PRICING, LAND ACQUISITION FOR LARGE SCALE SOLAR PROJECTS: A BRIEF FORAY INTO THE CHALLENGES, METHODS, COSTS AND PRACTICES

 

As Ghana transitions to renewable energy, large-scale solar photovoltaic (PV) projects are gaining momentum. However, one of the biggest challenges investors face is land acquisition. The complexity of Ghana's land tenure system, community concerns, and bureaucratic hurdles make acquiring land a critical but challenging step in solar project development.

This article breaks down the land acquisition process for solar projects in Ghana, highlighting the methods used, challenges faced, and best practices to ensure a smooth transition to renewable energy.

Understanding Land Acquisition Methods

There are two primary ways through which land is acquired for solar projects in Ghana:

1. Private Treaty Acquisition

Private treaty acquisition occurs when an investor negotiates directly with a landowner (or a group of landowners) to lease or purchase land. This is the most common approach for solar projects.

Advantages:

• Faster and more flexible than government-mandated acquisitions.
• Allows for direct negotiation on price and compensation.
• Less resistance from local communities if handled transparently.

Challenges:

• Ownership disputes can arise, especially in areas with customary land tenure.
• Some landowners increase land prices when they see investor interest.
• Double land sales may occur when multiple claimants sell the same piece of land.

2. Compulsory Acquisition

In compulsory acquisition, the government takes land for public interest projects, including renewable energy development. Compensation is provided to the affected parties, but the process can be controversial.

Advantages:

• Ensures that land is available for critical infrastructure.
• Eliminates lengthy negotiations with multiple landowners.

Challenges:

• Often leads to community resistance if compensation is not deemed fair.
• Can create legal battles over ownership and compensation.

Case Study: How Different Solar Projects in Ghana Acquired Land

The following table summarizes how various utility-scale solar PV projects in Ghana acquired their land:

Solar Plant	Location	Land Size (Acres)	Plant Capacity	Land Acquisition Method	Prior Land Use	Status
BPA Solar Farm	Yendi	141	51 MW	Private Treaty	Subsistence Farming	Not operational (under construction)
VRA Solar PV Farm	Navrongo	11.79	2.5 MW	Private Treaty	Subsistence Farming	Operational since 2013
VRA Solar PV Farm	Lawra	15.15	6.5 MW	Private Treaty	Subsistence Farming	Operational since 2020 (unit A) and 2022 (unit B)
VRA Solar PV Farm	Kaleo	95.65	23.85 MW	Private Treaty	Subsistence Farming	Operational since 2021 (units A & B)
VRA Solar PV Farm	Bui	45590.66	50 MW	Compulsory Acquisition	Unknown	Operational since 2020
BXC Solar Power Plant	Gomoa-Onyadze	300.17	22 MW	Private Treaty	Subsistence Farming	Operational since 2016
Meinergy Solar PV Farm	Gomoa-Onyadze	125	25 MW	Private Treaty	Subsistence Farming	Operational since 2018

Key Observations

• Most solar projects acquired land through private treaty agreements, meaning they negotiated directly with landowners.
• The Bui Solar PV Farm was the only project that used compulsory acquisition, as part of a larger government-backed renewable energy expansion.
• Subsistence farming lands were the most common type of land converted for solar projects.

These area ideal locations for solar projects in Ghana based on their proximity to the transmission grid and solar potential:

Place	Distance from Available Grid (km)	Solar Potential
BXC Solar Power Station (Gomoa Onyandze)	~11 km (Winneba Substation)	High – Already integrated into the national grid
Bui Power Authority (BPA) Solar Farm (Yendi)	Near GridCo substations	High – Suitable for expansion due to existing infrastructure
Bawku	Close to transmission lines	Very High – Identified as the most suitable for CSP (Concentrated Solar Power)
Navrongo	Near existing grid connections	High – Already has operational solar farms
Yendi	Near GridCo substations	High – Ideal for utility-scale solar projects
Wa	Close to power transmission lines	High – Suitable for both CSP and PV systems
Bolgatanga	Near existing grid infrastructure	Very High – High irradiance, good for solar farms
Savelugu	Near GridCo substations	High – Strategic location for solar power expansion

Key Insights:

• BXC Solar Power Station (Gomoa Onyandze) is closest to an available grid (11 km) and already integrated.
• Bawku, Navrongo, Bolgatanga, and Wa have very high solar potential and are close to transmission lines.
• Yendi and Savelugu are near GridCo substations, making them ideal for expansion of existing solar projects.

