Until recent years the only viable way of supplying electricity to remote areas was via a conventional genset, which has led to the installation of more than 50,000 gensets worldwide. With the world market price for diesel fuel the levelized cost of energy has increased significantly. Taking fuel transportation into consideration, the total cost for diesel fuel varies between 1 and 2 €/l. With a typical efficiency of 3 kWh/l the operating cost for conventional gensets results in 33 to 66 ct/kWh. In the same time frame PV prices have dropped by one fifth and will continue to decline in the future, reducing the levelized cost of energy to less than 10 ct/kWh. These numbers illustrate that PV power offers a huge potential for rural electrification. However, due to the volatile nature of solar radiation, the integration of PV is limited to 20–30 % of the rated system power. If a higher share of PV is installed, the system becomes unstable and power outages can occur.