Is solar energy the answer to Georgia’s energy challenges?

Georgia is investigating ways to use solar energy to power the country, reduce its dependence on finite resources and offer a renewable energy solution to the thousands of people in Georgia who continue to live without power.

Startling research by local consulting firm PMCG said Georgia had one of the highest sunshine levels of all European countries and the state could use this huge solar energy potential to help the local population and industries power their homes and businesses.

Solar energy is radiant light and heat obtained from the Sun. The PMCG research Georgia was rich in this renewable resource.

The data revealed the amount of solar radiation experienced in Georgia (1,000-1,600 kilowatt/hour) was higher than the average amount experienced in Europe. Furthermore, Georgia enjoyed a higher number of sunshine days than many other countries. Of the 365 days each year, Georgia enjoyed between 250 and 280 sunshine days, basking in about 2,000 hours of sunshine. This sunlight could be turned into solar power and used as an electricity source, said PMCG.

The agency claimed Georgia could benefit greatly if it best utilised solar power, and suggested installing solar panels in small enterprises in Georgia. This initiative could then expand to households and larger businesses around the country.

The PMCG report discussed ways how Georgia could best generate power from the Sun, based on the experiences of Germany, France and Italy. The report claimed initially it was imperative to make the technology affordable, and create tax incentives for parties who imported solar power technologies.

Thre research said, of the 365 days each year, Georgia enjoyed between 250 and 280 sunshine days, basking in about 2,000 hours of sunshine. Photo by N. Alavidze/Agenda.ge

The research proved Georgia has great potential to generate power from solar energy, but the next question remains – how should the state support development of the solar energy sector?

Solar energy – how costly is it?

Solar energy is becoming a popular energy source around the world, mainly due to the fact it is a renewable energy source, it is abundant and cost-effective.

Year-on-year the cost of electricity continued to grow in Georgia and around the world, and the authors of the PMCG report believed this trend would increase in the future.

One of the research authors, economist Levan Pavlenishvili, agreed it would cost the country a significant sum to buy the new technologies and develop a solar energy sector in Georgia, but the results would be worth it.

First of all the whole world is trying to use renewable energy and it is good to follow this direction,” he said.

Secondly, developing this renewable energy sector enables Georgia to not only to produce its own energy from a renewable source but encourages the establishment of a solar panel-producing industry, because of the cheap labour force and because Georgia is very close to the solar energy potential of the Middle East.”

Pavlenishvili claimed there were two ways Georgia could support the development of a solar energy system; one was to subsidise costs and the other was to issue cheap loans for users.

Year-on-year the cost of electricity continued to grow in Georgia and the authors of the report believed this trend would increase in the future. Photo by N. Alavidze/Agenda.ge

About $860-1,230 USD per one kilowatt was the subsidised price for Georgia, which the report said was "too high for the budget”, so Pavlenishvili and the other experts suggested it was best to offer a cheap loan program instead.

Subsidising is very expensive for the country so we do not recommend doing this as a way of support. We think it is much more preferential to offer indirect benefits such as tax exemption and cheap loans, which the state can issue together with donor organisations,” Pavlenishvili said.

The research suggested the following action: 

• Those who import solar power technologies should be exempt from Value Added Taxes (VAT);
• Those who own property equipped with solar energy infrastructure should be exempt from Property Tax;
• Income tax should be reduced from 20 to 15 percent for one member of each household; and
• Profit tax should be reduced by 15 to 10 percent for businesses.

The benefits of solar energy

The most important benefit Georgia could receive from developing a solar energy sector was eradication of its energy dependence on finite resources and ensuring all the population had access to a reliable power supply, explained Marita Arabidze of Georgia’s Ministry of Energy.

There are dozens of villages in Georgia where people still live without power. In these villages we could develop a solar energy plan first then expand it across the country,” she said.

"But the problem is that we cannot offer any specific project to investor as we do not have a feasibility study. Moreover, we do not have a map showing the exact places where radiation is high,” said Arabidze.

"Luckily a Spanish company offered to carry out research for us and create a map of places where it is possible to capture and generate solar energy. Once we have this research we will be able to offer investors more specific information,” she added.

Georgia, which now followed the Euro-integration policy, should do its best to establish a renewable energy policy in the country. Photo by N. Alavidze/Agenda.ge

Arabidze though it was the right time to start developing a solar energy system in Georgia, as the price of "proper technologies” was reasonably affordable.

Now the technologies are cheaper and much more affordable to purchase. Also the solar energy storage technologies are developing, allowing people to use solar energy for 24 hours a day,” Arabidze added.

Renewable energy and EU requirements

Since Georgia signed its Association Agreement (AA) with the European Union (EU), it was obliged to meet various requirements in a range of fields, including renewable energy directives.

The EU established an overall policy for energy production and promotion of renewable resources in the EU. It required all EU countries to fulfil at least 20 percent of their total energy needs from renewable sources by 2020 – to be achieved through the attainment of individual national targets. By 2020 all EU countries must also ensure at least 10 percent of their transport fuels came from renewable sources.

Georgia, which now followed the Euro-integration policy, should do its best to achieve these targets and establish a renewable energy policy in the country.

We should not forget that we have EU requirements. If we want to join the Energy Union we should obey the directive about renewable energy, which says renewable energy must be included in the country’s energy balance. So in the near future developing a solar energy system in Georgia will be one of the obligations of our country,” Arabidze said.