The world is changing rapidly, and energy lies at the heart of this transformation. With the continuous rise in fossil fuel prices, the instability of power grids, and increasing environmental pressures, businesses and communities must rethink their energy models. Renewable energy emerges as the obvious solution: it is more accessible than a decade ago, more reliable thanks to new technologies, and above all, essential for sustainable growth.
In Madagascar, where many areas still face frequent power outages and incomplete coverage, this issue becomes strategic. How can you ensure the continuity of your operations, reduce costs, and at the same time meet growing expectations for social and environmental responsibility?
This guide takes you step by step through the understanding of sustainable energy solutions and demonstrates how the energy transition in Madagascar can become an opportunity rather than a constraint.
Why Renewable Energy has cecome essential
Businesses and institutions still largely rely on fuel oil, coal, or gas to power their infrastructure. However, these resources are limited, subject to price volatility, and highly polluting.
Every sudden spike in oil prices or network failure directly impacts profitability and operational continuity.
In Madagascar, this dependency results in high energy bills and significant vulnerability to frequent outages, sometimes occurring daily. The consequences are lost productivity and planning difficulties.
Signals of a Global shift
Worldwide, the energy transition is accelerating:
Installed solar capacity has increased fifteenfold over the past decade.
Wind energy, both onshore and offshore, is now competitive with thermal power plants.
Hydropower remains a stable and substantial source, while biomass leverages local resources that were previously wasted.
These trends are not limited to major powers — they are already a reality in Africa, particularly in the Indian Ocean region, where sun, wind, and water represent tremendous natural advantages.
Why businesses must act now
Failing to anticipate means enduring rising energy bills, increasing regulatory pressure, and competitors who are already adopting more cost-effective solutions.
Conversely, organizations that integrate sustainable energy solutions today enjoy several strategic advantages:
Cost reduction: by generating part of their electricity through solar panels or small hydro plants, companies reduce their dependence on the grid.
Energy independence: energy storage systems ensure operational continuity even during extended outages.
Competitive advantage: implementing green energy initiatives enhances brand image and meets the expectations of investors, clients, and partners.
Easier access to financing: more and more funding institutions and banks favor projects aligned with the Sustainable Development Goals (SDGs).
👉 Consider an industrial SME on the outskirts of Antananarivo. By combining a photovoltaic solar installation, a battery system, and an energy efficiency plan, it reduced its annual electricity bill by 30%.
At the same time, production downtime due to power cuts was cut in half. Beyond the numbers, this project strengthened the trust of international clients who value the company’s CSR strategy.
INECO supports you in the energy transition with reliable and sustainable solutions, tailored to your specific needs.
The global energy challenge amid climate change
Climate change is intensifying extreme events: longer droughts, rising temperatures, irregular rainfall, and disrupted water cycles. In this context, the energy sector—still largely dominated by fossil fuels—plays a central role both as a cause and a solution.
Dependence on fossil fuels and environmental stakes
For over a century, most modern economies have been built on coal, oil, and natural gas. These fossil fuels are responsible for the majority of global CO₂ emissions, contributing to global warming, ocean acidification, and air pollution.
The use of fossil fuels not only generates greenhouse gas emissions but also causes negative externalities: respiratory illnesses, costs associated with natural disasters (floods, cyclones, droughts), and biodiversity loss.
Moreover, these resources are non-renewable. Extraction is becoming more expensive, and long-term availability is uncertain, increasing geopolitical risks such as resource conflicts and price volatility.
Key figures on the energy transition in Africa and Madagascar
The energy transition is not advancing at the same pace everywhere in the world, and Africa remains a continent facing particularly strong challenges. Madagascar illustrates these contrasts well, with enormous renewable energy potential yet a reality still marked by energy insecurity.
In Madagascar, only about 36% of the population
had access to electricity in 2023 (source : AfDB).
Approximately 45% of electricity produced comes from renewable sources
Despite this limited coverage, Madagascar shows a notable share of renewable energy (AfDB).
However, this figure masks the reality that a large part of consumed energy still comes from traditional biomass (wood, charcoal), which accounts for over 80% of final energy consumption
240 MW
It is the renewable energy capacity reached by the country in 2023 (The Global Economy). This remains modest compared to the available solar, hydro, and wind potential, but demonstrates a positive growth trend.
