How can a low-income household procure small-scale hybrid renewable energy system? A techno-economic and acquisition analysis

Abstract

Purpose

The application of hybrid renewable energy system (HRES) can mitigate inadequate access to clean, stable and sustainable energy among households in sub-Saharan Africa (SSA). Available studies on HRES seem to concentrate only on its techno-economic and environmental viability. In so doing, these studies do not seem to underline the likely challenges that follow the acquisition of HRES by especially low-income households. The ensuing reality is, of course, a limitation in the use of HRES in homes with low incomes. It is therefore imperative to analyze how a household with low income can afford this kind of energy system. The purpose of this study, therefore, lies in presenting a techno-economic, environmental and affordability analysis of how HRES is acquired.

Design/methodology/approach

To arrive at a grounded analysis, a typical household in SSA is used as an example. The analysis focused on the pattern of energy use, and this is obtained by visiting an active site to evaluate the comprehensive load profile. In the course of analysis, an optimal techno-economic design and sizing of a hybrid PV, wind and battery were undertaken. Additionally, an acquisition analysis was done based on loan amortization.

Findings

The interesting result is that a combination of the photovoltaic-gasoline-battery system is the most cost-effective energy system with a net present cost of $2,682. The system combination can lead to an emission reduction of approximately 98.3 per cent, compared to the use of gasoline generating sets, common mostly in SSA. If an amortized loan is used to purchase the energy system, and the payment plan is varied such that the frequency of payments is made quarterly, annually, semi-annually, bi-monthly, semi-monthly and bi-weekly, it will be observed that low-income household can conveniently acquire a HRES.

Originality/value

The result presented a framework by which a low-income household can purchase and install HRES. To facilitate this, it is recommended that low-income households should be given interest-friendly loans, so as to enhance the acquisition of HRES.

Citation

Babatunde, O.M., Munda, J.L. and Hamam, Y. (2019), "How can a low-income household procure small-scale hybrid renewable energy system? A techno-economic and acquisition analysis", International Journal of Energy Sector Management, Vol. 13 No. 4, pp. 1149-1172. https://doi.org/10.1108/IJESM-03-2019-0003