technology has declined to the point where PV systems are cost competitive with diesel generated electricity in many applications. The objective of this project is to evaluate the addressable market for PV-diesel substitution in 5 countries in Africa.