Global warming impact to our quality and cost of living is large and very catastrophic. Energy consumers in Ghana are well aware of the increasing energy costs to heat, cool and illuminate their buildings with fossil fuel energy sources: coal, oil and gas formed from the organic remains of prehistoric plants and animals. In addition, the effect of the use of fossil fuels on global warming is increasingly being recognized.

A change in energy production methods, in which renewable energy sources (wind; solar; biomas; biodiesiel, geothermal etc) play a decisive role, is therefore absolutely necessary. These sources of energy are not depleted over time in comparison to fossil fuels. The amount of sun energy for instance striking our world in Ghana in one day is sufficient to supply our energy demands for a year. We will not run out of this source in the foreseeable future.

The Ghanaian renewable energy market is expected to remain ‘energy-driven’ for the foreseeable future as opposed to the ‘environment-driven’ Western markets. Renewable energy technologies (RETs) have held promise for Ghana’s development for many years.  However, efforts to make this promise a reality have not generally been successful.  In times of energy crises during drought and a drastic dry up of  the Volta Dam, or when world oil prices increase sharply–there is sudden interest in RETs as a possible alternative to the dependence on the national grid.  Big ideas die-out  when the rains come and the crisis are resolved.  A typical case is the recent year long power rationing and the big policy talk on renewables that followed it and never got anywhere.

Major barriers to harnessing renewable energy in Ghana have been cost, political will and convenience. In some cases the high taxes have been blamed, and policy measures are required to reduce the import duties of raw materials and equipment.  In others, it has been argued that local manufacturing of example solar electric systems will reduce cost and boost the industry.  High cost is the reason most often cited for the low penetration of solar electric systems.  A major opportunity therefore lies in the financing of the industry.  Two forms of financing are notable: financing for end-users as a way of making the systems more affordable, and financing for retailers and service providers to boost their activities.

Current Opportunities for Market Growth

Inspite of the aforementioned barriers to market growth, there are some opportunities in the system where business enterpreneurs can capitalize on to increase market penetration: national electrification scheme for rural electrication, ongoing power reforms, establishment of the energy and national electrification funds as well as improved information and technical know-how of local technicians on RETs deployment.

In the wake of an energy shortage in 1998 the Ghanaian government removed import duties and sales tax on “solar generation systems” as a measure to increase imports of solar electric systems and encourage the use of solar energy as an alternative source of energy.  At the same time, the duties on diesel generators were also reduced.  Improved tax policy for financing alternative energy equipments: With the introduction of the Value-Added Tax at the end of 1998, solar electric systems remained exempt from both import duties and VAT.

The average lowest retail cost of large photovoltaic arrays has declined from $7.50 to $4.00 per watt between 1990 and 2005: this price/watt reduction trend has continued since then.  PV materials have also been improving in recent years. The most recent materials approach is to process discrete cells on silicon wafers cut from multi crystalline ribbons, which form thin films. This approach is the least expensive of known technologies with efficiencies currently at 20%. This growth rate offers excellent opportunities for new companies to enter this market. Other thin film techniques offer even more hope for a drastic reduction in system price.

The Ministry of Mines and Energy in Ghana estimates that the grid reaches only about 30% of the country’s population.  The national grid will not serve many of these communities in the near future.  In addition to the off-grid households, many institutions such as schools, hospitals, and government offices are located in off-grid areas.  Finally, many applications in off-grid communities can be served by solar and other renewable energy sources.  These include water pumping, learning centers, and streetlights.