Photovoltaics is considered one of the most expensive renewable energy technologies. This assessment is not entirely wrong, because the energy produced from photovoltaic systems (excluding subsidies) costs around 0.2 to 0.4 € /kWh.

However, some publications consider that the use of photovoltaic technology as an interesting and low-cost option for the developing world. How does one reconcile this apparent contradiction? The office Ö-quadrat was commissioned by the Carl Duisberg Society to create a cost-benefit analysis of solar street lighting compared with conventional street lighting in rural areas of South Africa. The study was conducted in spring 2001 on location.

The study considered a village where no electric power currently existed and a connection to the existing network outside of the village would be necessary. For this case, it was determined that the overall costs of conventional street lighting would be about a factor of two to three times higher than the cost of solar street lighting.

More generally, it was determined that the economic advantages of solar lighting relative to conventional lighting depended on three factors:

1. the distance required for grid connection,

2. the specific costs of wiring (depending on the terrain structure), and

3. the size of the illumination system (or the amount of electricity consumed)

It is also important to consider in such analysis the projected rise in energy demand, since a large future consumption at the village level will shift the break even point in favor of a grid connected system as opposed to a solar power scheme. South Africa has big plans for a low-cost electrification of rural households, and it is expected that there will be a rapid expansion of solar energy in some rural areas of South Africa.

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