Africa’s Solar Costs Remain High as EPCM Model Uses Local Labour to Cut Project Costs
Independent engineering consultancies are challenging the traditional turnkey Engineering, Procurement and Construction (EPC) model in Africa’s utility-scale solar sector, with a focus on reducing project costs through greater use of local contractors and labour.
Utility-scale solar projects in Africa cost about $1,093 per kilowatt in 2024, according to the International Renewable Energy Agency (IRENA), around 58% above the global average.
While falling module prices have reduced equipment costs, construction, financing and local supply-chain expenses continue to drive the continent’s cost premium.
Indian renewable energy engineering consultancy SgurrEnergy is promoting an Engineering, Procurement and Construction Management (EPCM) approach, in which the engineering firm oversees design and procurement while local contractors undertake construction under its supervision.
SgurrEnergy Director Arif Aga says using and training local workers could significantly reduce costs compared with bringing in international construction teams.
The company is testing the approach in several African markets. It is an implementing partner on LMI Holdings’ 200 MW Solar for Industries project in Ghana, with the first 100 MW phase expected by December 2026.
It also supports Sun Africa, developer of Angola’s completed 370 MW solar portfolio.
However, EPCM remains a minority model in Africa because lenders generally prefer traditional EPC contracts, which provide single-point accountability for construction risks. Under EPCM, responsibility is distributed among engineering firms and local contractors, making bankability a key challenge.
Namibia-based Emesco is pursuing a similar approach and has delivered more than 30 MW of solar projects across Southern Africa. SgurrEnergy has also trained local engineers in Sierra Leone, reducing reliance on external expertise.
As Africa’s solar pipeline expands, greater use of local skills and contractors could lower project costs while strengthening domestic technical capacity.
However, more projects and cost data will be needed to determine whether EPCM can consistently outperform traditional EPC contracts.