Processes to Set Up a Solar Power Company in Ghana

Setting up a solar-powered company in Ghana involves obtaining the necessary permits and approvals from regulatory bodies such as the Energy Commission (EC), the Public Utilities Regulatory Commission (PURC), and Ghana Grid Company Limited (GRIDCo).

Tariff Determination for Solar Projects

Previously, the tariff for solar energy under Ghana's competitive procurement process was capped at US$0.10 (10 cents) per kWh. However, as of the latest confirmation from the Energy Commission, this cap no longer applies. Instead, the tariff is subject to negotiation between the investor (developer) and the off-taker, which includes entities such as:

• Electricity Company of Ghana (ECG) – the main power distributor
• GRIDCo – responsible for transmission infrastructure

The Public Utilities Regulatory Commission (PURC) has confirmed that, in practice, negotiated tariffs typically range between US$0.07 (7 cents) per kWh and US$0.10 (10 cents) per kWh. It could be more be more backed by the project financial and underlying assumptions. Investors must engage with relevant stakeholders to determine a fair and viable tariff for their solar project

Challenges in Land Acquisition for Solar Projects

1. Complex Land Ownership and Tenure System

• In Ghana, land can be owned by individuals, families, clans, traditional leaders (chiefs), or the state.
• Some lands lack formal titles, making verification difficult.
• Customary landowners may sell land multiple times, leading to disputes.

2. Community Resistance and Compensation Issues

• Some communities feel that land compensation is not adequate.
• In some cases, compensation was paid to local chiefs, but the money did not reach affected individuals.
• Investors have faced protests and demonstrations due to unfulfilled promises of jobs and development projects.

3. Bureaucratic and Regulatory Hurdles

• The land registration process at the Lands Commission can be slow and expensive.
• Environmental Impact Assessments (EIA) and energy permits add to project delays.
• Government policies sometimes lack clear frameworks for land acquisition in renewable energy.

4. High Land Prices and Speculation

• Once landowners realize investors need their land, prices often increase drastically.
• Some people hold onto land near solar farms, hoping to sell it at a premium when expansion is needed.

Best Practices for Successful Land Acquisition

Early Community Engagement:

• Investors should involve local leaders, community members, and government officials from the start.
• Transparent communication about project benefits helps gain trust.

Due Diligence and Land Title Verification:

• Before purchasing land, investors must conduct a land search at the Lands Commission to verify ownership.
• Engaging district physical planning officers can help confirm land use zoning.

Fair Compensation and Job Creation:

• Compensation should be fair and paid directly to affected individuals.
• Solar companies should provide training and job opportunities to the local workforce.

Government Support and Land Banks:

• The government should designate specific lands for renewable energy projects to reduce acquisition risks.
• Public-Private Partnerships (PPPs) can help streamline the process.

Legal Compliance and Documentation:

• All land transactions should be registered properly to avoid future disputes.
• Legal agreements should include clear compensation terms and resettlement plans.

Conclusion

Land acquisition remains one of the biggest hurdles to solar energy expansion in Ghana. While most projects rely on private treaty agreements, challenges such as ownership disputes, community resistance, and bureaucratic delays continue to slow progress.

Proximity to transmission lines and cost of pricing for the power remains a key concern for investors.

By adopting best practice such as early engagement, fair compensation, government support, and legal verification, Ghana can accelerate its renewable energy transition while ensuring landowners and communities benefit from solar investments.