Lifecycle Cost Analysis of Solar PV Systems for Industrial Applications in Africa

The escalating energy demands of industrial sectors across Africa, compounded by unreliable grid infrastructure and rising fossil fuel costs, have intensified interest in renewable energy solutions, particularly solar photovoltaic (PV) systems. This conducts a comprehensive Lifecycle Cost Analysis (LCCA) of solar PV systems for industrial applications in Africa, with a focus on assessing long-term financial viability, operational performance, and sustainability. The analysis encompasses all phases of the system lifecycle, including initial capital investment, operation and maintenance (O&M), financing costs, performance degradation, and end-of-life decommissioning. Key technical and economic parameters such as solar resource availability, industrial electricity tariffs, financing terms, and policy incentives are evaluated to determine their impact on system affordability and competitiveness. This applies Net Present Cost (NPC) and Levelized Cost of Energy (LCOE) methodologies, coupled with sensitivity analysis to account for variability in discount rates, component prices, and energy yields. Findings highlight that while solar PV systems require high upfront investments, they offer substantial long-term savings compared to conventional diesel generators and unreliable grid supplies. Regions with high solar irradiance and favorable policy frameworks demonstrate lower LCOE and shorter payback periods, particularly when coupled with innovative financing models such as Power Purchase Agreements (PPAs) and leasing arrangements. Case studies from Nigeria, Kenya, and South Africa reveal that hybrid solar systems—integrating PV with energy storage or diesel backup—are particularly cost-effective for industries facing frequent grid outages. Despite challenges such as currency risks, technical capacity gaps, and regulatory uncertainty, this underscores the strategic importance of site-specific system design, local supply chain development, and supportive policy reforms. Ultimately, this analysis affirms that solar PV systems, underpinned by robust LCCA methodologies, represent a technically and economically viable solution for advancing industrial energy resilience and sustainability in Africa.