View source for Impacts of Locally-Assembled Systems on Local Businesses and Economy

= Overview<br/> =

Locally-assembled renewable energy systems can lower costs, reduce imports and stimulate the development of national commercial renewable energy markets by increasing the local value-chain share. They allow more people to gain access to off-grid electricity, particularly in rural areas. Locally-assembled renewable energy systems are also found in a wide variety of forms – from solar PV to wind turbines to improved cook stoves. It should, however, be noted that locally-assembled systems potentially have some weaknesses.<ref>Karl Mallon, 2006, Renewable Energy Policy and Politics: A handbook for decision-making, pp. 80, http://bit.ly/2pcmTFY </ref><br/>

These weaknesses may include: less regulation, insufficient training or a lack of supervision during the assembling of the product resulting in lower quality merchandise. Incorrectly assembled systems can also result in technology being discredited, thereby potentially reducing the product’s dissemination rate for years to come. It is therefore vital that the national implementation and usage of locally-assembled systems is well managed to maximise positive economic development and renewable energy expansion.<ref>Gerald Foley, 1995, Photovoltaic Applications in Rural Areas of the Developing World, 23-304, http://bit.ly/2qSgf51</ref><br/>

= Initiating Locally-Assembled Systems =

The first step towards increasing the prevalence of locally assembled systems is to encourage the spread of local assembly kits. This encouragement can be from a local government or an external organisation by contributing of funds, training or assembly kits. Once a locally assembled kit is properly regulated and ingrained within a country’s renewable energy strategy, components of the kit can also be manufactured locally. [[Local Manufacturing of Solar Systems|Local manufacturing]] is more likely to be successfully undertaken in developing countries that have a well-developed industrial infrastructure sector (such as the&nbsp;[[Philippines Energy Situation|Philippines]]) while less industrialised developing countries (such as [[Zimbabwe Energy Situation|Zimbabwe]]) are less likely to have the manufacturing capacity and will therefore be more reliant on importing kits to be locally assembled in their entirety<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.</span><ref name="Gerald Foley (1995) Photovoltaic Applications in Rural Areas of the Developing World, 23-304">http://bit.ly/2qSgf51</ref>

Another method of encouraging locally assembled systems is by reducing or abolishing import duties and taxes on the incoming kits. While this will reduce the overall cost of the locally-assembled kits, it could potentially hinder efforts to establish local production<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.</span><span style="color:#FF0000"><ref name="Gerald Foley (1995) Photovoltaic Applications in Rural Areas of the Developing World, 23-304">http://bit.ly/2qSgf51</ref></span>


= Experiences with Locally-Assembled Systems =

== <span style="background-color: initial; font-size: 19.04px;">Solar Lamps</span><br/> ==

[[Lamps and Electric Appliances|Solar lamps]] aim to replace less efficiency, fossil fueled lighting technology such as kerosene lamps. While there are different varieties of solar lamps, the majority are relatively simple and therefore have a high potential to be locally-assembled. Moonlight is one example of a locally-assembled solar lamp that has been successfully distributed to 12,000 households in Cambodia with the help of the World Bank. This lamp is waterproof and the solar panel can be detached and charged outside while the lamp component remains safely inside. The Moonlight is able to produce a maximum of 30 lumens for 4 hours and 40 hours of lights at a lower lumen intensity.<ref>Energy Map, 2017, http://energymap-scu.org/kamworks/</ref><br/>

Locally-assembled AC lamps are being promoted throughout Ghana by the African Rural Energy Enterprise Development (AREED) Program. These locally-assembled lamps are comparable with those currently being imported.<ref>ESMAP, 2006, Ghana: Women’s Energy Enterprise Developing a Model for Mainstreaming Gender into Modern Energy Service Delivery, p. 18, http://documents.worldbank.org/curated/en/674391468253461851/pdf/383420GH0Women10enterprise0ESMAP196.pdf </ref> Ghana is also focusing on locally-assembled and manufactured organic PV systems (OPV). &nbsp;The government is primarily aimed towards the local manufacture of solar components. However, there are concerns over meeting international manufacturing standards and as of 2016, a low awareness of the technology.<ref>DTU, 2016, Exploring product development possibilities and alternative uses of PV solar cells in Ghana, pp. 7 and 23, http://orbit.dtu.dk/files/126233266/Final_report_05092016.pdf </ref><br/>

