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EFFECTIVE GOVERNMENT POLICY AND INSTITUTIONAL FRAMEWORKS: PIVOTS FOR THE DISSEMINATION AND SUSTAINABILITY OF SOLAR PV IN RURAL AREAS IN THE DEVELOPING WORLD: THE CASE OF GHANASimon BawakyillenuoThe University of Hull, HullDepartment of GeographyCottingham RoadHU6 7RXUnited KingdomS.Bawakyillenuo@,bawasius@ABSTRACTThe integration of solar PV into rural electrification programmes in the developing world has brought in its wake dissemination/adoption and sustainability challenges.In looking for ways that can enhance the wider dissemination of the technology in the developing world, some authors (e.g. Philips and Browne, 1999; H ankins, 2000) have advocated the greater involvement of the private sector. While the private sector could well play a role in the PV dissemination drive, this paper by contrast argues that effective government institutional and policy frameworks are the most pivotal elements in the drive to disseminate solar PV systems to the majority of the rural poor in the developing world, and to sustain them. Using two case studies, the paper contextualises the interrelationship between ineffective government institutional and policy frameworks and the low level of solar PV dissemination in rural Ghana as well as the lack of sustainability of PV projects.1. INTRODUCTIONEnergy resources have always played an important role in the development of human society. Since the industrial revolution, energy has been a driving force for the development of modern civilization. It has been recognised at the global level that the provision of a modern source of energy such as electricity, has been the sine qua non for many of the advancements made in economic growth, employment opportunities, healthcare, education as well as improvements in living standards. This therefore implies that communities (rural and urban) will stand a better chance of achieving both social and economic prosperity, once they have an effective and reliable source of energy. For instance, the International Energy Agency (IEA) (2002) notes that the “lack of electricity exacerbates poverty and contributes to its perpetuation, as it precludes most industrial activities and the jobs they create” (p.33).Between 1970 and 1990, 800 million people in rural areas worldwide did gain access to electricity (Amulya et al., 2000). H owever, at present, the number of rural people without access to electricity is more than twice (i.e. two billion) this number, and most of them live in the rural areas of the developing world, especially Africa (Duke et al., 2002). More than 83% of Africa’s rural population is without electricity, and even worse in Sub-Saharan Africa where more than 92% of the rural population is unelectrified (Agumba, 2002). The extension of the conventional grid to most rural households has generally11 STRATEGIES AND POLICIES2879been considered as financially unviable since the 1970s dueto the remoteness and low density of settlements. Similarly, the micro-grid alternative, using diesel-powered electric generators is also rendered largely unviable. Against this backdrop, solar PV , especially solar household systems (SHSs) have been considered by many donor organisations, national governments, academics, researchers, etc., not only as the least-cost option for remote rural electrification in the developing world, but also the most environmentally benign energy source, with an inexhaustible physical resource base. Without doubt, the potential usefulness of SH S in rural areas in the developing world can’t be overemphasised.Notwithstanding the relative advantages involved in extending the SH S to the rural areas as compared to the national grid, the wider scale dissemination of the technology to most rural areas in the developing world, especially Sub-Sahara Africa, remains elusive (Table 1). Using two solar PV projects in Ghana as case studies, this paper examines the interplay between solar PV policies and institutional arrangements of Ghana, and the adoption and sustainability trajectories of solar PV in rural areas. Many, including Martinot et al. (2001) have outlined barriers and solutions to the dissemination of solar PV in the developing world. Philips and Browne (1999) and others for instance, argue that the private sector is most critical for solar PV TABLE 1: ESTIMATED NUMBER OF SOLAR PV SYSTEMS DISSEMINATED IN AFRICACOUNTRYESTIMATED NUMBER OF SOLAR PV DISSEMINATEDBurundi 1,800Djibouti 941Malawi 900Eritrea 2,000 Uganda 3,000 Ghana 4,601Ethiopia 5,000Botswana 8,000Zimbabwe 85,000Kenya 150,000 South Africa 150,000Source: Edjekumhene, 2003; Karekezi and Kithyoma, 2005market development in the developing world. While not discounting completely the role of the private sector in solar PV dissemination, this paper, however, argues that effective institutional and policy frameworks of governments are the most pivotal structures for the dissemination and sustainability of the technology in the rural areas, especially in countries with well developed grid networks, such as Ghana.2. CONCEPTUALISING THE EFFECTIVENESS AND INEFFECTIVENES OF INSTITUTIONAL AND POLICY ARRANGEMENTS FOR SOLAR PV DISSEMINATION Effective government institutional and policy arrangements can have the effect of boosting the adoption of solar PV in the rural areas, and are classified as ‘stimulants’ to solar PV dissemination. As Sawin (2004) notes “... a sustained renewable energy market can be developed quickly and efficiently if the right combination of policies is adopted” (p: 1). Conversely, ineffective institutional and policy arrangements have the effect of