The worsening power crisis has created a boom in the solar panel business, OpeOluwani Akintayo writes
The Nigerian solar panel market is currently witnessing a boom owing to the power crisis and high diesel costs, The PUNCH findings have shown.
A solar panel is a device that converts light energy from the sun to electrical energy. Solar panels consist of polyvoltaic cells (PV cells or solar cells) that absorb energy from sun rays and convert it to DC current. It can then be further processed by a power inverter to deliver energy to appliances in a home or business.
With rising costs of diesel to above N600 per litre and the numerous national grid collapses already recorded in the first half of the year, findings showed that Nigerians are currently turning to renewable energies, especially solar panels for succour.
The PUNCH market survey showed that solar panel price in Nigeria ranges from N10,000 to N90,000 depending on power capacity and quality.
According to Visual Capitalist, a business platform, the global energy mix by 2040 will comprise oil(28 per cent), natural gas(25 per cent), coal (21 per cent), modern bioenergy (7 per cent each); nuclear(5 per cent); solid biomass and hydro(3 per cent each).
The Council for Renewable Energy Nigeria (CREN) said it had identified over 100m untapped market opportunities in Nigeria’s solar sector for the unserved electricity consumers.
Director at Asteven Group and member of the Renewable Energy Association (REAN),Dr. Segun Adaju, told The PUNCH on Tuesday that the solar market was currently witnessing an increase in demand due to low power supply and high cost of diesel.
“Yes, there is a boom in the solar market because the grid is always collapsing and everyone needs power. We now have more people coming to ask about the cost of installing solar panels. And you know there’s also an increase in the price of diesel,” he said.
The World Bank, in 2020, said 50 per cent of the 202 million persons in Nigeria were not connected to the national grid.
“Those 50 per cent who don’t have access to power from the grid live in rural areas, while the 50 per cent connected to the grid don’t have supply because the grid is always failing. That shows that there is a market for everyone in the solar industry, and just one company cannot reach out to 101m persons. The market is very wide and there are opportunities,” Adaju further said.
Nigeria’s 24 power plants are currently experiencing outages due to various reasons such as gas challenges, water management, pigging, technical problems, lack of spinning reserves, among others.
“The renewable energy industry is one with natural resources that can replenish itself. Solar is the way to go. For instance, Punch reported that the national grid had collapsed five times this year. Half of Nigeria is also not connected to the grid, which means if you generate all the power you can get from hydro and gas, you still cannot reach half of Nigeria,” Adaju added.
According to him, the fastest and easiest way to power Nigeria was through renewables.
“Solar power is what we are seeing all over the place now. Interestingly, people say solar power is for the rich, but taking myself as an example, I started a solar entrepreneur business after I bought a solar lantern worth N5000 and took it to the village in Kaba, Kogi State. I gave it to my mum on December 26, 2012. Now, you can get solar lanterns for N2000, and you can get solar for any size depending on what you want to power.”
According to Bloomberg, inflows into renewable energy technologies in 2019 amounted to $282bn. This was about the time coal and gas attracted $100 bn worth of investments.
Innovations are currently driving the costs of solar and wind power lower.
Compared to a decade ago, the costs of constructing solar projects have dropped by more than 85 per cent, while wind power has been reduced by 49 per cent.
Vice President, Women in Renewable Energy Association, Toju Okanlawon, told The PUNCH that renewable energy was the present and future of energy for Nigeria and sub-Saharan Africa.
“All over the world, we have seen that energy poverty has the face of a woman. If the household does not have energy, the impact is more felt on the woman. As the mother in the home, she will be responsible for finding alternatives to power which can put a heavy strain on her. But if she has access to the energy, she will be able to impact the lives of individuals in her home. That’s the core vision of women in renewable energy. We are working with women in rural areas to provide energy for them,” she said.
Okanlawon urged the government to encourage solar manufacturers by reducing import duties on goods.
“Solar manufacturers in the country need encouragement to grow the market. Currently, the business environment is not all that friendly. We need policies that can drive the market towards development because, the truth is, it’s obvious that power from the grid cannot reach everybody. That’s why the government needs to encourage this growing sector, which is made up mostly of the youths. The solar industry has the capacity to create millions of jobs for the youths if allowed to thrive,” she said.
An assessment of the global renewable energy market by the PV Magazine said some countries, out of the top 10 most attractive markets for renewable energy investments, were countries that traditionally bought Nigerian crude oil. The most attractive markets are the United States (1st), Germany (2nd), China (3rd), France (4th), Spain (5th), India (6th), Australia (7th), Japan (8th), Netherlands (9th) and Brazil (10th). The magazine considered factors such as the current policy framework, market fundamentals, investor friendliness, infrastructure readiness, revenue risks, return expectations, and overall opportunity as the basis for the categorisation.
On the business model currently being employed by the solar market to woo customers, Adaju said most solar companies focused on small and medium-scale enterprises.
“So, we have several barber shops that have deployed solar power, yet people say it is expensive. The strategy is not cumbersome if you have the right business model. What I did was, instead of the barber buying petrol worth N1000 daily, he can pay me N5000 every week and I will install solar power for him. First, he has saved N2000 per week and he doesn’t have to worry about fuel scarcity or noise. He pays me for over two years and owns the system. Now, my solar has become cheaper than his generator. Of course, the initial cost of acquiring solar is high, but people are buying houses on the mortgage and banks are giving car loans, house loans, and generators. So, why don’t they give a barber the money to buy solar and pay over time?”
Adaju said the Asteven Renewable Energy Academy was training Nigerians to understand and learn how to deploy solar power because one of the challenges in the sector was the lack of local capacity.
“Gradually, the institute is training and sending capable people who can install solar power and entrepreneurs who can start a business, into the market. Generally, this will help to provide employment opportunities and increase income. Also, the impact of the school has helped in terms of reducing the emission from generators. In September, the institute will start a National Innovation Diploma to train Nigerians over a two-year period,” he said.
On how prepared the private sector was to latch on to the huge opportunities in the solar sector, Registrar of the institute, Ebami Arogboritse, said the private sector was putting structures in place to access the huge solar market.
“There is a huge gap in terms of manpower in the renewable energy market in Nigeria. So, there are several solar energy companies doing mini-grid in rural communities. One of the major problems is that we don’t have the capacity. We are trying to prevent the skills import problem plaguing the real estate market in Nigeria. That’s one of the major roles of this institute to create a pool of highly skilled and technical individuals to join the train of this solar revolution.
“More individuals have begun to embrace the use of solar and soon it will get to everybody,” he said.
The Institute has so far trained about 3000 people on solar PV installation, design and entrepreneurship.