== PicoPV ==

[[Market Trends in the PicoPV Sector and the Role of Development Cooperation|PicoPV systems]] refer to mini solar appliances such as mini reading lamps, torches, multifunctional devices as well as micro-solar home systems. They are particularly useful on a household level and are being locally-assembled by a number of companies in developing countries. Fosera Manufacturing PLC is an one example of a locally-assembled PicoPV. The Ethio-German Joint-Venture aims to increase the distribution of solar systems in rural Ethiopia while also seeding the [https://energypedia.info/index.php?search=Ethiopia&button=&title=Special:Search Ethiopian solar] industry.<ref>A local assembly line for pico solar electrification products, 2013, https://vc4a.com/ventures/fosera-manufacturing-plc/</ref>

== Locally-Assembled Cookstoves<br/> ==

One example of a locally-assembled cookstove is the atmosfair-ENEDOM Save80 Stove. The Save80 Stove is manufactured in Germany but locally assembled in Kigali, [[Insert References|Rwanda]]. It relies on fuelwood for household cooking needs but the amount required is reduced by up to 80% compared to traditional fires. As of 2011, Save80&nbsp;Stove&nbsp;could only be purchased in Germany, however, as the initiative scales it is likely that local manufacturing will occur. The Save80 Stove has a relatively large value chain, impacting&nbsp;the purchase, transport, drying, and retailing of improved fuelwood. The oversight of this value chain by ENEDOM aims to reduce the large inefficiency previously prevalent at each stage in the value chain. For example, by providing the&nbsp;Government of Rwanda an estimation of the fuelwood demand created by Save80, the use of large, public plantations for sustainable fuelwood harvesting may be considered over the private, small-scale forest owners that are currently being utilized. This will result in greater autonomy, price stability and may reveal opportunities to link the benefits of REDD+ finance directly to issues of energy poverty.<ref>Raouf Saidi and Rahul Barua, 2011, Markets for clean cookstoves: A think piece for development cooperation positioning, https://www.ecn.nl/docs/library/report/2011/b11023.pdf#page=71</ref>&nbsp;Although a 1991 financial analysis showed that locally assembled renewable energy technology were &nbsp;relatively expensive, even&nbsp; 25 years ago financial savings were made from the substitution of kerosene and disposable batteries.<ref>F.D.J. Nieuwenhout, 1991, Status and Potential of Photovoltaic (PV) Systems in Rwanda, ftp://ftp.ecn.nl/pub/www/library/report/1991/c91058.pdf</ref>&nbsp;

The Berkeley-Darfur Stove is another cookstove version that can be locally assembled.&nbsp;The Berkeley-Darfur Stove was created as a reaction to the recent conflict in Darfur killed at least 300,000 people, forced more than two million people from their homes, and led to an unraveling&nbsp;of livelihoods. The Berkeley-Darfur Stove became popular in displacement camps where there was a severe shortage of fuel-wood. The stove aimed to reduce the financial burden, reduce smoke inhalation and the potential exposure to violence during fuel-wood&nbsp;collection.<ref>http://Technology Exchange Lab, 2016, Berkeley-Darfur Stove Potential Energy, www.techxlab.org/solutions/potential-energy-berkeley-darfur-stove</ref>&nbsp;<br/>

Training has been provided to local operational expertise and the [[Sudan Energy Situation|Sudanese government]] allows the importation of the stove at a negotiated tariff. The manufacturing process is undertaken in India to ensure costs are kept low. &nbsp;<span style="font-size: 13.6px;">A video of the assembly process can be viewed&nbsp;</span>[https://www.youtube.com/watch?time_continue=4&v=JRgvwnjFek8 here]<span style="font-size: 13.6px;">.</span>

