The projected 42 percent growth in African solar installations this year, as reported by the Global Solar Council, signals a significant shift in the continent’s energy landscape, with notable implications for both the agriculture sector and investors.
For the agriculture sector, the surge in solar power presents a multitude of benefits. Many African farmers rely on diesel generators for irrigation and other power needs, which can be costly and environmentally damaging. The increased availability of solar power can provide a cleaner, more sustainable, and potentially more economical energy source. This is particularly crucial in regions like southern Africa, where recurrent blackouts and drought-induced hydropower shortages have disrupted agricultural activities. By adopting solar power, farmers can ensure a more stable and reliable energy supply, enhancing productivity and resilience.
The rapid growth of solar installations in countries like Ghana and Zambia also opens up opportunities for agrivoltaics, a practice that combines solar power generation with agricultural production. This approach can optimize land use, improve crop yields through shade and moisture retention, and generate additional income for farmers. As solar capacity more than doubles across Africa by 2028, as projected, the agriculture sector stands to gain significantly from this renewable energy transition.
From an investment perspective, the African solar market presents both opportunities and challenges. The high projected growth rates and the continent’s abundant solar resources make it an attractive prospect for investors. However, the steep capital costs and financing hurdles pose significant barriers. High interest rates, currency risks, and lack of guarantees are cited by Léo Echard of the Global Solar Council as key factors hindering project financing. Investors will need to navigate these challenges carefully, potentially through innovative financing models, risk mitigation strategies, and public-private partnerships.
The rapid growth in West Africa, particularly in Ghana, and the doubling of solar capacity in Zambia highlight the diverse investment opportunities across the continent. Investors should consider the unique market dynamics and regulatory environments of each country, as well as the potential for long-term returns in a region with substantial solar resources and growing energy demand.
The report’s warning about the potential slowdown in solar buildout due to high capital costs underscores the need for policy interventions and support from development partners. Reducing the cost of capital, as suggested by Echard, could unlock Africa’s potential as one of the fastest-growing solar markets globally. This would not only benefit the energy sector but also catalyze growth in interconnected sectors like agriculture, creating a virtuous cycle of economic development and environmental sustainability.
