Can Solar Energy Reduce Costs for Rural Water Projects?

Several rural water projects in Honduras have proven that investing in solar energy can reduce operating costs by up to 81%. In Honduras, the Inter-American Development Bank recently launched a Rural Water Program, which aims to improve the capacity of existing potable water and basic sanitation in rural communities with less than 2,000 inhabitants. Switching from the power grid to solar energy created a significant reduction in operating costs, which contributed to the sustainability of the system and the services provided.

Seven communities in southern Honduras located in the Corredor Seco were chosen to participate in the project. These communities, located on the Pacific coast, are some of the poorest of Honduras. It is important to note that Honduras has suffered extreme weather events, including droughts protracted country. Many communities have long requested water and sanitation projects from national authorities, with little response.

We used an alternative method of contracting to meet the urgent situation in the field. We tested a design and construction contract (D + C), and added in support in the post-construction phase for one year (D + C + A). The program awarded through competitive processes 2 packages or works contracts, one in the North of Honduras (9 communities) and one area in the south (8 communities) for a total value of US $ 3 million. This latest package, to be developed in the area with the worst drought in the country, is where we incorporated the use of solar photovoltaic technology to pump underground water, which was the only viable alternative. The procurement method created the conditions to react to lower solar technology prices, which happened in the last two years, right at the end of the design phase. The ability to explore different technological alternatives was possible because the contractor was free to propose solutions and concentrate on providing the level of service required.

The recommendation to replace the alternative network connection (in several cases it was necessary to build connections to the closest power line) with self-generated solar power was made possible by the project’s contracting scheme. We were able to implement changes in the design and reduce costs significantly by installing solar energy. The flexibility of this proposed implementation scheme would not have been possible via a traditional contracting method.

To meet the urgent needs of these communities, the use of photovoltaic solar technology groundwater pumping was incorporated into the project. The project provided equipment and training to the communities, which were represented by the local Water Committees in the operation and maintenance of equipment.

We learned several important lessons from this project:

• The project has provided water to 752 households since July 2015.
• Incorporating a solar energy self-generation component reduced project operating costs by 70% to 81%. This saving contributed to improving family finances by reducing the impact of electricity service costs, which often represent a major burden for members of the community. The use of solar systems to supply water pump projects and self-generated solar energy sources represented a slight increase in the contract budget, but it was offset by the self-production of energy. It took six years to recover the initial investment in self-production and it had an internal return rate of 15%.
• The installation of the systems reduced the purchase of electricity and it decreased the emission of greenhouse gases by CO2 2,500 tons during the lifetime of the solar system.

Training the community to manage the solar systems helped community members to solve problems that could arise when operating the systems. Officials from the regional water and sanitation offices supported the project by providing technical assistance. The solar solution provides communities with autonomy and independence.

This rural program is the first of its kind in Honduras that uses solar energy to supply water to communities. It has the potential to be an integral part of the solutions provided by the State, especially in areas with economic and environmental problems. It also has significant economic benefits and contributes to