Solar Forestry

Medium sized pv Solar Power combined with community forestry

Lord Nicholas Stern: The two defining challenges of our century are climate change and poverty. And if we fail on one, we will fail on the other. 2009

To combine the management of small and medium sized solar PV plants with community development and micro finance; to use the shade and the run-off water of solar PV panels to grow tree saplings underneath; to combine maintenance, fencing and infrastructure; to sell most of the power generated to the grid and some to pump water and use locally. See 6.2 for more synergy advantages.

This concept is the result of a lifelong interest in community development, micro-finance, design and production of wooden toys, reforestation projects.
It tries to work out solutions to the following questions:

  • How to fight poverty and climate change in one go?
  • This while empowering weak groups like the rural poor in developing countries, women, youth, tribes, refugees and nature too.
  • And to implement this in such a way to maximize the impact and minimize its carbon footprint.
  • How to channel carbon credits to the grassroots

This resulted in the ‘tree credit’ concept to pay for each tree planted a small monthly amount to the person who look after the growing tree,
organized through micro-finance structures. Background info available on request, see

A project is now being implemented in 20 villages around Trichy, Tamil Nadu, India targeting 100.000 trees, a project of the People’s Solidarity Association (PSA) :http//–of-trees/

This project will be expanded to included agroforestry (mixing crops with fertilizer trees) and with the traditional food forest (compound with mixed trees providing fruits, nuts, other food and fodder, timber, medicines, flowers and some cash crops).

1.3 Projects, which bring long term security and improve the village environment might be very popular among villagers but decentralized forestry projects are often less liked by investors……

 So, how to make the forestry project income generating from the start and so attractive for large investors

This resulted in the ‘solar farm’ concept: to use the shade and the runoff water of solar PV panels to grow tree saplings underneath; to combine maintenance, fencing and infrastructure; to sell most of the power generated to the grid and some to pump water and use locally.

This should make the project economically viable and attractive to investors.

1.4 Size matters

Recent research shows that bigger is not always better, cost per unit rises if existing powerlines are not anymore sufficient to carry the load and new ones have to be added.  Also the losses in the  internal wiring speeks for medium size solar farms.

Below see an example I worked out recently proposed to be implemented in South East Sri Lanka.

2 Outline pilot project proposal (20-05-2011)

2.1To install 25 grid tied solar power plants of about 400kW each in 25 villages,
with a total of 10MW installed power in thin film solar panels,
with a potential to generate a total 20GWh/ year = $2.4mn/ y;
as well as to develop each year 500ha of marginal land into high value food forest/ agroforestry/ timber-/ rubber-/ biomass plantation.

2.2 Aims
This community based project aims to create high value rural income and the means to revitalize 25 villages.
Local water and power supply form an integral part of the project in the form of a private/public cooperation.
This innovative project and its hardware and software needed could be exported the world over. This pilot is especially suitable for the dry zone of SriLanka

2.3 Finance
SriToys (since 1990, 250 workers) seeks $8mn in equity from investor offering a majority share in the overall $ 22mn solar farm project,
$8mn in local investment partly in shares for 50year land leases,
$5mn in soft loans.

3.0 The essence of the solar farm plan is to integrate land development in dry zone areas with the establishment of several of (small scale, <500KW) solar power plants with participation of the local communities. The shade and the security of the solar panels is used to start a tree nursery underneath.

4.1 Thin film panels are most suitable.
Thin film PV panels made from amorphous silicon are cheaper (<$1/W), more reliable (no internal connections) and perform better in hot climates than traditional solar cells; their big disadvantage is, that they take more space (50W/m2), thus are more costly to install and to maintain.

4.2 Use the shade of the panels
We are planning to turn this disadvantage into an advantage, by using the panels’ shade and allowing space in between, to develop the ground beneath. The whole fenced in area, about 4 times the total surface of the panels, will be developed into a tree nursery and vegetable garden and service roads in between the rows of panels, each 6 meters. All rain water falling on the panels will be collected and stored. If needed some power generated will be used to pump more water for the plantation and the village.

4.3 Land leased against shares
Another objective of the concept is reduce costs for land as well as security and maintenance by involving local village groups and institutions at various levels, invite those with roots in the district to invest and to give shares to land owners against lease of their under utilized lands.

4.0 Objectives

4.0 To combine the fight against poverty and climate change

4.1 To combine the planting of trees with solar power generation

4.2 To use an appropriate scale for the projects, not large scale commercial projects, but medium sized community based ones to give maximum benefit to the villagers.
4.3 To generate rural job opportunities and income and to empower even the least affluent.
4.4 To improve local water supply and infrastructure.

