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A Cost-Benefit Analysis of Concentrator Photovoltaic Technology Use in South Africa: A Case Study

23 April 2013
Publication Type: Working Paper
JEL Code: D61, L94, Q54

The South African government currently faces the dual problems of climate change mitigation and the rollout of electricity provision to rural, previously disadvantaged communities. This paper investigates the economic efficiency of the implementation of concentrator photovoltaic (CPV) technology in the Tyefu area in the Eastern Cape, South Africa as a means of addressing these problems. A cost-benefit analysis (CBA), both from a social and a private perspective, is carried out in the study. The CBA from a private perspective investigates the desirability of the CPV project from a private energy investor’s point of view, whilst the CBA from a social perspective investigates the desirability of the CPV project from society’s point of view. The CBA from a social perspective found that the project was socially viable and was, thus, an efficient allocation of government resources. The CBA from a private perspective, on the other hand, found that investing in a CPV project was not financially viable for a private investor. It is recommended that the government consider CPV as an alternative to grid-connected electricity provision to rural, previously disadvantaged communities.

Series title: Working paper 343
1 April 2013
Journal: Journal of Energy in Southern Africa
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