Solar is the “oil of the 21st century,” and the most powerful economies will be those that have the cheapest energy, says renowned African banker and entrepreneur Tidjane Thiam.
“If we don't participate in that (solar) revolution, America is going to have the cheapest and the cleanest energy in the world. There's a revolution going on in the world economy. The cost of a solar watt in 1975 was $115.30; in 2010 it was $2.70, today it’s 27 cents. It's gone from $115 to $0.27,” said Mr Thiam, a former Group CEO of Credit Suisse and Prudential Plc and now executive chairman of Freedom Acquisition Corp 1.
He was speaking at the 2023 shareholders AGM of the African infrastructure lender Africa50 in Lome, Togo, on July 3.
He compared the energy revolution with the internet one, noting that production has become decentralised and hence more accessible and much cheaper.
The Biden administration has set aside $380 billion to back solar production.
“Energy production is becoming decentralised… and that's revolutionary, because it's cheap and it's clean… If you put up solar on the roof and you buy an electric car, you're going to drive for free,” he said.
His sentiments were echoed by Dr Ajay Mathur, director-general of International Solar Alliance (ISA), a strategic partner of Africa50.
Dr Mathur noted that Africa has the best solar potential in the world, with a practical potential of 4.5 kilowatt-hour peak per day, making solar a viable alternative to meet the continent's power needs.
But they noted that investment in the sector is still negligible.
“Last year, even though globally $250 billion was invested in solar, only two percent of it came to Africa. Why? While the risk premium on Africa was relatively high, this is quite at variance with the reality: the default rates are less than two percent!”
He challenged Africa to bring down the perceived risk to attract international capital into the sector.
They urged focus on start-ups.
A start-up challenge has been started to identify 20 firms in Africa, that will provide energy at the grassroots, with emphasis being placed on solar farms to supply solar mini grids.
Mr Thiam said his company is looking for a pilot in Africa for manufacturing of solar panels.
Freedom Acquisition, a publicly traded special purpose acquisition company, has completed a venture with California-based Complete Solaria, and is looking to list on the Nasdaq Stock Market in the US on July 14.