Just In: Solar companies in Ghana in trouble due to unfair solar policies

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Ghanaian solar enterprises may face bankruptcy as a result of the industry’s allegedly discriminatory solar policies and regulations. Because the solar companies in Ghana have become unprofitable, five of them have begun the process of relocating to Liberia and Sierra Leone.

Unfortunately, approximately 700 people’s jobs are at risk as a result of this circumstance.

Mr. Agyenim Boateng, Secretary of the Association of Ghana Solar Industries, stated in an interview that the government continues to utilize regulations and policies to stifle the expansion of solar energy in Ghana.

The Unfavourable Policies

The following are some of the solar policies that have hampered the expansion of the solar energy business, according to Mr. Agyenim Boateng.

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1 The utility-scale solar project moratorium, which banned private enterprises from establishing utility-scale solar projects in the country.

2 No private solar company is allowed to build mini-grids, according to the instruction.

“Currently, in the commercial and industrial sector, among companies, industries, bulk consumers of electricity, if you want to install solar there, the government has troubles with it,” he continued, “which is not appropriate.”

“There is also a directive that implies that no licenses should be provided for anybody to do this,” he said, adding that “these solar policies and regulations have become a barrier to the industry’s growth.”

Suspension of licenses

In 2017, the government put a halt to the issuing of new wholesale electricity supply licenses as well as permits for utility-scale grid-connected solar photovoltaic (PV) and wind generating plants.

At the time, the Energy Commission (EC) gave two key grounds for its judgment.

1 Since the Renewable Energy Act of 2011 (Act 832) went into effect, the EC has issued approximately 124 Provisional Wholesale Electricity Supply Licences for Utility-Scale Grid-connected Renewable Energy (RE) projects, of which only three have been developed, representing a low 2.5 percent development rate.

Unfortunately, the EC notice did not include any additional information on the over 97% of licensed projects that have yet to be constructed, operationalized, or in what stage of development they were in.

2 The second reason for the suspension of new PPA issuing was that the Electricity Company of Ghana (ECG) had signed multiple PPAs totaling more than 2,000MW, costing the country millions of cedis annually.

Threat to jobs

Mr. Agyenim Boateng stated that if the scenario continued, over 700 employment in the country would be jeopardized, especially at a time when jobs are few.

“These directives arrived at a time when companies were already reeling from the devastating effects of COVID-19, and as an association, we are quite concerned,” he said.

He claimed that despite writing to both the Ministry of Energy and the Energy Commission, the Association had received no answer.

“It’s only been a month since we wrote to the Energy Commission, so we’re still hopeful of a response,” he said, “but it’s been seven months and we haven’t even had an acknowledgment of receipt of our letter, which is concerning.”