Adaptation of Feed-in Tariff for remote mini-grids: Tanzania as an illustrative case

Currently, Tanzania has Standardized Power Purchase (SPP) rates, which target generators connected to the national grid and distribution systems of mini-grids or isolated grids. We found for the off-FiT tariff the total amount needed to support the same number of customers by solar and hydro-mini grids versus diesel would be of 31.5 million US$, or a premium of 0.11 US$/kWh to the present current SPPs tariff of 0.24 US$/kWh for PV. We also found that a technology specific FiT tariff would be most suitable to attract national and international investors by providing a rate of return that compensates the risk of the investment. The overall support is comparable to the 36 million US$ that the government currently subsidizes and allocates to diesel mini-grids in country, and this shows the potential for a long-term renewable energy strategy for mini-grid areas.