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Poverty-alleviation programs using solar energy (PAPSE) are poised to unlock unprecedented capital investments with significant potential to reconcile the energy–poverty–climate nexus. These programs are economically feasible because the costs of generating renewable energy have declined precipitously over the past decade; between 2010 and 2019, solar photovoltaic costs decreased by 82%. Furthermore, the number of annual equivalent-use hours of sunlight in most countries exceeds 1200, meaning that PAPSE approaches are feasible in many places and can be undertaken independently from the power grid.
However, programs that rely heavily on electricity sales without other collaborative means of making a profit result in only a limited increase in households’ incomes. Indeed, the degree to which such efforts succeed in reducing poverty has been largely over-estimated, with two key barriers holding things back. First, as photovoltaic power-generation technology has advanced, many countries—including Germany, Sweden, and the Netherlands—have started or begun planning to reduce or cancel solar photovoltaic feed-in-tariff subsidies. For example, China has imposed regulations on photovoltaic power programs to achieve grid parity, a critical consideration of the cost effectiveness for solar technologies.
Second, land-use policies often limit the prospects for expanding photovoltaic power. Some countries restrict the land leasing or land acquisition needed to install photovoltaic panels at scale. Under Japan’s Agricultural Land Act, solar power is restricted from occupying agricultural land; a revised version of the regulation includes a requirement to dismantle facilities that have been found to have a negative impact on agricultural output. In India, land acquisition is one of the major challenges for large-scale projects above 100 MW. India’s approval process for land transactions is slow.