The Solomon Islands lies in the south Pacific and consists of about 996 islands. Of its population of 515,870, about 80% live in rural villages and 20% in urban areas. The Solomon islands are almost entirely dependent on imported petroleum fuels for energy needs and electricity generation, and the current installed grid generation capacity is entirely fueled by diesel fuel. In 2009, 11.8% of households were connected to a Solomon Islands Electricity Authority (SIEA) Grid; after considering solar and diesel generators, about 80% of the population does not have access to electricity. About 93% of the population uses wood for cooking, including urban residents, and the transport sector is 100% reliant on petroleum products.
Barriers to the development of renewable energy, which the government plans to target 50% of its energy generation by 2020, include a lack of standardized and streamlined approaches for land acquisition toward distribution extensions and mini-grids, an outdated regulatory framework, and high upfront capital costs for most renewable energy projects. The geographic nature of dispersed islands and populations leads to high transportation costs, small economies, and high electricity costs. The SREP is targeting these barriers through five identified components: installing 60 mini-grids in rural villages using hydropower, biofuel, and solar PV; financing grid extensions to displace fossil fuel generation for an estimated 3,000 households on the islands of Honiara and Auki; strengthening the SIEA's capacity in power system planning; the construction of 2 MW in utility scale solar PV; and the trial of a fee-for-service model for the installation, operation and maintenance of 2,000 household solar systems for rural households.