undermining the adoption of the technology and distorting the sustainability of already installed solar PV systems. These can therefore be classified as ‘barriers’ to the dissemination of the technology. On a geographic scale, the dissemination and sustainability dynamics of solar PV are interdependent on the relative effectiveness of the institutional and policy arrangements at the national and local/regional levels.At the national level, effective institutional and policy arrangements for PV include: a well-defined energy policy; strong regulatory institutions; efficient legislation;well-defined and resourced energy departments; pro-energyfinancial institutions. At the regional/local level,complementary pillars of effective institutional arrangements include: an indigenous committee withoversight responsibilities for local energy projects; a regional/district office responsible for monitoring rural energy projects and the activities of the indigenous committee; efficient communication links between theindigenous committee, regional/district office and projectsimplementers; maintenance fund for community projects.Proceedings of ISES Solar World Congress 2007: Solar Energy and Human Settlement 28803. GEOGRAPHICAL PERSPECTIVES OF GHANA Ghana has a population of approximately 22.4 million, 54 percent of whom live in the rural areas. Currently, 43 percent of the population have access to electricity (77 percent for urban, but only 17 percent for rural). In consequence, approximately 82 percent of rural household still use kerosene, candles, dry cells batteries, oil lamps for lighting and fuelwood for cooking. Agricultural activities (fishing, farming and livestock rearing) are the fundamental economic and subsistence activities in rural Ghana. Crop farming in particular is rain dependent — poor rainfall leads to poor yields and in years of extreme drought, none at all. Although Ghana has approximately twice the per capita output of poorer countries in West Africa, poverty is widespread in the rural areas, accounting for about 84 percent of Ghana’s poor. Thus, the success of any solar PV rural electrification measures partly depends on their congruence with the characteristics of these rural areas.4. TWO SOLAR PV PROJECTS CASE STUDIES:GHANAThe two case studies were carried out through field survey in 2005 by the author. The projects are the Government of Ghana/Spanish Government off-grid solar PV rural electrification project in Wechiau in Wa West District (1998) and the UNDP/GEF/Ghana Government Renewable Energy Service Project (RESPRO) in Bunkpurugu/Yunyoo District in 1999. The goal of the Wechiau project was to assess the social, economic and technical performance of solar PV as an instrument for rural electrification in off-grid communities. The project comprised of a battery centre and SH Ss, with the implementing body being the Ministry of Energy (MOE). The financing mechanism used to supply the SH Ss to customers was the fee-for-service. While customers paid a flat installation fee of ¢100,000 cedis (US$ 13.92), users of both the 50Wp and 100Wp modules paid ¢15,000 (US$2.09) and ¢25,000 (US$3.48) monthly tariffs respectively. The Wechiau project was managed by two formal indigenous groups after its implementation (i.e. operators of the battery charging centre and a solar committee) with different responsibilities. Operators of the battery charging centre were tasked with charging of batteries commercially, give the fees charged to the solar committee, and undertaking basic servicing of the community lighting systems. The solar committee was to collect the monthly tariff from the users on behalf of the MOE and deposit it at the bank.Implemented from 1999 to 2004, the main aim of RESPRO was to initiate the development of a commercial market for renewable-based electricity services in rural Ghana, with an initial emphasis on solar PV. An individual customer could apply for one of two SHSs, 50Wp and 100Wp. Because the main market model was the fee-for-service, customers paid a ¢250,000 (US$34.86) installation fee and ¢90,000 (US$12.55) six months advanced tariff for 50Wp SH Ss before installation was carried out. On the other hand, customers wanting 100Wp SH Ss paid a ¢500,000 (US$69.72) installation fee and 150,000 (US$20.91) six months advanced tariff. Six months after installation, customers began paying monthly tariffs - ¢15,000 (US$2.09) for a 50Wp system and ¢25,000 (US$3.48) for a 100Wp system. RESPRO was implemented by a subsidiary unit of the MOE, which was formed through the secondment of some its personnel. Personnel included a national co-ordinator in Accra, two engineers and six field technicians who were responsible for the installation and maintenance of the solar PV systems.4.1 Associated Features and Problems of These Projects The field survey of these two projects, which was conducted during their post-implementation phase revealed several inherent features and problems, characteristic of dissemination challenges and unsustainability. They include the following:1) The non-adoption of the SH Ss by the majority of the rural inhabitants in the case study sites.2) The expression of preference for the national grid and not the SHSs.3) Malfunction of the majority of the installed SHSs.4) The withdrawal of qualified technicians after the implementation phase of these projects.5) The politicisation of the SHSs by local political aspirants(i.e. tagging SHSs as inferior to grid supply).6) Lack of service after project phase, while customers are still required to pay tariffs (i.e. inappropriate implementation of the fee-for-service financing