Subsidy removal on Premium Motor Spirit (PMS) and the jostle towards right pricing of electricity may have triggered a major shift in the pattern of energy consumption, with about 75 per cent of households now exploring solar as their alternative sources of energy.
A multi-dimensional survey conducted to assess Nigerians’ response to the almost 200 per cent increase in the pump price of PMS revealed that the majority of households are planning to embrace solar energy, even as service providers are contending with a surge in requests for low capacity utilisation equipment.
Despite the interest in alternative energy like solar, onboarding costs remain a huge concern and setback for those exploring the option, especially in a country with a high percentage of people living in various forms of multidimensional poverty.
Specifically, an average solar-inverter system for a small household costs between N500,000 to N1 million considering the high costs of batteries, solar panels and inverters. Many Nigerians do not have such disposable income to adopt such energy systems but would continue to rely on the grid and minimise use of generating sets.
Service providers, who spoke on the emerging trend, said there is a steep increase in the number of inquiries on services and available equipment, while demand has also increased by over 100 per cent in some cases compared with last year’s records.
Hitherto, millions of households augment public power with PMS-power generators while an insignificant percentage opted for renewable energy, which is perceived as highly expensive to procure by many consumers. But the market trend seems to be shifting not because the ‘new converts’ are genuinely desirous of an environmental-friendly energy mix but because the cost of powering generators is becoming unaffordable.
An average household would now need to spend thrice the cost two months ago to fill the same generating set to power its home appliances.
With the high cost of petrol, rising cost of electricity, renewable energy is quickly becoming a more attractive option for households, with solar power serving as a preferred source for its sustainability and cost-effectiveness and a major threat to conventional fossil fuel.
African Development Bank (AfDB) estimated that 40 per cent of Nigerian households use generators due to a weak grid power supply.
A survey by The Guardian, which sought to understand Nigerians’ options for the rising cost of keeping fossil fuel-power generators, found that 75 per cent households agreed that solar energy is their alternative source of power.
According to the survey administered online, 43 per cent said they would switch to solar due to the hike in fuel price while 34.3 per cent said they anchor their choice on the reliability of solar resources (sun).
Only 16.4 per cent, according to the survey, are considering solar energy for environmental reasons just as six per cent are changing for grid security.
The survey attracted a total number of 178 responses from different parts of the country. About 20.5 or one-fifth of the respondents have used fossil fuel generators for between one and five years, while 19.3 per cent have used fossil fuels to power their home for upward of six to 10 years.
According to the data supplied, 22.7 per cent have used fossil fuel generators from 11 to 15 years while 19.3 per cent are within 16 and 20 years of usage.
According to expert opinion, solar power systems have a longer lifespan than petrol-powered generators, reducing the need for frequent replacements. They also are non-emission of greenhouse gases, thus contributing to reducing carbon footprints.
Speaking with The Guardian, a Lagos-based solar service provider, Ety Christo, said there has been an increase in demand for solar-powered equipment recently, compared to last year. He said the demand is mostly for low-capacity systems.
Christo said that the recent sharp devaluation of naira has increased the cost of equipment, which is mostly imported.
“The demand ratio for large capacity is about 30 per cent while that of low capacity is about 50 per cent. Some people go for just solar-powered appliances. A lot have shown interest in installation but can afford the cost because of the financial crisis,” he said.
Also speaking with The Guardian, an energy economist, Habeeb Jaiyeola, said the price per litre increased as a result of the subsidy removal on PMS, thus pushing demand for alternative means of power away from the petrol-powered generating sets.
Jaiyeola said that the recently passed Electricity Act 2023 is expected to open up the power sector to competition across sub-sectors, enabling price drop over time.
He added that solar power has a relatively low-average maintenance cost and a very long average life span, which makes it upfront and cheaper in the long term.
“The initial installation cost of solar power will play a significant role in the consideration and acceptability of solar as the preferred alternative power source, even as the policies in the Electricity Act 2023 are expected to increase the acceptability and use of solar power sources,” he said.
