Topic: Energy
Geographic Area: Tuvalu, South Pacific Islands
Focal Question: How can institutional systems be used to aid in the implementation of solar systems in South Pacific islands?
Source:
(1) Liebenthal, Andres et al. Solar Energy, Lessons from the Pacific Island Experience. World Bank Technical Paper #244 Energy Series. World Bank Washington, D.C.: May 1994
Reviewer: Peter A Luber, Colby College '96
Review:

Introduction
Following the oil crisis of the 1970's energy experts began to explore the viability of solar energy as a substitute for petroleum-based fuels. This was a major step forward in the movement toward a sustainable energy source. Although solar-energy performance has mixed, and its use in industrialized countries has been minimal, recent developments have lead to promising results in some rural Pacific island regions. Pacific Island Experience have proven solar energy is a viable source of energy for electrification increase with low load energy density. Interestingly enough, success was not a result of superior technology, but rather changes in the institutional structure. Cooperative owned systems have lead to the proliferation of photovoltaic systems in the Pacific islands. This case study focuses specifically on the country of Tuvalu.
Energy In The Pacific
Despite a new focus on renewable resources during the 1980's, demand for petroleum grew at an average rate of 5% and reached 7% in the early 1990's. Most mainland electrification in the Pacific Islands is done by diesel grid-based systems. But due to increasing fuel costs, insufficient funds, and rising operating costs, moves were made to electrify rural parts of the island by way of solar energy. One of the most successful experiences with solar electrification came in Tuvalu.

Solar Energy in Tuvalu, A Question of Institutional Structure
Although early experiences with solar energy suffered from many technical problems ranging from reliability of inappropriate design, unreliable components, inproper installation, and poor maintenance, the main impediment to installing the photovoltaic system was developing an appropriate institutional approach. After years of trial and error, using incongruous government -owned and installed systems, and various ineffective individually owned and maintained systems, the most serviceable system was Tuvalu developed, a cooperative-owned-installed, and periodically maintained system. The utility owned the project hardware and maintenance was provided on a fee-for-service basis. The system was devised and run by the Tuvalu Solar Electric Cooperative Society (TSECS). After trying many different systems the TSECS is now able to provide phototvoltaic based electricity for about 300 households.

The System: Reasons for Success
(a) Good maintenance, provided by local technicians and the use of visiting senior technicians.
(b) Good rate of fee collection by an impartial organization based outside the community. and use of fees exclusively for the solar energy project.
(c) Use of committees as arbitrators for all problems.
(d) TSEC's exclusive focus on the Photovoltaic System.
(e) Flexibility-modular system available to meet the custom needs of customers.
(f) Continuous training of technicians.
(g) Available external help to support with design and training (European Community).

Sources and Uses of Revenue
In 1992 TSECS membership costs was 50$A (40$ US). Monthly fee of 6.25$A (5.00$US) for a single panel system and 7.60$A (6.10$ US) for a two-panel system. TSECS earned enough from these fees to keep the system running, but it was not enough to expand the system. The fee-based approach required the utility to own and maintain the small-scale photovoltaic system. A trained staff of technicians and a collectors appointed by committee would regularly visit customers to maintain and repair the system, and collect the service fee. The fee is used to pay for the utility's operating costs and help cover the initial capital investment. A headquarters office has the responsibility of managing the accounts, inventory, and training.

Cost Comparison of Solar System to Diesal System
Case	Solar PV	Diesal	% Difference
Household Lights Only:
Customer: Initial appliance costs	132	51	159
Customer: Future appliance costs	133	21	533
Generation equipment: initial costs	741	750	-1
Generation equipment: future costs	243	189	29
O&M costs	137	593	-77
Total	1386	1604	-14
Household Lights & TV/VCR:
Customer: Initial appliance costs	732	551	33
Customer: Future appliance costs	476	307	55
Generation equipment: initial costs	2216	1719	29
Generation equipment: future costs	454	432	5
O&M costs	137	1255	-89
Total	4015	4264	-6
Household Lights & Refrigerator:
Customer: Initial appliance costs	1332	953	40
Customer: Future appliance costs	452	275	64
Generation equipment: initial costs	4436	1875	137
Generation equipment: future costs	1461	472	210
O&M costs	137	4335	-97
Total	7818	7910	-1
Note: Discounted present value of costs in constant dollars for 15 years at a 10 percent discount rate.

Conclusion
The move to sustainable development is a long and arduous process. Renewable energy sources are constantly fighting the battle of cost-competitiveness, reliably, and efficiency. Solar energy is a clean renewable resource which theoretically is a sensible solution to replacing fossil fuels. But in reality photovoltaic systems have struggled with high costs and technical inadequacies. Yet with creative management and institutional structuring solar systems can be cost competitive and in some cases cheaper than the alternative. The experience of Tuvalu in the Pacific islands indicates that for electrification in areas with low load density and managed growth solar energy can be a very reasonable solution. Evidence from the Tuvalu study shows that the system's success is contingent upon appropriate design, proper instillation and adequate maintenance. These qualifications were easily reached in Tuvalu by using a cooperative fee-for service system, where the co-op ran the system and the utility owned and delivered maintenance on a fee-for service basis. A cost analysis of the system shows that not only is the system cost-competitive, but in most cases it is cheaper than the traditional diesel grid-based systems, environmental costs not considered. It is obvious that solar energy's environmental costs are negligible compared to the enormous costs associated with fossil fuels. Future considerations will require figuring a way to increase revenues so as to cover costs of future systems. For now the experience in Tuvalu is an encouraging step toward sustainable development, with the implementation of an environmentally conscious renewable energy source.