The total installed solar energy capacity in Tanzania as of 2023 is approximately 20 MW.⁶

Tanzania has signed a deal to build its first solar power station, with 150 MW solar capacity in Shinyanga region.⁷

Solar: The average levelized cost of electricity for solar photovoltaic systems in Tanzania is approximately 0.20 USD/kWh.⁸

Fossil fuel: In Tanzania, the average cost of electricity generated from fossil-fuel is approximately $0.25 USD per kilowatt-hour (kWh).

Hydropower: Tanzania’s hydroelectric power plants generate electricity at an average cost of $0.03 to $0.13 per kWh, subject to variations based on plant efficiency and maintenance costs.⁹

• Natural gas (48%)
• Hydro (31%)
• Petrol (18%)
• Solar (1%), and
• Biofuels (1%).¹⁰

While exact hours of available electricity in Tanzania are unavailable, the country’s electricity supply is unreliable and unpredictable, with frequent power cuts and rationing leading to unequal power distribution, reflecting a broader urban infrastructure challenge.¹¹

Tanzania has seen a significant increase in solar energy adoption, driven by the need for reliable power solutions. Companies like Photons Energy Ltd and ENSOL (T) LTD have installed numerous solar systems for residential and commercial clients, with Photons Energy Ltd completing over 1,000 projects.¹²¹³

Tanzania has only one solar farm planned.¹⁴

Tanzania has installed around 6 MW of solar off-grid PV countrywide, expanding renewable energy access.¹⁵

Lighting Africa is working to establish a sustainable commercial market for high-quality solar lanterns and solar home systems in Tanzania, aiming to benefit 6.5 million individuals by the end of 2019 while in the first half of 2021, off-grid solar lighting product sales reached 174,000 units, a 9% rise from the previous half-year. While cash sales held steady, pay-as-you-go (PAYGo) sales surged by 22%, fueling the overall growth.⁷

Current Capacity: As of now, Tanzania has 1 MW of installed solar PV capacity.¹⁵

Projected Demand: According to the Power System Master Plan (PSPM) 2007-2031, Tanzania aims to develop 120 MW of solar photovoltaic (PV) capacity by 2018 in the short term. Additionally, several private companies have shown interest in building solar plants with capacities ranging from 50 to 100 MW, further boosting the country’s renewable energy prospects.

The average minimum salary range for Industrial and Commercial Sectors in Tanzania is approximately $36.76-$147.04 per month.¹⁶

Tanzania’s population stands at approximately 68.77 million as of August 2024.¹⁷

The breakdown of average overhead cost of solar panel production in Tanzania include:

Labor costs:¹⁸  the labor cost in Tanzania varies depending on the industry and the type of work; Tanzania’s minimum wage is approximately $60 USD/month, effective January 2023

Utility Cost:¹⁹²⁰

• Electricity Prices:
• Industrial Sector: Approximately $62.5 USD per megawatt hour (MWh).
• Commercial Sector: Around $78.6 USD per MWh.
• Water cost: Industrial water tariffs in Tanzania, such as in Dar es Salaam $0.92 USD /cubic meter, are generally higher than residential rates due to greater demand.

These costs are estimates and can fluctuate depending on location, usage patterns, and other influencing factors.

Factory rental costs:²¹²² in Tanzania vary by location and size. Here are some approximate rates: Dar es Salaam ($4-$22 USD/sq.m/month), Arusha ($8 USD/sq.m/month).

Insurance:²³ Tanzania’s average insurance spending per capita is forecasted to be $37.40 USD in 2024.

Administrative expenses: costs associated with the management of the production process, including salaries of administrative staff, office supplies, and other general expenses, typically add up to a substantial part of the overhead.

Quality control: expenses incurred to ensure the solar panels meet performance and safety standards, including testing and inspections.

Tanzania is endowed with diverse renewable energy resources, ranging from biomass and mini-hydro to geothermal, solar and wind. Tanzania’s power sector is dominated by state-owned TANESCO (Tanzania Electricity Supply Company Limited). TANESCO owns most of the country’s transmission and distribution network, and more than half of its generating capacity. Currently, Tanzania’s total power installed capacity is 1,602 MW.¹⁰

Installed Capacity: 1,602 MW

• Hydroelectric: 568 MW
• Thermal: 951.6 MW
• Other Renewables: 82.4 MW

Tanzania’s electricity generation comes mostly from natural gas (48%), followed by hydro (31%), petrol (18%), solar (1%), and biofuels (1%). The traditional dependence on hydropower combined with the droughts that are affecting the country, often result in power supply shortages. To bridge the electricity supply gap in the country, TANESCO contracted Emergency Power Producers (EPP).

The average electricity consumption per capita in Tanzania is 108kWh per year, compared to Sub-Saharan Africa’s average consumption of 550kWh per year, and the 2,500kWh average world consumption per year. In 2019/2020, 37.7% of all households in Tanzania Mainland are connected to electricity, compared to 32.8% in 2016/17.

