Is solar the answer to high charging costs?

From the newsletter

Africa’s leading electric motorcycle and charging companies are installing solar PV systems on their grid-tied swapping stations to lower power bills. This enables them to use solar power during the day to charge EV batteries and switch to the grid when the stored power is exhausted — all while the continent is facing rising power prices, increasing charging costs. 

• Solar power has the potential to power not only off-grid charging stations, but also help reduce costs for grid-tied stations. Once installed, charging companies significantly cut their power costs, which could lead to lower charging prices for consumers.

• The main challenge is that the cost of solar installation is quite high. While panel prices are falling, the cost of batteries remains hefty. This means that it could take charging firms years to get economic returns from investment in solar.  

More details

• A growing number of electric vehicle companies are turning to solar energy, which is abundant in Africa. Spiro, which is in eight countries, operates dozens of battery swapping stations. The firm says electricity accounts for 30% of its operating costs and is targeting solar energy to reduce its power bills. This comes at a time when electricity prices in Kenya, where Spiro is headquartered, have risen sharply over the last five years.

• Roam Electric, another electric motorcycle company based in Kenya, recently installed solar panels across all of its 12 charging stations in the capital Nairobi. This has reduced its charging costs by nearly half, the company says. Roam says the use of solar has enabled it to reduce its charging and swap fees by 40%.

• Zembo, a leading Ugandan electric motorcycle company, has been betting on solar energy for years. The company has been partnering with third parties to install hybrid solar PV systems to power its charging stations across the capital Kampala, helping reduce its electricity costs.

• More than 90% of electric motorcycles sold in Africa are used for commercial purposes. Electric motorcycles are cheaper to operate than fuel motorcycles because charging is cheaper than fuelling. But the gap is reducing, as electricity prices continue to rise. As a result, the main argument for switching to an electric motorcycle becomes weaker. 

• In addition to cost benefits, another advantage that solar power has is that it can also be used to support off-grid charging stations. This is key, as nearly half of the continent’s population lacks access to electricity. South African startup Charge for instance seeks to make solar-powered off-grid charging stations mainstream in the country. It plans to build 120 stations by 2026.

• The construction of solar-powered charging stations is expected to accelerate in the coming years as the cost of installation declines. Solar photovoltaic costs have fallen by 90% in the last decade, and batteries by more than 90%. These price cuts have already seen the use of solar home systems in Africa to skyrocket, which could boost home EV charging. 

• For EVs, lower solar panels and battery costs will be big. Electrification projects are costly, meaning many rural areas in Africa are unlikely to get access to electricity any time soon. With solar component prices falling, investors can set up solar-powered off-grid charging sites at a lower cost. This will help the adoption of electric cars and motorcycles in rural areas. 

Our take

• The shift to solar power is a clear response to rising electricity prices and could help lower charging costs. This direct impact on affordability will strengthen the value proposition of electric over fuel-powered motorcycles. 

• The growing success and strategic pivots towards solar integration by African EV companies, coupled with the falling costs of solar components, could attract significant further investment into the continent's electric mobility ecosystem. 

• The critical role of solar power in enabling off-grid charging stations will be a game-changer for electric vehicle adoption in rural and underserved areas of Africa. This expansion beyond urban centers will unlock new markets for electric motorcycles.