July 15, 2011

Cambodia’s energy dilemma


Khmer Solar's solar panels at its Phnom Penh office.
AS nationwide electricity demand soars and the risk of shortages grows, experts have said the Kingdom needs to turn its attention towards alternative energy. Many of them believe solar power is the answer, especially in rural areas.

The World Bank in March granted a tender to renewable energy company Sunlabob to install 12,000 solar home systems (SHS) throughout seven of Cambodia’s provinces, said Kamworks Director Jeroen Verschelling, whose company was responsible for implementing the systems. He claimed it was the largest project of its kind in the region.

“A similar project took place in Laos recently, where around 6,500 systems were installed, and Cambodia faces similar issues regarding solar power,” he said.

The main obstacles to the advancement of the industry in Cambodia are accessibility, awareness and affordability, Verschelling said.

“Progress in the sector has been quite slow due to the lack of awareness in rural areas, where SHSs are required most. There needs to be a national campaign to raise awareness from the government or Ministry of Environment.”

With the government focused on expanding the grid and hydro-dam electricity, the last efforts to reduce tax on solar power components came over two years ago, he said. As 75 percent of the Kingdom’s rural population doesn’t have access to the grid, he reckoned solar power is a more viable option.

“Building grids these days is like putting land telephone lines in. Nobody does that.”

Figures released in a report by solar energy organization Pico Sol Cambodia, which intends to scale up solar operations in the country through implementing a US$20 million solar strategy, states about 1.6 million of 2.3 million rural households rely on car batteries and kerosene lighting.

“The price in April 2011 of SHSs for a set with solar panel, charge controller, cables, transport and installation is $298 for a 40 watt-peak and $450 for 80Wp system,” Renewable Energy and Climate Change Specialist Rogier van Mansvelt said at the launch of the roadmap.

He added that while the products are attractive for the 36 percent of Cambodians living under the $1-a-day income rate, they are not affordable. Additionally, solar sets for the richer households are not competitive as a SHS has a high upfront cost compared to battery charging.

There is, however, a growing demand for solar power in Battambang, a comparatively wealthy province, due to its agriculture industry.

“More people are now using solar power in the local rural area because they have more available money, there are also more competitors in the area now,” said Battambang province resident Moeuk Vantha, who purchased his $1,180 SHS from KC Solar in 2008.

He added that although the systems are now much cheaper, costing around $500, it is still financially viable over the 25 year contract period.

“I used to have to take the battery a long way to recharge it, and this cost $1 every time. It also cost $100 to buy a new battery.”

Although knowledge on the benefits of solar power is relatively widespread in Battambang province, financially, it is not always the most sensible option.

“I was visited by company representatives, who provided me with information on solar power and I was very interested because it is better for the environment. But to run the business on it, I would have to spend $5,000, while the generator cost me $250,” said Sdoau district-based roadside restaurant owner Tann Choui Ranesex.

“However, I do think it is better option for people in remote areas,” she added. With awareness growing throughout Cambodia’s rural areas, the 12,000 SHS World Bank tender, the pending Pico Sol solar roadmap and the import tax reduction on components from 35 percent to 7 percent, Margaret Ryan, director of Khmer Solar, the Kingdom’s oldest solar firm, believes the sector is slowly moving in the right direction.

“With solar systems becoming more affordable, awareness through advertisements increasing and the unlikelihood of the grid reaching disconnected communities in the foreseeable future, I believe solar power can and will take off in the coming years.”

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