<span style="font-size: 13.6px;"></span>Makobu Enterprises is another example of a locally assembled cookstove enhancing rural regions both economically and socially. These stoves bring employment to Tulubolo (a village 81 km West of Addis Ababa) through the development of a small industrial area that produced approximately 50 stoves per day as of May 2008. Makobu Enterprises distributes their stoves throughout rural Ethiopia, including to the refugee community. Not only this, but Makobu Enterprises employs four members of the refugee community and invites all refugee community leaders to stove training sessions to ensure correct usage of the stoves. The quality of stove production is regulated and every stove has a serial number.<ref>Clean, safe ethanol stoves for refugee homes https://www.projectgaia.com/files/AshdenAwardsCaseStudy.pdf</ref><br/>

Further benefits and potetnial challenges of using improved cookstoves in refugee camps has been outlined by energypedia and can be found [[Cooking Energy in Refugee Situations|here]].


= What Impacts do locally-assembled Systems have on Businesses and the Local Economy? =

<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">The impact of locally-assembled systems on local businesses and the local economy are varied. To a large extent, the economic impact of locally-assembled systems is steered by the policies of the national and regional governments. For example, while eliminating import taxes on locally assembled kits is likely to reduce the overall cost of the kits, increase productive use (potentially also boosting the local economy) it could potentially hinder efforts to establish the local production of solar energy.&nbsp;Encouraging the region to manufacture the kits or components of the kits is likely to further economic growth. However, many developing countries do not have an industrial sector well established to ensure reliable production. An inept industrial sector or insufficient regulation could lead to ineffectual locally-assembled or manufactured.&nbsp;The economic success of locally-manufactured components is also dependent on the cost of production<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.</span><ref name="Gerald Foley (1995) Photovoltaic Applications in Rural Areas of the Developing World, 23-304">https://books.google.at/books?id=rW6-1Ic0VGEC&pg=PA70&lpg=PA70&dq=locally-assembled+PV+systems&source=bl&ots=JxrDB2NRgS&sig=pvANNHUyA3kDHDgpUuZ0x8QM_wE&hl=de&sa=X&ved=0ahUKEwjOpY6_y7rTAhUPalAKHe8qAmsQ6AEIQDAD#v=onepage&q=locally-assembled%20PV%20systems&f=false</ref><span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">&nbsp;</span> </span><br/>

<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">For example, although</span><span style="font-size: 0.85em;"></span><span style="font-size: 0.85em;"></span><span style="font-size: 0.85em;">&nbsp;</span>[https://energypedia.info/index.php?search=Turkey&button=&title=Special:Search Turkey]&nbsp;<span style="font-size: 13.6px;">previously had a policy that favoured locally manufactured components, the locally-assembled components were still uncompetitive due to the 20-25% higher production cost<span style="font-size: 11.56px; background-color: rgb(255, 255, 255);">.</span><ref>Karl Mallon, 2006, Renewable Energy Policy and Politics: A handbook for decision-making, http://bit.ly/2pcmTFY </ref><span style="font-size: 11.56px; background-color: rgb(255, 255, 255);">&nbsp;&nbsp;</span></span>

By considering certain factors, governmental institutions and major energy stakeholders can enhance the economic benefits of locally-assembled renewable energy kits and minimise the&nbsp;[[Risks in Energy Access Projects|potential risks]]<span style="font-size: 0.85em;">.&nbsp;</span>

<br/>

Some of these factors include:<ref>Experimental policies, 2017, https://www.apricum-group.com/pv-module-manufacturing-becoming-local-business/</ref><ref>GTZ, 2010, What difference can a PicoPV system make?, pp. 11-12, https://energypedia.info/images/3/3b/Gtz_picopv_booklet.pdf</ref>

