Site selection is critical and many factors must be considered when making a decision.

Key criteria include:

• Existence of or distance to the national distribution grid or other mini-grids;
• Population and settlement density;
• Average income and purchasing power;
• Existing economic activity;
• Existing semi-industrials such as telecom towers;
• Renewable resources; and
• Accessibility and security

For example, solar mini-grid developers targeting towns or villages clustered closely together may be able to support a single larger mini-grid (say 1MW or above).

Those targeting individual villages may require multiple mini-grids of smaller capacity (say 20 mini-grids each with capacity of 40 to 200 kW).

Those developing DC nano-grids may have to install over 100 mini-grids of less than 10 kW to cover their fixed costs.

Stage 1

Site selection is done in stages. In the first stage, developers tend to use secondary information to identify the most promising sites. This may be GIS data on un-electrified settlements and renewable resources, data from national rural electrification plans and feedback from public officials and national distribution grid companies.

Developers should be aware that this data may not be up-to-date or reflect the reality on the ground.

Stage 2

In the second stage, developers conduct a site visit to:

• Cross-check the preliminary data;
• Establish contact with the relevant community and public bodies; and
• Assess the appetite of the community for the mini-grid.

Note developers of DC nano-grids may not initially visit all their sites, although they still need to establish contact with the community and agree contracts with end users.

Stage 3

In the third stage, developers may carry out a detailed renewable resource assessment.

This is not normally necessary for solar-based mini-grids (or DC nano-grids) because GIS data on irradiation is freely available and is usually accurate enough for the purposes of technical design of the systems.

In contrast, developers of hydro, biomass and wind mini-grids will need to undertake detailed studies of the renewable resources available locally throughout the year and, in the case of biomass, the cost of those resources.

There will often be no historical renewable resource data, in which case developers will have to run the studies for at least a year to get the required seasonal data..

Stage 4

Developers must carry out a detailed assessment of existing and potential local demand for the mini-grid.

If demand does not meet expectations, the revenue generated by the mini-grid may not be sufficient to cover the project's fixed costs or to pay for repairs or replacement parts.

Demand forecasts are particularly important for mini-grid technologies that cannot be easily scaled up or down to meet demand (for example hydro projects or non-hybridised projects that do not have the benefit of low capex diesel engines.)

Demand side management for these non-modular technologies is very important to ensure electricity demand does not exceed supply, which in turn can create potential conflict with the communities.