Off-grid Solar Refrigeration for Vanuatu Rural Tourism Operators

6 October 2017
Energy
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Projects

General information:

Island (Region, Province, Country):
Five different islands in Vanuatu (Santo, Tanna, Pele, Malekula, Nguna)

Population:
Santo: 40,000, Tanna: 29,000, Pele: 220, Malekula: 23,000, Nguna: 1255

Budget / cost of the project:
90,446 USD

Project objectives:
The objective of this project was to improve electricity access, reliability, and affordability for small rural tourism operators in selected off-grid sites in Vanuatu through access to refrigeration powered by solar photovoltaic (PV) systems. The project aimed to expand livelihoods through diversification of services and improved income streams for the rural tourism operators. The project also contributed to Vanuatu’s Nationally Determined Contribution and updated National Energy Road Map objectives to increase the use of renewables in all sectors and achieve 100% renewable electricity production by 2030.

Project description of activities and specific interventions:

The Global Green Growth Institute partnered with the Vanuatu Government and the Vanuatu Skills Partnership to bring solar-powered freezer systems to ten rural bungalows on five islands. Rural off-grid tourism bungalows in Vanuatu have unreliable and expensive electricity service, which limits their ability to provide amenities such as lighting, cooling, communication, and refrigeration that attract tourists and help earn additional income. It also increases transport costs for daily food purchases since food cannot be stored. Refrigeration systems enable these operators to generate more income, attract more clients, save on transport/food costs, expand their business, and create local employment opportunities.

Phase 1 of the project focused on developing a detailed model and technical design. A market study identified current income streams and system costs as well as the rural operators’ ability to pay for the systems. The team then designed solar PV systems with freezers appropriate for cyclone-prone areas and tropical operating conditions. A system was designed enabling owners to plan for making payments to private sector suppliers for repair/maintenance services. Ten tourism bungalows were identified through a multi-stakeholder process for a demonstration of the off-grid solar freezer concept as a way to increase income and long-term sustainability. Baseline surveys were done to monitor outcomes and impacts, and to identify gender roles that influenced the design of the project.

In phase 2, the ten solar PV freezer systems were procured, installed, and commissioned, using a local PV supplier to support the local services industry. Because the upfront cost of the equipment was a barrier, the bungalow owners were provided with the systems free of charge under a grant agreement with the Vanuatu Government. The owners committed to set aside funds each month in a special savings account to be used for maintenance and repair of the systems. They were trained on solar PV system installation, operation and maintenance, as well as on safely handling and storing frozen/refrigerated foods. A mission was carried out post-installation to verify operation of the systems and quantify the additional revenue earned.

Public outreach, education and awareness efforts and results:

A thorough educational program was run for the bungalow owners, beginning with an introductory briefing on solar freezer systems given during the preliminary survey. Once the owners had committed to the project, they attended a two-day workshop and were trained on operation and maintenance of the solar PV freezer system, as well as on frozen food handling and hygiene best practices. As part of the training, written guidelines for solar energy-based refrigeration system operation and maintenance were formulated and provided to the owners. Efforts were made to ensure that both women and men participated in the training, since many women are active managers of these rural business operations and are usually in charge of food preparation, while men usually carry out maintenance tasks – both areas that were very important to the success of the project. The workshops included a session on gender-specific considerations for the project in an effort to provide increased employment and income creation opportunities for women. In addition, a specific session on understanding projected productivity increases as a direct impact of the project was also held. The outputs of this session will support justification of project scale-up, and identification of appropriate financing sources in the future.

Results of the training workshops showed strong engagement by the participants, based on a post workshop survey that showed 95% of participants agreed that the workshop increased their knowledge of food handling and solar system operation, and that they have acquired new skills and knowledge that they will apply to their businesses. 38% of workshop participants were women.

Lessons learned from project implementation, operation, monitoring and evaluation were documented and shared with the Vanuatu Government and other development stakeholders in Vanuatu and throughout the Pacific region. Articles about the project were published in the local Vanuatu newspaper as well as on a regional tourism organization’s website and disseminated via social media in the wider Pacific region.

Economic value added and how calculated:

The ten-year estimated economic value of the project is USD $120,000. This is an estimate of the total additional revenue the bungalows will earn as a result of owning the solar freezer systems over a period of ten years, which is the estimated life of the freezers.

According to the post-project survey, 71% of bungalow owners confirmed that the freezers increased their business profits by more than USD 98 per month. The amount of additional revenue earned during the initial six weeks ranged from USD 59 to USD 1,324. Based on this data, we made a conservative estimate that each bungalow will earn an additional USD 100 per month, or USD 1200 per year. For ten bungalows, this will result in added earnings of USD 120,000 over a period of ten years. The actual economic value of the project will likely be higher than this estimate. The freezers could last longer than 10 years, for example, and solar PV systems generally last over 20 years. Many of the owners could be expected to use some of their savings to replace the freezer at the end of its life and continue to use the PV system to power it or purchase other solar-powered equipment to boost their businesses once they become comfortable with the new technology. There will also likely be other add-on benefits such as hiring of staff that will increase profits over time.

Ecological and social project outcomes:

The project showed positive results, with the equipment operating correctly, increased income, savings in money and time, and additional services provided to the local communities. It improved electricity access and reliability with an environmentally-friendly technology, and avoided bungalows resorting to fossil fuel generators which would have resulted in carbon and other emissions in the future. Instead, the project enabled them to access solar technology which might otherwise have been outside of their price range.

The off-grid bungalow owners in general were very appreciative to be a part of the program. As part of a post-project survey, nine of the ten owners were interviewed regarding their experience with the systems. All of the operators agreed that the solar freezers have improved productivity, increased revenue, and made work easier for both men and women. For instance, they do not need to travel as frequently for long distances to re-stock food supplies, saving time and money on transport. The project also increased knowledge and skills on operation and maintenance of PV systems and freezers as well as frozen food handling and hygiene.

While the operators’ traditional clients have been external visitors, having freezers allowed them to provide products and services to the local community, such as chilled drinks and renting out space in the freezers for food preservation. This expansion of the client base helps increase and diversify their income streams.

86% of the owners surveyed agreed that the freezers reduced costs, mainly expenses relating to transport and food. All operators interviewed confirmed an increase in income of more than 15% after receiving the freezers, all used this savings for reinvestment into the business, and 79% put aside financial savings towards maintenance and replacement parts. Two bungalows have also hired one additional worker each as a result of the increased income generated by the solar freezers.

The project also brought valuable business to the local PV suppliers, and set up a new mechanism for the owners to save money for the maintenance of their solar freezer systems.