Speaking on the potential impact of widespread solar power adoption on the environment and economy, the expert said solar power is environmentally friendly and enables the reduction of carbon emissions.
He emphasised that the liberalisation of the sector would encourage a different investment mix, which should also be targeted at underserved communities while investors make reasonable returns on their investments.
“The future of solar power in Nigeria is expected to contribute significantly to the attainment of the Sustainable Development Goals (SDGs) Seven. However, the achievement of this objective will require a sustainable approach from government and private sector towards the development of the Nigeria power sector,” he said.
Chief Executive Officer of Mone Solar, Ewere Okah, said Nigerian households must adopt solar energy as an alternative source of power to solve the country’s challenges
He stressed that the hike in electricity tariff and removal of fuel subsidy had increased the cost of electricity from the grid and fueling generators.
“Solar will create an energy architecture that is different from the one we know today,” he said.
An electricity analyst, Lanre Elatuyi, said the energy produced by solar panels is at zero marginal cost and noted that the savings from electricity bills could offset the upfront investment.
Speaking on the affordability of solar power, Elatuyi urged governments to put in place policies to encourage investors in the renewable space and a credit system for households that want to acquire solar power systems.
“The expectation is that with the increase in petrol price, people will naturally look for substitutes, given the fact that we are in a country with an abundance of sunlight, it is expected that we take advantage of this free source of energy as energy access is low in the country and reliability is a big issue, so that incentives are there for the adoption of alternative source of energy, especially from the solar, though the barriers are still there and if these barriers are not surmounted, solar power adoption may still be a far cry,” he said.
On the potential impact of widespread solar power adoption on the environment and economy, Elatuyi said solar power reduces dependence on imported fossil fuels, enhances energy independence and reduces vulnerability to price fluctuations or supply disruption, offering long-term stability as sunlight is free and abundant.
“On the economy, the solar industry provides employment opportunities including manufacturing, installation, maintenance and research development, as the solar sector expands, it stimulates job growth and local economies, the growing solar industry attracts investments and creates business opportunities, including solar panel manufacturing, installation companies and related services,” he said.
Speaking on policies or incentives to encourage more people to switch to solar power by households, Elatuyi said implementing net metering policies that allow households to sell excess solar-generated electricity back to the grid should be encouraged, adding that the system gives credit to homeowners for the electricity they contribute, effectively reducing their overall electricity bills, making solar adoption more economical for households.
“With policies, we can set renewable portfolio standards that require a certain percentage of electricity generation to come from renewable sources, including solar power, the new electricity act makes provision for this, and if we can also grant easier and quicker permits, we will likely see more adoptions,” he said.
The future of solar power in the country is bright. The country has a lot of potential for solar energy, with abundant sunlight and a growing population demanding more electricity. The Nigerian government also committed to renewable energy, with a target of 30 per cent of electricity generation from renewable by 2030.
According to the Nigerian Electricity Regulatory Commission (NERC), the country has an estimated solar capacity of 7.5 gigawatts (GWs). With the removal of petrol subsidies, there has been an increase in demand for solar power systems, as households seek to reduce their energy costs and decrease their dependence on fossil fuels.
As of 2022, according to a report by Africa Solar Industry Association (AFSIA), Nigeria was missing from the list of top African countries with solar power installations. The report said Angola topped the chart With 284 megawatts (MWs) of solar installations, followed by South Africa with 111.8 MWs. Egypt had 80 MWs, Ghana (71.3 MWs) and Mozambique (41.9 MWs).
According to BloombergNEF (BNEF), installations are expected to reach 315GWs in 2023 globally from 268GWs in 2022, and the International Energy Agency (IEA) expects global solar photovoltaic (commonly known as panels) capacity to rise by nearly 1500 GW in the 2022 surpassing natural gas by 2026 and coal by 2027.
Guardian
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