Recent tariff increases by the Nigerian Electricity Regulatory Commission have worsened the country’s energy access deficit. This is prompting many Nigerians to explore alternative sources like solar and hydropower to address the high costs and environmental concerns of fossil fuels.
The State of Nigeria’s Power Supply
Nigeria’s electricity shortage severely impacts its economy and the well-being of its people. With about 90 million people—or 45% of the population—lacking access to the national grid, the country faces the largest electricity access deficit globally. The disparity is stark between urban areas, with 84% access, and rural areas, with only 26%.
Recent tariff hikes by the Nigerian Electricity Regulatory Commission (NERC) have compounded the problem. The electricity cost for customers on Band A, who ideally receive 20 to 24 hours of power daily, rose from N68/KWh to N225/kWh before a slight reduction. In comparison, Band B receives 16 to 20 hours, and Band C gets 12 to 16 hours.
The increased tariffs have prompted many Nigerians to transition to alternative energy sources. Renewable energy—from sources like solar and wind power—is emerging as a promising solution to address both soaring energy expenses and the environmental harm caused by fossil fuels.
Embracing Solar Home Systems
By harnessing Nigeria’s abundant sunlight—an average of 6.25 hours daily—solar panels offer a way for homes and businesses to free themselves from the national grid through Solar Home Systems (SHS). This transition not only reduces electricity expenses but also insulates users from unpredictable price fluctuations.
A 2018 market assessment by Sustainable Energy for All (SEforALL) and the African Development Bank (AfDB) estimated that 6.2 million people in Nigeria are ideal candidates for SHS solutions, partly due to their distance from grid infrastructure. These systems range from entry-level units for basic lighting to large systems capable of powering appliances like TVs, fans, and kitchen devices for the growing middle class.
The Rural Electrification Agency (REA) is spearheading various funded projects to support this initiative. Notable players in Nigeria’s solar market include Lumos Nigeria, Arnergy Solar Limited, Greenlight Planet, Solar Energy Nigeria, Rubitec Solar, Blue Camel Energy, Solynta Energy, Havenhill Energy, Auxano Solar, and Solar Force Nigeria Limited.
Affordable Solar Installations for Various Households
Solar energy is emerging as a cost-effective and reliable alternative in Nigeria, highlighting the need to integrate renewables into real estate development.
A survey by Clean Technology Hub revealed that while all real estate developers recognized the importance of integrating renewables, most do not currently use them. Solar energy emerged as the preferred option, largely due to its perceived cost-effectiveness.
Respondents unanimously agreed that solar energy is the most economically viable choice. A key driver is the declining cost of solar technology, along with the significant long-term savings it offers compared to traditional renewable sources like hydropower.
In the survey, 71.4% of developers favoured solar energy, while 28.6% preferred a mixed approach. The findings also highlighted a wide range of implementation costs, from N200,000 to N10 million.
At the household level, costs for a system with a one-year warranty ranged from N2 million to N3 million, while options with shorter warranties or subscription models could be as low as N200,000. These findings underscore the urgent need for affordable renewable energy solutions in real estate.
Collaboration between the government and private businesses is crucial to overcome these challenges and accelerate the adoption of renewable energy through incentives and public awareness campaigns. Despite the obstacles, embracing renewables offers Nigeria a clear path toward a sustainable and resilient energy future.
