Ghanaian solar companies may face collapse due to what is described as unfair solar policies and regulations in the industry. Five of them have initiated the relocation process to Liberia and Sierra Leone as the solar business has become unprofitable in Ghana.
Unfortunately, this situation puts the jobs of over 700 people on the line.
In an interview, the Secretary of the Association of Ghana Solar Industries, Mr Agyenim Boateng mentioned that the government continuously uses regulations and policies to hinder the growth of solar energy in the country.
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The Unfavourable Policies
Mr Agyenim Boateng mentioned the following as some of the solar policies that hindered the growth of the solar energy industry.
- The moratorium on utility-scale solar projects, which prevented private companies from developing utility solar projects in the country.
- The directive is that no private solar company should do mini-grids.
He went further to state that, “Currently in the commercial and industrial sector, among factories, industries, bulk consumers of electricity, if you are going to install solar there, the government has issues with it which is not right.”
“There is also a directive which is indirectly saying that no licences should be issued for people to do this and these solar policies and regulations have become a barrier to the growth of the industry,” he stated.
Suspension of licences
The government suspended the issuance of new licences for Wholesale Electricity supply and Permits for Utility-Scale Grid-connected solar photovoltaic (PV) and wind power plants in 2017.
The Energy Commission (EC) provided two main reasons for the decision at the time.
1. First was that the EC had issued about 124 Provisional Wholesale Electricity Supply Licences for Utility-Scale Grid-connected Renewable Energy (RE) projects since the coming into force of the Renewable Energy Act, 2011 (Act 832), out of which only three have been developed, representing approximately a low 2.5 per cent development rate.
Unfortunately, the notice from EC failed to provide further details on the over 97 per cent of licensed projects that have not been developed, operationalise or in which phase of development any of these projects were.
2. The second reason for the suspension of issuance of new PPAs had to do with the Electricity Company of Ghana (ECG) having signed numerous PPAs, above 2,000MW, which was costing the country millions of cedis annually.
Threat to jobs
Mr Agyenim Boateng said that if the situation persisted, it threatens over 700 jobs in the country, especially at a time when jobs are difficult to find.
“These directives came at a time that the companies were already reeling from the painful impact from COVID-19 and we are very much worried as an association,” he said.
He said that although the Association had officially written to both the Ministry of Energy and the Energy Commission, it was yet to receive any response.
“For the Energy Commission, it’s been just a month since we wrote to them so we are still hopeful of a response, but with the Ministry of Energy, it’s been seven months and not even an acknowledgement of receipt of our letter and that is worrying,” he noted.