President Obama Commits to Solar Power Investments

President Obama discusses about solar power to the audience during a stop in Nevada. Solar power will be part of a new initiative to bring electricity to millions of people in sub-Saharan Africa.

          Along with more than $9 billion in private investments, the United States will be committing more than $7 billion in the next five years towards bringing electricity to millions of people in sub-Saharan Africa, President Obama had said on Sunday in South Africa. "Access to electricity is fundamental to opportunity in this age," Obama said in announcing the solar initiative, known as Power Africa. "It's the light that children study by, the energy that allows an idea to be transformed into a real business. It's the lifeline for families to meet their most basic needs. And it's the connection that's needed to plug Africa into the grid of the global economy."
        Sub-Saharan Africa compromises 48 nations. Among the countries to be targeted initially are Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania. "These countries have set ambitious goals in electric power generation and are making the utility and energy sector reforms to pave the way for investment and growth," the White House said. The more than $7 billion in United States investment will include up to $5 billion in support from the United States Export-Import Bank.
       "More than two-thirds of the residents of sub-Saharan Africa lack access to power," the president said. "In rural areas of the region, more than 85% of people don't have electricity. Power Africa will deliver electricity to cities, villages, and farms throughout sub-Saharan Africa." According to the International Energy Agency, sub-Saharan Africa will need more than $300 billion in investment to provide power for everyone by 2030. "Power Africa will supply electricity to at least 20 million households and businesses," the White House said.

Solar Market Needs Investors

       According to Solar Energy Industries Association (SEIA), the cost to install solar panels is declining as the solar panel prices have dropped 41% last year compared to 2011. This, in turn, has helped United States solar installations grow 75% in 2012, from the amount of 1,855 megawatts in 2011 to 3,300 megawatts. Because of this steady growth in the solar market, researchers believe that by 2016, solar installations will continue to progress to an estimating amount of 9,000 megawatts.
      However, because there is a lack of investments in the solar market field, these solar projects will never be built or obtained. Bloomberg New Energy Finance forecasts that the industry will need $3.1 billion of equity investment in 2013, compared to $1.8 billion in 2012. Also, Environmental Defense Fund (EDF) is committed to helping expand the number of investors in solar projects as the opportunity of investing in such projects would yield much profit and it will enhance sustainability in society today.
      Large investors are able to choose between two strategies in terms of investing in these solar projects. The commonly used method would include making investments in large, utility scale projects. For example, recently, there have been residential solar developers creating funds for investors to take stakes in a large number of residential and small commercial solar projects. The other strategy is to have homeowners, whom don't have the upfront capital to purchase solar systems (which estimates the cost up to $15,000 or more), given the option to pay nothing down for solar equipment.
    EDF continues to plan an effort to reach out to potential solar investors to make the environmental case for investing in solar and other renewable projects. After all, investing in solar energy helps spur economic development, create American jobs, allow for energy independence and lessen our carbon footprint.