Friday, 16 March 2012

Sun in the Forecast for the Developing World’s Alternative Energy

Green energy for all

Green Launches
The developed world, once thought to be the dominant employer of green technology, is slowly being met in renewable energy investment by the developing world. Thanks to the emerging middle classes in the densely populated regions of China and India, a desperate need for expansive power networks is bringing alternative energy into the picture. In addition, many of the world’s impoverished citizens live outside the reach of urban grids forcing them to rely on inefficient and hazardous energy sources like coal and kerosene. Thankfully, renewable energy’s capability to provide localized, safe, reliable, and inexpensive power is catapulting it to the front of charitable agendas worldwide.

Green Alliance
Additionally, extensions of government initiatives for renewable energy investments and international campaigns, such as the UN’s dedication to making 2012 “The International Year of Sustainable Energy for All”, promise to surge investment in renewable projects in the developing world for years to come. While the significant investments in green technology undertaken by major developing nations have provided a beacon of hope for our planet and its residents’ viability, a spotlight must shine in the coming years on the poverty ridden nations of our globe.

Declining prices

Economies of scale and the technological improvement of solar panels have given renewable energy comparable advantages in key characteristics with the leaders of its industry. Thanks to the plunging prices of photovoltaic (PV) units, which have dipped more than 60% in the past three years, solar energy is providing some of the highest returns on energy investment in the world’s sunny regions.

Why rural

Since an ample supply of solar energy is commonly found in the poverty stricken regions in Africa, Southeast Asia, and Latin America, PV technology is a logical candidate in eliminating global energy poverty. Besides the geographical fit solar panels have with impoverished nations, PV units also boast advantages of being small-scale, remotely implemented, and completely emission free. Whereas other renewables like hydro or biomass require substantial financing, strategic placing, and minimization of the environmental impact, solar panels face little, if any, of these obstacles. As over 80% of those without electricity are in the rural areas of our planet, the assets provided by PV technology in bringing remote, cost-effective energy directly to people, will help shed light on global poverty.


The most promising project in the Africa/Eastern European region is being offered by the blossoming renewable energy group Desertec, which is devoted to completely satiating energy needs with the immense power of the sun. Using solar panels in an expansive network stretching across the Saharan Desert from Saudi Arabia to Morocco, the projects aim is to source enough electricity to supply the entire region with enough left over to supply 15% of the continental European demand. The first solar farm in the Desertec project will be installed in Morocco later in 2012, with many more to follow.

Micro-financing enables low income investment

Aside from Africa, there is a pulsating need for affordable, reliable electricity in Asian and Latin American nations living below the poverty line. Whether it’s the over 400 million people living without electricity in booming India or the 20 million living off the grid in war torn Afghanistan, the need for energy is pressing. Micro-financing has opened an entire world of possibility to the poor through social enterprises like Kiva, an interest free collection of first world lenders who donate funds to third world lenders via the Internet.

The benefit of renewable energy is so promising that entrepreneurs are investing in third world projects not just for the humanitarian benefit, but for the reliable return garnered from their investment. For example, the Cambodian based company Kamworks offers rental prices on alternative energy units that match the daily cost of kerosene. This makes the investment in renewables affordable for those living in poverty and rewards investors with increasing returns, as their start-up costs are paid off with rental fees. Over the next decade, the expansion of micro-financing options that bring individual renewable energy units, particularly solar, to remote locations will provide light in every corner of the globe.

Opportunity for growth

Beyond Profit
Despite record levels of financial growth in 2011 to Africa’s green energy sector, which more than tripled its 2009 level of financial investment, the renewable abundance of energy in Africa remains largely untapped and dramatically lagging behind the rest of the world. Over $3.6 billion was invested across the sun-baked continent in 2009, with most of it shelled out to northern and southern African nations. Contrast this figure with the $211 billion posted by the market as a whole and it becomes evident that Africa is tragically under serviced in its renewable potential. The encouraging news is that over the past three calendar years, African investment continues to reach new record levels, inspiring confidence in investors to get behind life-changing alternative energy projects.

Renewable Energy Law
The advantage provided by lacking infrastructure in developing nations has been reflected in the steady growth of the developing world’s investment in renewable technologies in the early 2000s. With options like micro-financing becoming a practical option for some of the poorest people on the earth, the basic right to electricity has been given a vehicle for mass delivery. Furthermore, collective widespread investments in far-reaching green projects will whittle away the dependence on fossil fuels while providing much needed employment and income opportunities for our poorest nations. The coming years will be prosperous ones for the green industry in the developing world, as all of the steam built up by the previous decades investment will propel change throughout the third world.

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