Off-grid: Lack of mass production as an obstacle

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Over 120 customers and suppliers from more than 20 countries came to Memmingen in Bavaria to exchange information at Phaesun on the trends and challenges of the off-grid market for solar electricity.

At the same time, both the prospects and obstacles became clear. In fact the market for rural electrification is enormously large – yet according to information provided by the International Energy Agency, a total of 1.5 billion people currently have no reliable access to the electricity power supply and in many cases the off-grid supply of solar electricity and other renewable energies is more economical than a grid connection, emphasized Alexandra Reis of the Alliance for Rural Electrification (ARE) in Brussels.

Thus developing the grid in Senegal cost US$15,960 per kilometer and US$19,070 in Mali – three to four times more expensive than under normal conditions. On the other hand the share of off-grid photovoltaic technology thus far is only in the range of a single-digit percent (while the construction of additional installations worldwide in 2010 amounted to 370 megawatts, according to Solarbuzz).

And in many developing countries, high import duties, high interest on loans, corruption and a lack of know-how are an impediment to the development of an off-grid market for solar electricity.

In addition, it was visible at the workshop that subsidized aid projects in the retail area – for example, the World Bank – sullied the image of photovoltaic technology because poor quality was often installed at low prices. "That is why we rely both on quality and on infrastructure projects and industrial projects in the public sector," stressed Tobias Zwirner, managing director at Phaesun.

Although off-grid is currently profiting from declining module prices on the market in general, Zwirner warned against paying attention only to the price and not taking quality into consideration. Huguette Aust, sales director for PV at Steca expressed similar thoughts.

According to information provided by Helmut Zeltner, Phaesun shareholder and managing director of Franken Solar, the system prices for off-grid photovoltaic technology are currently at least 30 to 40 percent higher than those for grid-connected systems. An important reason for this is the lack of mass production of generally less efficient and smaller off-grid modules.

Thus even among manufacturers that do business in the off-grid segment, such as ET Solar and SolarWorld, the share of off-grid modules in their total production makes up only two to three percent. And then there are the relatively high prices for batteries and accumulator systems. "But even here there is movement as a result of increasing competition," noted Zeltner.

In any case, Phaesun profits by specializing in off-grid applications. Thus, for example, the wholesaler and systems supplier took over the off-grid team from BP Solar in France last year and increased its workforce of 23 last year to its current 40 employees.

"Apart from our core business of rural electrification we are also increasingly focusing on the off-grid market in recreational areas," pointed out managing director Zwirner. And since this year Phaesun now offers its own – German language – product catalog on campers/camping and maritime activities.