Uganda drops PV FIT program


Very quietly, the Ugandan Government removed support for PV power last November, when it published the guidelines for the second phase of its Renewable Energy FIT (REFIT) Program. ??The secretariat of Uganda's Electricity Regulatory Authority (ERA) confirmed to pv magazine that the Phase 2 REFIT and guidelines have been revised to, among other things, exclude photovoltaic technology from the fixed price REFIT. There is, however, a proposal to tender it out, with a maximum price cap.

"This recommendation arises out of the observation that there has been a progressive drop in solar power pricing on the world market. The tendering modalities are under development by ERA," explained the secretariat.??

However, ERA told pv magazine, "Uganda still does support electricity generation from solar PV through receipt and processing of unsolicited bids. The unsolicited bids for solar PV development may be considered if the price (tariff) is not above the weighted average cost of electricity generation in Uganda. Any price above this would require a subsidy – a matter that is not within the control of the regulator." ??

Uganda's REFIT program

Uganda's first attempt at a REFIT program (REFIT Phase 1) was launched in 2007, and covered only bagasse cogeneration and hydropower. Due to its limited success, the REFIT was reviewed in 2010 and a new tariff was announced in 2011 (REFIT Phase 2), which included PV. This was, however, reviewed again in 2012, leading to the removal of PV from the program.

In addition to tariff differentiation, Uganda’s REFIT system also prioritizes certain technologies in the application process. Annual caps for newly installed capacity are further applied to all technologies.

GET FIT program also excludes PV

In order to enhance and stimulate the REFIT program, various international development partners have helped devise, and have committed to support, the implementation of the Global Energy Transfer Feed in Tariff (GET FIT) pilot subsidy program in Uganda.

If successful, GET FIT might also be implemented in other countries with similar energy challenges. The program's overall objective is to assist East African nations in pursuing a climate resilient low-carbon development path resulting in growth, poverty reduction and climate change mitigation. Uganda's GET FIT secretariat is based on ERA premises. ??

Through the roll-out of phase one of the program, a portfolio of up to 15 small-scale renewable energy generation projects, promoted by private developers with a total installed capacity of about 125 MW and approximately 780 GWh annual production, will be fast-tracked. The aim is to transform Uganda's energy mix within the next 3 to 5 years. ??

In doing so, the program will facilitate, or at least significantly improve, access to energy for at least 150,000 additional households (approximately 0.9 million people), especially in rural areas, due to added capacity and strengthening of the rural grids.

It will also increase Uganda’s energy production by close to 20% – up from approximately 600 MW power capacity currently installed – thus making a contribution to tackling an anticipated supply shortage that is likely to emerge in late 2014 or early 2015.

??The objectives of GET FIT will be accomplished through, among other things, a so-called FIT Premium Payment Mechanism. This is a top-up on the current levels of REFIT to qualifying projects that will have gone through a transparent selection process administered by Government of Uganda in collaboration with the development partners outside the REFIT policy framework.

The first round of request for proposals for the GET FIT Premium Payment Mechanism was launched on March 25, and will run until April 24. ?

Unfortunately, however, the GET FIT secretariat in Uganda told pv magazine that PV technology is excluded from the Premium Payment Mechanism. "The reason for this is that we consider the PV REFIT in Uganda as fully cost-reflective. Our program just sponsors shortfalls in cost-reflection as for small hydro, biomass, and bagasse," they stated.

Hydropower favored

A report published at the end of 2012 by the World Future Council, Heinrich Böll Foundation and Friends of the Earth UK suggests that REFITs can unlock Africa's untapped renewable energy potential. "High-level political support as well as buy-in from civil society and the private sector are crucial factors for the successful development and implementation of a REFIT," the report says.??

It adds that over 80% of Uganda’s electricity is generated through hydropower and, despite strong opposition triggered by social and environmental concerns, large-scale hydro projects are favored by the government and multilateral development banks to meet the country’s growing energy demand. This represents a worrying trend given the impact of climate change and recent droughts on water levels.?

Vanishing political support

Meanwhile, it appears that political support for PV has vanished in Uganda; the exclusion of PV technology from the GET FIT Premium Payment Mechanism also raises questions as to whether international partners have grasped the importance of solar energy in the country's energy mix. While the ERA could not tell pv magazine the cumulative installed PV capacity in the country, it is believed that utilization is small.??

Overall, the electrification rate in Uganda is very low, with 12% at national level, and just 5 to 6% in rural areas. Uganda currently has one of the lowest per capita electricity consumption (70 kWh per year) in the world: for a comparison, Africa and Germany have an average of 578 kWh and 7111 kWh per capita, respectively. About 72% of total electricity supplied by the main grid is consumed by 12% of the domestic population concentrated in the Kampala metropolitan area and the nearby towns.

Uganda possesses rich solar energy resources, which could provide solutions to the country’s energy problems by both grid-connected and stand alone PV systems. The civil society and international community need to press the Ugandan Government in doing more for its development.

Edited by Becky Beetz.

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