*The current demand for energy within the country / region
*Whether off-grid or on-grid technologies are better suited to the regions requiring more energy services
*The cost of locally assembled products compared with products assembled abroad
*The certifications, Guarantees, and warranties provided by the locally-assembled kit manufacturer compared with products assembled abroad
*The current import taxes and whether they should be reduced or whether subsidies should be provided (this will also impact the cost of the locally assembled kit)
*How the product will be disseminated throughout a particular region or the entire country
*The current level of industrial infrastructure and whether some components of the locally-assembled kit can also be locally produced
*The availability of raw materials (cells, glass, backsheets, encapsulants, etc.) if components will also be locally assembled
*The number of locally assembled kits likely to be installed annually over a set period of time (e.g. 5 years)
*The training required for locally-assembled kits to be as efficient and productive as possible<br/>

If initiated thoughtfully and in the right economic conditions, locally-assembled renewable energy technology not only provides all the benefits of regular off-grid systems, but also has the potential to have further positive impacts due to the reduced cost of the kits, increased training opportunities and longer value-chain share.

= Anticipated Uptake and Impact of Locally-Assembled Systems =

Several assumptions can be made that may increase the demand for locally-assembled renewable energy systems.

*A major driver for locally-assembled kits is the potential for greater consumer affordability<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.<ref>Karl Mallon, 2006, Renewable Energy Policy and Politics: A handbook for decision-making, http://bit.ly/2pcmTFY </ref></span>
*Increased awareness about the potential business opportunities and domestic economic benefits of locally-assembled systems is likely to increase the rate of dissemination.<ref>Pia Henoch and Jessika Steen Englund, 2015, Investigating Technological Complexity in the Design of small-scale, off-grid Photovoltaic Systems in Rural Tanzania., http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1015.9725&rep=rep1&type=pdf</ref>
*As locally-assembled kits increase in popularity, the feasibility of locally-manufactured components will also increase<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.<ref>Pia Henoch and Jessika Steen Englund, 2015, Investigating Technological Complexity in the Design of small-scale, off-grid Photovoltaic Systems in Rural Tanzania., http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1015.9725&rep=rep1&type=pdf</ref></span>
*Developing countries that have a small industrial sector are likely to initially benefit more from importing locally-assembled kits, rather than locally-manufacturing components.<ref>https://www.apricum-group.com/pv-module-manufacturing-becoming-local-business/</ref>
*Locally-assembled kits are likely to increase in prevalence with reduced import tariffs (however, this may decrease the country’s viability to locally-manufactured components)<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.<ref>Pia Henoch and Jessika Steen Englund, 2015, Investigating Technological Complexity in the Design of small-scale, off-grid Photovoltaic Systems in Rural Tanzania., http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1015.9725&rep=rep1&type=pdf</ref></span><br/>
*<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);"><span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">Locally-assembled kits are likely to be more successful with greater assembly-training and regulation as this is likely to improve the efficiency of the kits<span style="font-size: 13.6px; background-color: rgb(255, 255, 255);">.</span><ref name="Gerald Foley (1995) Photovoltaic Applications in Rural Areas of the Developing World, 23-304">https://books.google.at/books?id=rW6-1Ic0VGEC&pg=PA70&lpg=PA70&dq=locally-assembled+PV+systems&source=bl&ots=JxrDB2NRgS&sig=pvANNHUyA3kDHDgpUuZ0x8QM_wE&hl=de&sa=X&ved=0ahUKEwjOpY6_y7rTAhUPalAKHe8qAmsQ6AEIQDAD#v=onepage&q=locally-assembled%20PV%20systems&f=false</ref></span></span>

= Conclusion =

In summary, locally-assembled renewable energy kits can provide a cheaper, more sustainable source of energy to developing countries and rural populations. Ensuring the kits are regulated and local employees are trained to assemble the kits correctly is vital in ensuring their efficiency and continued dissemination. The economic benefits of the locally-assembled kits are highly dependent on the policies implemented by the government (e.g. import tariffs). The success of locally-manufacturing components of the kit is also dependent on the local industrial sector, expenses and parameters.

= Further Information =

*Please click [http://energymap-scu.org here] for more examples of locally assembled renewable energies around the globe.

= References =

<references />

[[Category:Solar]]
[[Category:PicoPV]]
[[Category:Financing_and_Funding]]
[[Category:Impacts_Social]]