According to the National Census of 2012, about 70% of Tanzanians reside in rural areas whereas 69.8% had access to electricity. In rural areas, households connected to electricity accounted for 24.5% in 2019/20 compared to 16.9% in 2016/17. Therefore, the Government of Tanzania plans to increase rural connection levels to 50% by 2025 and at least 75% by 2033.

The Rural Energy Board (REB), the Rural Energy Agency (REA), and the Rural Energy Fund (REF) were established to promote, stimulate and facilitate access to modern energy services in rural areas of Tanzania.

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National Energy Policy: Updated in 2022, this policy aims to achieve a 6GW renewable energy capacity by 2025. It includes provisions to promote solar energy and other renewables.

Regulatory body: Tanzania’s energy sector is regulated by Energy and Water Utilities Regulatory Authority (EWURA), which has the authority to:

• Issue licenses for electricity supply
• Approve and enforce tariffs and fees
• Oversee terms and conditions of electricity supply
• Approve new electricity supply installations

Licensing: Tanzania’s renewable energy sector has exemptions and regulations for small-scale projects:

• Projects under 1MW are exempt from licensing, but must register with EWURA
• EWURA issues provisional registrations and licenses for small power producers (SPPs) and very small power producers (VSPPs)
• Mini-grid operators can apply to operate as SPPs, small power distributors (SPDs), or both.

Quality Standard ²⁶: Tanzania’s solar panel quality standards are regulated by the Tanzania Bureau of Standards (TBS), which:

• Adopts international standards like IEC 61853-3:2018 for performance testing and energy rating
• Requires rigorous testing and certification for PV modules to ensure compliance
• Has prepared draft standards for low voltage electrical installations specific to solar PV systems (IEC 60364-7-712:2017)
• Is updating its national quality assurance framework to align with IEC standards for pico-PV and solar home systems (SHS) up to 350 Wp

Solar panel production efforts have been further enhanced by Government support through VAT and tariff exemptions for imports of small solar products assisting companies with business models pegged to mobile phone.¹⁵²⁷

Pay-As-You-Go (PAYG) financing schemes

Decentralized renewable energy can fast-track energy access in rural villages through innovative PAYGO systems. While seven regions have high electricity access rates, five regions – Kigoma, Manyara, Shinyanga, Songwe, and Rukwa – need improvement, with access rates below 65%.

power purchase agreements (PPAs):²⁸  Tanzania’s Energy and Water Utilities Regulatory Authority (EWURA) oversees Power Purchase Agreements (PPAs) for solar energy, offering two types of agreements to support renewable energy integration:

• Standardized Power Purchase Agreements (SPPAs) for small-scale projects (up to 10 MW), providing a streamlined framework for national grid connection.
• Model Power Purchase Agreements (MPPAs) for larger projects, serving as templates for negotiations and ensuring consistent contract terms.
• Notably, TANESCO, the state-owned power utility, has recently signed PPAs with independent power producers (IPPs) for solar projects, including a 2020 agreement to purchase 19.16 MW of clean energy from six IPPs.

Government incentives:²⁴ Tanzania offers incentives for renewable energy investors through the Tanzania Investment Centre (TIC) and Export Processing Zones (EPZs), including:

• Certificates of incentives and strategic investor status for projects over $20 million
• Fiscal and non-fiscal incentives
• Streamlined permits and approvals
• Property protection and risk guarantees
• Import duty exemptions and reductions
• VAT exemptions on solar equipment
• Excise duty refunds and VAT deferment
• EPZ benefits: 10-year corporate tax exemption, customs duty remission, and local tax exemptions
• Rural Energy Fund grants and subsidies for rural projects.

Tanzania aims to attract investors and promote renewable energy growth.

Kishapu Solar Power Station:⁷

• Capacity: first phase (50 MW), second phase (100 MW)
• Location: Shinyanga region in northern Tanzania,
• Status: construction start in June 2023, to be completed within the next 12 months.

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Photons energy: Photons Energy Ltd is a Tanzanian EPC company providing comprehensive solar energy solutions, from design to operation, for residential and commercial clients. We also distribute genuine renewable energy components from global manufacturers.¹³

Ensol: Ensol provides end-to-end solar energy project development and management, from feasibility studies to operation and maintenance. Their services include energy audits, EPC solutions for various solar applications, and sustainable O&M services, ensuring optimal performance and reliability.¹²

Zara Solar offers tailored solar solutions for Tanzania, prioritizing safety and quality. Specializes in solar PV imports, sales, and installations, their off-grid systems provide clean electricity for homes and communities without reliable grid access, capitalizing on Tanzania’s high solar irradiation and vast energy needs.³⁰

Canadian Solar is a global provider of solar solutions, designing, manufacturing, and delivering high-quality solar products and systems for both grid-connected and off-grid applications, catering to customers around the world. Delivery of sustainable, high-quality solar solutions that are cost-effective and eco-friendly, driving global green development is their objective.³⁰

Solargrid Tanzania is a Tanzanian company, offers off-grid solar power products and a micro loan program in the form of a pay-as-you-go mobile plan. Products include lighting and multi-device mobile charging stations for businesses.

Solaris brings sustainable and scalable energy to off-grid households and businesses in Tanzania (Lake Region) through modular solar systems paid for through regular mobile payments.