4.5 To improve local environment through planting of trees, parks and building well shaded schools and temples.
4.6 To further biodiversity by the planting of mixed species forests.
4.7 To plant traditional ‘food forests’ and thus improve access to food, drinks, herbs, spices, medicine, fodder, fire wood and construction materials.
4.8 To stimulate agroforestry, * “Planting nitrogen-fixing leguminous tree species, like Faidherbia or Acacia albida, in maize fields has helped achieve up to four-fold yield increases in Malawi, Zambia, Tanzania, and Ethiopia.”
4.9 Local power supply. To invest in biomass power generation.
4.10 To give people long term financial security by planting valuable timber crops.

4.11 To use existing rural structures and organisations to avoid duplication and waste.
4.12 To learn from micro finance how to service the poor while making a profit and use women as agent of (climate) change.

4.13 To develop the driest and poorest areas. In SriLanka, in Hambantota and Moneragala district.

4.14 To install 1GW power in community-based solar farms by 2025
4.15 The concept should be able to be scaled up, to have a worldwide impact on global warming.

5.0 Solar PV power

5.1 Sri Lanka is situated just north of the equator with a top level irradiance of 2300 kWh/ m2. Solar PV panel prices are rapidly reaching net-parity here. In fact for industrial use (electricity for industries is higher than for small households) it is already viable if the right feed-in tariff and import concessions are granted. A typical installation can be paid for within 5-6 years if interest payments are excluded. And expectations are that electricity prices and feed-in will rise in dollar terms.
5.2 PV systems for homes are still out of reach for most due to high retail prices for the panels, high interest rates and the need for batteries to be able to have even a light at night. Still it is attractive to own your own power supply and it increases you property value
5.3 Large solar plants (the first one in Hambantota to open soon) have the advantage of economy of scale and direct income from feeding the grid; and from professional operation and maintenance. But investments and overheads are high and internal losses of power increase with size, so that bigger is not always better. Also they take space and will replace local activities or wild life reservations.

5.4 Solar farm
That why we are working on a hybrid form, combining the advantages of both sides and on top of that facilitates the development of marginal lands into mixed production forest.

5.5 Location
To enable grid tie up, the availability of power lines in the vicinity is essential;
to locate the solar plant one or two acres of marginalized, sloping, south facing lands is needed. Try to build around existing trees and to follow contour lines to retain the water.
And more than 25 acres of barren land should be available around the village to be developed.
Further the need for improved water and power supply and the availability of a strong civil society in the village calling for improvements is an important qualification.



Both trees and solar panels are “machines” to capture and transform solar energy with a similar efficiency and use of space. Investment per acre for PV panels is at least 200 times higher than for trees. Solar panels start to produce power and income from day one, trees have to grow and only by year 5 they might produce an income, but the credits for the carbon stored in wood reach parity by year 10 with the panels per acre. And after 30 years the panels have to retire while the trees are at its prime and represent a great value.

6.3 Synergy between  solar – trees

  1. Security, infrastructure and maintanance of the solar plant and the tree nursery can be combined; think fencing (incl. elephants!), guards, excess roads, water

  1. Water management synergy: the run off water of the panels can be used to water the saplings. Some solar power, water can be pumped to be used to grow (tree) crops
  2. Financing: both solar plants as well as trees are long term investment of which the management can be shared; together they are an ideal long term investment
  3. to use the shade of (and the fencing for) the panels for starting a tree nursery
  4. solar generate a regular income of which a small part can be used to plant trees
  5. land to grow trees can be leased against shares in the solar enterprise
  6. solar is popular and attract capital, trees are much cheaper but are hard to finance
  7. carbon credits of both solar and trees can be bundled
  8. labour, mainly maintenance and guard duties can be shared
  9. initially solar income can pay for tree planting labour
  10. trees improve working conditions and local environment around the solar plant
  11. trees have many more advantages on its own.

6.3 Water and more
Most power generated will be sold to the grid, but at times that the tariffs are low, power can be used to pump water; this is vital in these semi-arid locations for agriculture and to provide the nearby village with piped water.
Power and water supply are tasks of the government. Local public/private cooperation should be considered within a full package to provide all eminities within the 25 year duration of the solar project, containing: local power and water supply, a tank and water tower, food and firewood, employment and income, 20 acres of food forest, some housing, if not a school, at least a good playground, if not a place of worship, at least a beautiful park.

