SOLTRAIN 3rd Policy Workshop discusses funding opportunities for Namibia Solar Thermal Technology Roadmap implementation

Workshop participants pictured at the solar collectors with 120 m2 collector area of the Katutura State Hospital Maternity Ward.

The Ministry of Mines and Energy (MME), with support from the Namibia Energy Institute (NEI) and SADC Centre for Renewable Energy and Energy Efficiency (SACREEE), conducted the 3rd Policy Workshop under Southern African Solar Thermal Training and Demonstration Initiative (SOLTRAIN) project for Namibia.

Around 28 participants from the regulator, academia, municipalities, vocational training centres (VTCs), government ministries, SACREEE, private sectors and financial institutions, attended the workshop which was held at the Namibia University of Science and Technology (NUST) on 9 August.

The main objectives of the 3rd Policy workshop were to bring together government ministries, electricity supply industry key players, industry associations, financials, donors, researchers and academia to discuss funding opportunities and the mobilisation of national and international financial resources for the implementation of the Namibia Solar Thermal Technology Roadmap (STTR).  In addition, the workshop also aimed to discuss the necessary roles and measures for the implementation of the Namibia STTR.

It highlighted some of the successful solar heat implementation programs for the acceleration transformation of the Namibia energy system towards more energy efficiency (EE) and renewable energy (RE) to reach the goal of self-sufficiency.

Director of Energy in the MME, John Titus, highlighted the goal of the Namibia STTR of achieving a fully functional 0.5 m² (approximately 0.35 kW thermal equivalent) of flat plate solar thermal collector installed capacity per inhabitant in the country by 2030. He further indicated that, by achieving the said penetration of solar thermal collector installed capacity, around 1.5 million m² of collector area need to be installed by 2030.

Titus said the STTR will help in achieving the goals of the National Energy Policy and Renewable Energy Policy on ensuring the security of all relevant energy supplies to the country, create cost-effective, affordable, reliable and equitable access to energy for all Namibians, promote the efficient use of all forms of energy and incentivise the discovery, development and productive use of the country’s diverse energy resources.

‘’The value of energy efficiency in relation to avoided generation is not well quantified and therefore often poorly understood, and, in most cases, it is not part of investment decisions. The intervention of SOLTRAIN in the country has quantified these benefits of separating heating demand from total electricity demand to align the country with the energy transition,” said Titus.

The increased use of solar thermal energy has the potential to reduce Namibia’s dependency on imported electricity, reduce greenhouse gases (GHG) emissions, increase the security of local supplies and create savings for end-users, creating job opportunities, thus resulting in positive macro-economic benefits.

Werner Weiss, Director of the Austria-based Institute for Sustainable Technologies (AEE – INTEC) and the SOLTRAIN Project Coordinator shared some successful solar heat implementation programs in his virtual presentation to the workshop. He shared lessons and opportunities in other countries and highlighted some successful solar heat implementation programs around the world.

Weiss said in order to accelerate the use of solar energy, all leading countries have introduced either subsidies, obligations, tax credits or tax incentives. However, he highlighted that promoting renewable heating through financial incentives taken from the public budget becomes more and more difficult as the market volumes increase, but a key advantage of solar obligations is that they have a very limited impact on public budgets. 

He pointed out some of the support schemes such as demand side support mechanism, direct grant and rebate schemes and certification trading schemes for tradable certificates.

Helvi Ileka, Acting Director of NEI and SOLTRAIN project focal person for Namibia, shared information on the developments since the last two policy workshops and the status of the funding application for Namibia STTR.

She said funding was availed by MME to hire a consultant for the Namibia STTR to be converted into a bankable proposal and that technical assistance was being sought from the African Development Bank (AfDB) to ensure that a bankable proposal supported by financial institutions was developed.

Anders Cajus Pedersen from the AfDB African Development Fund, in his virtual presentation, shared the financing mechanisms on solar water heater programs and the on-bill financing scheme.

He said most of the energy efficiency investment was in the building sector, followed by the transport sector and then the industry sector.

Pedersen highlighted some benefits of energy efficiency on the environment (lowering GHG emissions and other pollutants), economic (lowering individual utility bills, create jobs, and help stabilise electricity prices and volatility), utility system benefits (providing long-term benefits by lowering overall electricity demand, thus reducing the need to invest in new electricity generation and transmission infrastructure) and  on risk management (helping diversify utility resource portfolios and hedging against uncertainty associated with fluctuating fuel prices).

He shared his experience on the on-bill financing mechanism (OBF), used by a utility company to finance energy-efficiency improvements in a building or a facility. The utility provides financing (i.e., loan) to its clients for implementing RE and EE measures. The OBF is designed to address the initial cost barrier to adoption of EE technologies and services.  

Some of the advantages of the OBF highlighted by Pedersen include addressing “first-cost” hurdle to customer adoption by requiring little capital up front, it can be structured to use third-party capital at no cost to taxpayers or ratepayers, provides a secure revenue stream because failure to pay can be tied to disconnection, can use past bill repayment as a proxy for credit, expands access to retrofits and lowers cost of capital because threat of utility shut-off leads customers to prioritise utility payments and leverages existing utility resources and customer practices to collect payments.

However, he also highlighted some challenges with the OBF such as utilities could be reluctant to take on role of financing entity; potential exposure to consumer lending laws, may require up-front investment by utility to reform billing structures and other systems and in certain instances, ensuring that energy savings will exceed loan/tariff payments could be difficult.

The workshop concluded that AfDB will offer technical assistance to the Terms of Reference (TOR) developed by NEI for converting the Solar Thermal Roadmap into a bankable proposal. Furthermore, AfDB indicated that it will provide inputs to the bankable proposal once it is developed. The workshop ended with a technical tour to the SOLTRAIN funded demonstration system at the Katutura State Hospital Maternity Ward solar water heating system.

Some of the representatives of the regulator, municipalities, vocational training centres (VTCs), government ministries, SACREEE, private sectors, financial institutions and members of the academia who attended the 3rd Policy Workshop for Policy Makers on Solar Heat

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