The electricity grid can have a dramatic effect on any real estate market as extending a power supply line – even for a short distance – can cost developers and inhabitants more than they bargained for. The Ugandan government had promised to connect private residential areas to water, road network, and electricity, but many are still awaiting results.
While hydropower is the cheapest source of renewable energy, solar energy is making headway as its longevity is far greater. Solar Energy for Africa, one of the firms that deals in solar panels, sells its smallest home solar electric system at $195, according to officials. Once harnessed, solar energy can help real estate developers significantly cut down on operational costs and increase on their profit margin.
This is because it is bought by individual residents, does not require a grid network or monthly service and consumption fees, and can function up to 20 years without developing major defects.
PostBank, under their Rural Electrification Initiative, has taken advantage of the increasing popularity of solar energy usage to unveil packages for home owners and real estate developers. Akright Projects was the first real estate firm to benefit from this arrangement as the deal had PostBank providing solar panels to about 300 Akright Kakungulu Satellite city residents.
"On top of helping people save on what they spend on energy, they will overcome loadshedding by having a reliable source of power," Anatoli Kamugisha, the Akright Projects managing director, said.
Samuel Okello, PostBank’s relationship officer, said their solar loans, which have a 30% government subsidy, were re-payable in 36 months.
Although the supply of solar power can fluctuate depending on the amount of sunshine, it’s highly reliable especially in countries like Uganda with a tropical weather pattern. However, the cost could prove a huge deterrent as it is still expensive for most consumers in Uganda. Many suggest a government subsidy in order to combat the perceived high start-up costs of solar energy.
"We want to bring down electricity prices by 50% in a bid to lower the cost of production and make power affordable for the masses," said Hillary Onek, Minister of Energy, adding, "We are re-examining the current electricity tariffs and our target is to reduce the prices by half," he said recently.