Ghana Solar Feed-In Tariff Contracts To Shift From 10 To 20 Years
Originally published on Planetsave.
Solar incentives are getting a long-sought-after boost in Ghana.
According to PVTech, if all goes as planned, Ghana will soon update its solar feed-in-tariff (FiT) program with payment contracts which last for 20 years as opposed to the current 10-year length.
Wisdom Ahiataku-Togobo, director of renewables and alternative energy at the Ministry of Power Ghana, told delegates at the Solar and Off-grid Renewables West Africa event that the solar FiT program of Ghana is ready for updating.
In April, Ahiataku-Togobo addressed developers raising concerns and asked for a 20-year period for the FiTs instead of the previous 10 years, and this is being accounted for in the next update.
Ahiataku-Togobo cited BXC’s 20MW solar plant in Ghana, saying this endeavor is the first privately owned solar installation in the country, and that this was done without credit enhancement from government.
He added it was unfortunate many developers look for credit enhancements from the government. For the first tender, 18 of the companies which advertised have been prequalified and have requested to submit their technical and financial proposal.
Ahiataku-Togobo said: “We hope that this tendering process will bring us very attractive solar prices in the country.”
He also reemphasized the target for a maximum of 200MW for the rooftop distributed solar generation scheme and said system owners can benefit from the net metering schemes.
Image: Ghana flags via Shutterstock
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Which is it, net metering or FIT? You could say that FIT is the supercategory of which net metering and guaranteed feed-in prices are subsets, but in normal usage FIT refers to the latter.
Constant feed-in tariffs (FiT) versus 23% currency loss against US-Dollar since last FiT fixing in Sep 2014, i.e. 23% loss on revenues in the first 16 months… Since introduction of the new Ghana Cedi (GHS) 7 years ago, the currency has devaluated ca. 80% against US-Dollar (and so would have revenues under current FiT scheme that has no automatic adjustment mechanism in place as of today, July 1st, 2016). Such adjustment mechanism was mentioned in the FiT publication in Sep 2014, but not put in practice as my recent communication with Ghanaian authorities has revealed. One may be surprised if foreign investors are eager to invest in Ghanaian PV or wind power plants at all, if losses from currency fluctuations exceed even worst case scenarios on wind regime variations or unexpected repair cost. How many FiT-based projects have been commissioned since Sep 2014, when regulator PURC has published those fixed tariffs (“based on 3.1986 GHS/USD”, as the publication specified)? Today’s exchange rate is 3.9208.
Excess power sold through a “net metering” scheme would indeed benefit from an Automatic Adjustment Formula that is applied to consumer tariffs, but not to FiT yet. However, power consumption of A/C cooled office buildings, hotels or residential homes exceeds the amount that PV panels on their roofs can deliver a lot, so “net metering” will be of theoretical relevance in most cases.