Renewables with energy storage can help build low carbon energy networks in the developing world – but the twin technologies still face competition from natural gas while they gradually mature, according to an electric power systems maker and integrator.
In terms of opportunity, Africa may be richer in promise than many realise. A recent US$25 million funding round for Off Grid Electric, a another US-headquartered company, which is developing solar micro grids in Tanzania and Rwanda, was led by a contribution from DBL Partners.
‘Social impact’ investment firm DBL’s founder, Nancy Pfund, along with her co-founder Ihra Ehrenpreis was among early backers of SolarCity and Tesla among others. Pfund recently toldPV Tech Storage that the link with decarbonisation and with lifting rural populations out of poverty made it a win-win investment choice for the VC funders, which only invests in programmes that have a positive social effect as well as generating healthy returns. These have included other recent investments in energy storage and related areas, Pfund explained in an interview with PV Tech Storage.
Pfund emphasised that the investment in Off Grid Electric and in Africa was not a handout or aid.
“We are totally non-concessionary. We are a top tier financial company and that’s our brand, it’s our mission, it’s in our DNA from Day One. So it’s a huge market and it has a lot of attributes that are very, very fundamental to the success of new entrants. So if we didn’t think we were going to make money on this we wouldn’t have made the investment.”
The numbers stacked up economically as well as in terms of the material impact DBL’s money could have, Pfund said. Falling costs of solar, wider recognition of battery-based energy storage technologies and innovative financing models analogous to the “no-money-down” revolution enjoyed in US rooftop solar leasing had made it possible.
“When you see that cost is coming in line with need and accessibility, that’s a very magical formula,” Pfund said.
“That hasn’t been totally possible until recently when panel costs came down, storage, lithium ion is now accessible, and you also have a business model innovation with the leasing model being applied to this continent. That was what broke open the solar market in the US – if you look at the growth numbers, once people didn’t have to buy a system and pay upfront and instead pay less monthly than their electricity bill, that’s when the market began to scale significantly.”
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