7 Community involvement
We envision community participation will take place at various levels:

  • Location.  Besides basics like availability of power lines and suitable lands, the locations will be chosen on invitation of village groups in the target area.
  • Shared ownership,  savings by the locals, investment by those with roots in the region, 50year lease of land
  • MFIs, woman saving and loan groups, farmers cooperatives, rotary clubs, individuals will do the day to day management of the solar farm together with the technicians.
  • monthly renumeration: looking after 100 solar panels 600rs  ( power income 5kW = 1000kWh/month = 9000rs), max. 500 panels/ family; looking after 100 young trees up to year 4: 300rs each month, max. 1000 trees. Also for trees planted on land leased by SF also outside the solar plant reservations. Some of these income will pay for water and power bills.
  • Income generation: besides  renumerations for investors and for care takers the project will generate  food, fodder, medicine, fuel and other product of the growing food forest or agro forest. Both concepts are native to SriLanka.
  • Trees, timber, biodiversity, no mono cultures, mixed orchard, mixed plantation

8 Consultancy
Since this combining of community participation and investing with solar power plant with agroforestry is such a novel enterprise that many new operational manual have to be developed. It is logical that this should result in to start of a consultancy and software development unit to specialize in novel approaches  and solutions for global warming and poverty reduction combined with alternative energy, agroforestry and microfinance.

9 Budget Solar Farms

Research, development, marketing, legal, management            $1.5mn
Import  10MW thin film solar panels (for 25 units of 400kW)     $10mn
Inverters, cables + others elect. eq. in container (25x $60k)     $1.5mn 
Structure, 2.5m high, 4m x 500m rows, terrassed, with roads    $2mn
Property development and water supply $1mn
Other; training, housing, infrastructure, software, hardware, etc.$2mn
Land on lease hold, value                                                               $2mn
To develop the 2500 ha of food forest                                          $2mn
                                                                                              Total $22mn

We propose a Holding Company owning 65% of Solar Farms, including all land leased for 33y and its produce. The HC could be owned 90% by VC, 10% by STI.


  • Venture Capital                                                    8mn   
  • SriToys, FS, project proposal, management         1mn    
  • Development Bank  soft loan                 5mn    
  • Local investors, land lessees, local management  8mn  

Total                           22mn  

10 Potential sources of revenue:

  • sales of electricity to the grid, upto $2.4mn/year, for about 25 years
  • local power and water supply (public / private)
  • agro business on 5000 ha plantation, will be planted in a 10 year program, return for tree crops like coconut, rubber and mango are upto $10K /ha/ year
  • property development on 500 acres, incl. housing, schools, parks.
  • software development, management services and consultancy to implement solar farms worldwide (this might be the main revenue stream in the long run)
  • sales, import + export of solar PV equipment,
  • carbon credits (CDM), potential $0.2-0.3mn/year, are generated by solar panels
  • carbon credits (CDM) for trees potential $0.4mn/year by year 12, $1.4by year 17 and growing very quickly, if planting continues.
  • timber sales of 200K trees per year from year 12

11 Exit strategy
It is the intention of the principles list the company on the Colombo stock exchange within 4 years.
The solar farms part the investments are as follows:
$1.5mn for R&D and marketing, should result in a strong consultancy firm in solar farms and the combination with (mixed) plantations, property development, community participation and micro finance.
$ 10mn to import 10MW thin sheet panels; because of the scale we can work far below the market value (now $4/W), so it will always be possible to make a profit on these.
$ 1mn, same goes for the inverters and the other electrical equipment
$ 1mn for water and site development, $ 2mn for housing, infrastructure and overheads, $ 1mn for land and $ 1mn for further local input are planned to be financed locally and will return to the local investors in case of default.

12 Planning
Besides arranging the financing (VC + bankloan) the preparations of the project involve a lot of permits and clearings of the following departments:

  • planning and rural develop dept.
  • security dept.
  • electricity and alternative energy dept.
  • water and environmental dept.

However endorsement at the highest political level (President) and passing an act in parliament are crucial for the success of the scheme, as is support at district level. With such powerful patronage of the scheme all necessary permits will materialize.
Since we plan for 25 unique projects in 25 unique locations only general guidelines can be approved by the central government, most of the permits have to be arranged at district and provincial level.
The government is also needed to grant wavers of import duty and allow favourable feed-in tariffs.
The roadmap is as follows:

  • install test array of 100 panels (5KW) on STI HQ roof
  • get political backing
  • advertise the concept locally
  • get bank approval
  • get investors approval
  • find location for pilot project
  • write guidelines for pilot project
  • get all permits and concessions for pilot
  • implement pilot project
  • get act in parliament passed
  • advertise to find 24 locations and groups
  • evaluate pilot and update guidelines
  • finalize budget and finances
  • get all permits needed from central government
  • write tenders for subcontractors
  • help getting permits at local level
  • import 10MW solar panels (120 container loads)
  • implementation

FS 21-6-2011


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