“We have a lot of perishable products and a lot of losses – a solar cold room would be important!” This is a common statement of farmers and cooperatives on the ground. Developing partners usually highlight that there are post-harvest losses of around 40%, to illustrate the huge market for solar cooling.
However, if we go into the field and assess the potential benefits of a solar room for the farmers/ traders, it often turns out, that a solar cold room alone is NOT a business case. Many pilot projects show, that it is very difficult and not possible to reach the utilization rate, which would be necessary to make the investment in a solar cold room profitable, i.e. recovering the initial investment costs within an acceptable period (e.g. within 3-5 years) and financing the O&M costs.
It is crucial to look into the details and to dig deep into the communication with the farmers, to analyze the financial feasibility:
- 40% “losses” are not losses; farmers/ traders still sell the products, even if deterioration has started.
- And the utilization of a cold room is also affected by the seasonality of crops
- Farmers have a high preference for getting cash TODAY, even if there is the opportunity to sell at a higher price tomorrow (after having stored the product in a cold room) etc.
If suppliers of solar cold rooms, exporters, processors and/ or other enterprises want to do business by operating cold rooms and renting the cooling space, each site requires careful project development, to ensure profitability:
- Selection of proper sites (with a reasonable volume of products, which need storage etc.),
- the setting of reasonable cooling fees,
- awareness raising on the side of the potential users are just a few steps etc.
A key success factor is often to identify add-on-services, which help to raise the demand for cold storage and/ or to use the surplus power: Facilitating access to the market for the storage users, and expanding the service area by including transportation services are some examples.
Are you a system supplier and interested in finding a business model for upscaling?
Or are you an agro value chain stakeholder (e.g. an exporter) and interested in a sustainable decentralized cooling infrastructure?
Or are you an organization, which likes to support pilot/ demonstration projects or the commercialization of solar cooling?
Then please contact.