5.2.1. Off-Grid Planning Approaches

Although the market—and socio-economic conditions vary among SSA countries and the development of MGs in Zambia with regard to scale is still at a rather early stage, an energy project that aims to be sustainable requires an individual extensive planning process that closely involves the local communities [25]. These processes are complex and cost- and capacity-intensive which in turn have significant cost implications for the project development and the energy tariffs of the system that have to be charged to achieve financial sustainability which is often unaffordable for the local rural consumers. The tariff overview of Mpanta and Sinda MGs reveals significant differences in the energy tariff structures. While Sinda MG applies a pre-metered flat fee for all customers, Mpanta has a staggered tariff scheme. Despite the average household tariffs being much lower in Mpanta, the reports of paymen<sup>t</sup> problems and customers getting disconnected are much

higher in Mpanta and in Sinda which might be due to variations in the socio-economic parameters of the community and indicate high in-country discrepancies between rural communities with regard to energy affordability.

This finding generates two important implications. First, energy research and data collection are usually focused on urban versus rural divides in developing contexts. This analysis however shows, that for community energy research, a more granular analysis of inter-community conditions in rural settings can provide important insights for the deployment and function logic of decentralized energy systems as socio-economic rural community structures are not homogenous in a country. Secondly, in the context of energy system development, this data can serve as a baseline for the sizing of the RE systems and the energy tariffs that can be charged in rural contexts. The size of the MG system must be based on the energy-utilisation potential of the energy generated as unsold kWh are revenue losses. The stocking of spare parts instead can reduce downtime and limit revenue losses if maintenance is required and the system can be upsized if energy demand and income situation improve in the future, for example through the productive use of energy [25]. However, the technical and financial optimization potential is limited and even the bundled deployment of MGs which can further reduce maintenance costs to some extent might not achieve substantial kWh retail price reductions to match affordability levels. Interviews among developers revealed that the current average solar PV MG tariff in Zambia charged is between 0.40 to 0.49 \$ per kWh. A cost-reflective RE MG tariff for a system of the Mpanta or Sinda size below 0.30 \$ per kWh appears to be unrealistic, even with a further decrease in component prices at least for the near future and in similar contexts.