model).7) The unwillingness of some customers to pay monthly tariffs.8) Lack of accountability and transparency by the solar11 STRATEGIES AND POLICIES 2881local solar committee.4.2 Drivers of the above Problems of the Two Projects While many factors underlie the low level of SH Ssdissemination in the developing world, a criticalexamination of the dissemination challenges andunsustainability trajectories of SH Ss in the two projects under discussion, showed their close interrelationships with the national institutional, policy and regulatory measures on solar PV, and the inadequate measures at the regional/local level. One can argue that while two decades of incorporating renewable energy into the mainstream energy planning in Ghana may define the policy environment, the appropriateness and implementation of these policies is another issue. These policy, institutional, regulatory and legislative arrangements for the promotion of solar PV dissemination and sustainability lack far-reaching provisions. Painuly and Fenhann (2002) for instance note that “… existing renewable policy framework in Ghana is not potent enough to ensure the commercialisation and widespread utilisation of RETs” (p.21). The study identified the following limitations in the national and regional/local institutional, policy and regulatory arrangements as the underpinning drivers of the problems of the two solar PV projects case studies.4.2.1 National LevelFirst and foremost the absence of well-defined national policies for solar PV is one of the major limitations that have led to the poor adoption levels of SH Ss and the unsustainability of these solar projects. Key components of this limitation include the lack of clear-cut policies on specific areas of PV deployment— a consequence of this situation being the government’s conflict of interest between the national grid extension and the execution of PV projects (Figure 1).Other components of the lack of well-defined national policies for solar PV include the absence of coherent provision for PV education and information dissemination; favourable incentive policy structures (tariffs, subsidy, government budgetary allocation, etc.) for the national grid rather than PV; the absence of national targets for PV; non-integration of innovative financing mechanisms (e.g. ESCOs).National grid extension polesin BindeFig. 1: Distribution of electricity extension poles in Binde(a beneficiary community of RESPRO) for thesupply of the national grid.Secondly, the institutional arrangement for solar PV in the energy ministry is poor. There is an absence of a consistent and dedicated institution solely for PV activities (or even renewable in general); lack of human capacity building (i.e. technical personnel) and retention for PV activities. These have contributed to a lack of skilled personnel, lack of maintenance, lack of know-how, and poor awareness for solar PV in these projects areas. In addition, there is inappropriate implementation of solar PV projects by the MOE as well as the poor administering of the fee-for-service financing model.Thirdly, the national regulatory frameworks for solar PV are weak. There has been inadequate definition of PV end-user protection measures such as national PV companies’ code of practice, national PV technical standards, as well as the absence of certification, testing enforcement institutions for PV, and unclear regulations for licensing private PV companies, etc.Other elements of the national institutional and policy arrangements interrelated with the dissemination and sustainability problems of these projects include the abandonment of PV projects (e.g. Wechiau project); the government’s reactive approach to solar PV supply — including the over-dependency on donor aid. In addition, there has been a lack of conformity between national and international PV policies with the energy needs of some of the rural people.Proceedings of ISES Solar World Congress 2007: Solar Energy and Human Settlement28824.2.2 Regional/Local LevelAt the regional/local level, the dynamics of institutionaland policy limitations that underpinned the non-adoptionand sustainability problems of the two projects include,poorly defined supervisory structures, absence ofindigenous plans/programmes to sustain installed publicSH Ss. Other issues included the absence of an intermediary body at the regional level, especially in the Wechiau’s project, to provide a link between the nationaland local level institutions, and the absence of efficientcoordination between the solar PV projects implementers(MOE) and the local oversight committees.5. CONCLUSIONBased on the two case studies, this paper has demonstratedthe overarching need for effective government institutional,policy and regulatory arrangements for the disseminationand sustainability of solar PV in rural areas in thedeveloping world. In many cases, the private sector willfollow the ‘market’ and address the professional middleclasses alone. However, the government’s activeinvolvement in PV activities is indispensable to fashion outthe appropriate institutional infrastructures, including favourable financial and regulatory environments, clear,open and realistic rural electrification policies for differentincome and social groups in the rural areas. South Africa,Germany and Japan present classic cases of national governments that are actively involved in solar PV activities.6. ACKNOWLEDGEMENTSI will like to thank Dr. Phillip Bradley and ProfessorGraham Haughton for proofreading this paper and helpingme to fine-tune it.7. REFERENCES(1) Agumba, M. 2002. 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