In 2022, natural gas accounted for nearly 42% of Africa’s electricity production
At the continental level, fossil fuels still dominate, followed by coal (26%) and hydropower (18%) (Agence Ecofin). This highlights the difficulty of reducing dependence on hydrocarbons, even as massive investments in solar and wind are emerging in several countries (Kenya, South Africa, Egypt, Morocco).
These figures reveal a dual challenge: securing energy access for the population while accelerating the integration of clean energy to avoid repeating the polluting model of industrialized countries. Madagascar, with its natural resources, has the potential to become a laboratory for the energy transition if investments follow.
Why businesses should Invest in sustainable solutions
Anticipate future costs: With the upward trend in fossil fuel prices, investing today in solar, hydro, biomass, or energy storage in Madagascar locks in part of your costs and secures profit margins.
Reduce operational risks: Supply interruptions, cost fluctuations, and regulatory risks (carbon taxes, international sustainability standards) threaten business continuity. Sustainable and diversified solutions help mitigate these risks.
Enhance reputation and meet expectations: Customers, partners, and investors now demand energy responsibility and a reduced carbon footprint. For companies, green energy is no longer a “bonus” but a key competitiveness criterion.
Access funding, subsidies, and tax benefits: National and international institutions support renewable energy projects. In Madagascar, government plans aim for an energy mix with a significant share of renewables by 2030, creating incentives for investors.
Innovate for resilience: Technologies such as smart grids, energy storage, and microgrids help overcome the limitations of existing infrastructure, providing flexibility, reliability, and autonomy, especially in rural and peri-urban areas.
Renewable energy solutions available today
As the world seeks to reduce its dependence on fossil fuels, several renewable solutions have emerged as credible alternatives. Each comes with advantages, limitations, and specific contexts of application.
Here is an overview of the main renewable energy options to consider today.
Solar Energy: photovoltaic panels and thermal solutions
Solar power is by far the most accessible and promising renewable energy, especially for sunny countries like Madagascar.
- Photovoltaic panels directly convert sunlight into electricity. Their cost has dropped by more than 80% over the past decade, making this technology increasingly competitive.
- Solar thermal solutions, on the other hand, use the sun’s heat to produce hot water or supply certain industrial processes.
👉 Many Malagasy businesses are investing in solar rooftops to reduce their energy bills and secure their supply amid frequent power outages.
Wind Energy: onshore and offshore projects
Wind power is another major source of clean energy, with significant potential in windy areas.
- Onshore wind farms are already deployed in several African countries, offering competitive energy that can be implemented relatively quickly.
- Offshore projects are starting to develop internationally. They require more investment but offer higher capacity and more consistent wind flows.
👉 In East Africa, some pilot projects are paving the way for wind energy development. Madagascar, with its windy coastal regions, could also join this momentum.
Hydropower: micro-dams and large-scale installations
Hydropower remains the primary source of renewable energy in Africa today.
- Micro-dams provide a local and decentralized solution, ideal for supplying electricity to rural areas far from the grid.
- Large dams, on the other hand, can produce significant electricity volumes but require heavy investments and may have environmental impacts on ecosystems.
Biomass and energy recovery from waste
Biomass has historically been an energy source in Africa and Madagascar, but it must evolve to become sustainable.
- Traditional biomass (wood, charcoal) is still widely used but contributes to deforestation and health issues from smoke.
- Modern biomass and energy recovery from waste (biogas, pellets, controlled incineration) enable the production of cleaner energy better suited to current needs.
Concrete benefits of renewable energy for businesses
Investing in renewable energy is no longer just an ecological choice; it is also a strategic decision for businesses. Beyond reducing carbon emissions, these solutions provide tangible benefits that directly impact profitability and competitiveness.
Sustainably reduce your energy costs
Energy expenses represent a significant burden for many businesses.
- Solar or wind installations allow companies to produce part—or even all—of the electricity they consume.
- This translates into a substantial reduction in bills, especially in a context of volatile energy prices.
- In the medium and long term, renewable energy investments pay off by reducing dependence on market fluctuations.
👉 A factory equipped with photovoltaic panels can reduce its annual electricity bill by 30 to 50%.
