Business is booming.

Why Renewable Energy Is Nigeria’s Last Best Hope amid Energy Crisis

By Yemi Olakitan

Solar energy is a plentiful natural resource in Nigeria due to the country’s climate, which receives more than 2,600 hours of sunshine annually.

This development has the potential to provide between 5.5kWh and 6.7kWh per square metre on a daily basis.

Solar energy is also long-term affordable as the technology used to generate it develops and the associated costs decreases, making it increasingly less expensive to produce.

Compared to fossil fuel driven generators, solar energy will also get cheaper. One of the main advantages of solar energy is its modularity, which allows it to power anything with enough modules or components to scale up production.

Individual solar-powered appliances, such as lamps, fans, and refrigerators, which are frequently used in the home and have solar panels mounted on them or separately, are also powered by solar energy. There are also solar applications for MSMES, the country’s economic backbone, which holds even greater potential.

Solar home systems (SHS) are a standalone solution that, at its most basic level, consists of Photovoltaic (PV) modules and a battery system that work together to provide energy to an entire residence or building, not just individual appliances.

When MSMEs switched from not having access to grid-supplied electricity to employing solar energy solutions, they “reported a 50% reduced monthly spend on electricity (from N9,406 to N4,738) as well as increased working hours and better yields.”

The knock-on advantages are also extensively documented, in addition to this. Businesses benefit from enhanced efficiency and output as opposed to being hindered by electricity restrictions.

Providing MSMEs with dependable and inexpensive electricity is a crucial step in enabling the expansion of enterprises in Nigeria, since they say that electricity is their biggest expenditure and one of the major dangers to their operations.

With capacities ranging from 500w (which includes many small domestic goods like laptops, small fridges, and televisions) to 10kW, which powers the majority of heavy-duty household products like air conditioners, solar systems may supply higher capacities and handle more complex energy needs. For heavy commercial or industrial use, it probably isn’t appropriate.

Additionally, with significant long-term investment in mini-grids, solar energy may power businesses, communities, and the entire nation. The adoption of solar in Nigeria has been sparked by breakthroughs, declining costs, and increasingly unattractive electrical alternatives, but there is still a long way to go.

The maximum electricity that can be produced by a solar panel remains at 1Wp (watts peak) per person. The per-person capacities in Ghana and Kenya are 3Wp and 2Wp, respectively.

Price continues to be the key market development obstacle despite the emergence of numerous payment mechanisms, which is a reflection of other persistent market problems. The costs added at each stage of the solar supply energy chain can be used to analyse these issues.

The costs of manufacturing and assembling the products outside of Nigeria and bringing them into the country under a high tariff regime, unofficial taxes and levies that importers must pay to clear their goods, logistical and transportation issues that make it difficult and expensive to distribute to rural areas, and other factors all contribute to the long-term increase in price and affordability of solar solutions for many Nigerians.

Overall, Nigeria’s solar energy industry is promising and has a bright future, especially in light of recent events that have made Nigerians realise how unsustainable it is to rely solely on fossil fuel-powered generators.

However, there are significant obstacles limiting the sector’s expansion in Nigeria. These problems may make the final solutions pricey and out of reach for the majority of Nigerians.

In order to capitalise on the $10 billion market opportunity that solar energy presents and the anticipated possibility of creating a more robust economy for the Nigerian state, similar to that of its equivalents in other industrialised countries, major investment and participation by stakeholders are required.

The Federal government’s policy support to create an enabling environment, financial institutions and investors’ provision of appropriate funding for the business models and target market, and robust consumer education to encourage users to make informed decisions are the necessary interventions.

A proactive, rapid solution to the energy crisis issue is required due to the pervasive blackouts that continue to occur in Nigeria, which place a significant strain on individual households and businesses and leave people without access to electricity.

According to a study from the World Energy Outlook 2023, the national and global energy crisis that followed Russia’s invasion of Ukraine seriously harmed efforts to increase access to electricity.

The number of people without access increased dramatically, rising by around 6 million to about 760 million, with a significant concentration largely in sub-Saharan Africa.

However, data from the first half of 2023 show a change. In 2023, the number of people without access to electricity in sub-Saharan Africa is anticipated to stabilise after rising for three consecutive years.

Africa’s financial resources were further constrained by rising national energy utility debt loads. As a result, in 2022, up to 50% fewer individuals on the continent had grid-connected access to electricity. This has led to a significant increase in the demand for alternative energy sources, notably in West and East Africa. As more solar household systems are offered, the number of Nigerians without access to electricity is steadily decreasing.

Recently, Airtel decided to deploy over 32MW of solar PV and storage capacity across Nigeria. Airtel chose WATT Renewable Corporation (WATT), a privately held provider of hybrid solar systems. 600 sites will have energy-as-a-service installations of solar energy and lithium-ion battery storage in compliance with the deal.

Airtel will have increased confidence in and uptime from its power supply as a result of the hybrid solar arrays as it expands network coverage and incorporates 4G and 5G technologies in the region.

The agreement reflects a shared set of principles; WATT’s dedication to sustainable development will assist Airtel in achieving its goals for reliability, sustainability, and cost while also creating a holistic and long-lasting value for people and communities.

By switching to WATT’s hybrid solar power system from Airtel’s diesel generating, the local population will breathe cleaner air and scope 1 emissions would be reduced.

The work will require the use of cutting-edge enclosure technology for the balancing systems being introduced across the locations, boosting operating economies everywhere.

Assuring a consistent supply of dependable, sustainable energy as well as an enduring collaboration with Airtel, WATT will continue to operate and maintain the energy production facilities after installation.

Oluwole Eweje, Chief Executive Officer of WATT, said, “Working with Airtel offers a brilliant opportunity to deliver renewable energy to the Nigerian telecommunications space, which will be essential to the continued sustainable growth of the sector.”

This initiative will improve connectivity for millions of customers in addition to promoting Airtel’s sustainability objectives and improving the air quality in surrounding areas. We’re excited to increase our knowledge in the area of communications, where we’ll be working for the foreseeable future.

WATT is a privately held, independent producer of renewable energy technology that provides innovative photovoltaic (PV), advanced energy storage, and generator combinations to provide sustainable energy solutions.

It provides complete engineering, procurement, and construction (EPC) and operations and maintenance (O&M) services in Africa, the US, and Canada.

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