Cost-effective energy billing mechanisms for small and medium-scale industrial customers in Uganda

Abstract

Many African countries are facing an astronomical rise in electricity tariffs resulting in the shutdown of many promising small and medium-scale enterprises (SMEs). Increases in energy costs get reflected in the cost of production of goods and services making some local products even more expensive than the imported goods. This study finds an alternate cost-effective energy billing system for SME industrial customers to lower their cost of production. As a case study, a solar hybrid system of a coffee processing industry in Uganda is designed. The system is compared with the existing grid backed-up with a generator and the grid alone systems. From the analysis, the coffee factory had huge savings within one year reducing the simple payback period by 5 years. The findings of this study suggest that for sustainability and long-term growth of small and medium scale enterprises, distributed generation systems with net metering mechanisms are the most economical energy supply systems in Uganda. Other African nations with similar energy resources and challenges can support the development of their SME sectors through the establishment of net metering policies to enable a cost-effective energy billing system.