Gain energy independence and security
Power outages and grid instability can have serious consequences: slowed production, data loss, or decreased productivity.
- Renewable solutions, such as solar panels coupled with battery storage, provide partial or full energy autonomy.
- This ensures business continuity even in the event of a national grid failure.
- Companies thus become more resilient and less vulnerable to external disruptions.
👉 In Madagascar, where outages are frequent, this energy independence represents a major competitive advantage.
Enhance your CSR image and strengthen credibility
Consumers, investors, and partners are increasingly attentive to companies’ environmental commitments.
- Investing in renewable energy reduces your carbon footprint and allows you to communicate credibly about your sustainable actions.
- This enhances your brand reputation and attractiveness to customers, talent, and investors.
- Integrating a green energy strategy directly contributes to your Corporate Social Responsibility (CSR) efforts.
👉 A company adopting clean energy solutions clearly differentiates itself from competitors still dependent on fossil fuels.
Benefit from "Green" aid, financing and subsidies
Governments, international donors, and certain private institutions actively encourage the energy transition.
- Many programs exist to finance the installation of solar, wind, or biomass systems.
- These initiatives significantly reduce the upfront cost for companies ready to make the switch.
- In some cases, tax exemptions or carbon credits can also be obtained.
Take advantage of the expertise of our sustainable solutions specialists to successfully manage your energy transition.
Innovations and Trends in Renewable Energy
The renewable energy sector is evolving rapidly. New technologies are emerging and transforming the way businesses and communities access, consume, and store energy.
Energy Storage and Next-generation batteries
Storage is a key link in the energy transition.
- Lithium-ion batteries are already widespread, but new solutions are emerging: solid-state batteries, redox flow systems, and thermal storage.
- These technologies allow electricity generated from solar or wind power to be stored and used continuously, even in the absence of sun or wind.
- They also offer longer lifespans and improved efficiency, reducing costs for businesses and communities.
Smart grids and energy consumption optimization
Smart grids are revolutionizing electricity distribution.
- They integrate sensors, software, and control systems to balance production and consumption in real time.
- Businesses can reduce consumption peaks, optimize energy bills, and minimize waste.
- Smart grids also facilitate the integration of decentralized renewable sources, such as solar, micro-dams, and biomass.
Microgrids for isolated and rural areas
In areas far from the national grid, microgrids provide a practical and sustainable solution.
- They combine local generation (solar, wind, biomass) with energy storage.
- Communities can enjoy reliable electricity without relying on heavy infrastructure.
- These systems also promote energy autonomy for villages, hospitals, and schools in rural areas.
👉 Several pilot projects in East Africa already demonstrate the effectiveness of microgrids in improving people’s quality of life.
Renewable energy integration with AI and IoT
Artificial intelligence (AI) and the Internet of Things (IoT) are transforming the energy sector.
- AI enables forecasting of solar or wind production based on weather conditions, optimizing grid management.
- IoT (connected sensors) helps monitor real-time consumption, detect faults, and improve energy efficiency.
- Together, these technologies reduce costs, improve maintenance, and maximize the profitability of renewable energy installations.
Frequently asked questions (FAQ)
What is the average payback time for a Renewable Energy investment?
Payback varies depending on the technology chosen (solar, wind, biomass) and the company’s energy consumption.
On average, an installation pays for itself within 5 to 10 years, thanks to energy savings and available incentives.
Are Renewable Energies reliable for high-consumption industrial activities?
Yes.
With advancements in energy storage and the support of smart grids, renewable energy can now provide continuous power to industrial sites, even for energy-intensive operations.
How can businesses anticipate regulatory changes related to the energy transition?
Governments are gradually strengthening environmental obligations.
Regulatory monitoring and specialized guidance allow companies to adapt their installations and secure long-term investments.
Is it possible to combine multiple Renewable Energy sources in the same company?
Absolutely.
An energy mix (e.g., solar + biomass or solar + wind) provides more stable power supply and maximizes efficiency gains.
What are the main barriers for companies transitioning to Renewable Energy?
The most common obstacles are the initial cost, lack of technical information, regulatory complexity, and sometimes concerns about long-term payback.
An energy audit and a tailored plan help overcome these challenges.
