May 17, 2024

Nigerians Explore Solar Alternatives Amid Rising Electricity Tariffs

The recent tariff increments by the Nigerian Electricity Regulatory Commission have worsened the energy access deficit, prompting many Nigerians to consider shifting to alternative energy sources like solar and hydropower to address high costs and environmental concerns caused by fossil fuels.

Electricity Condition in Nigeria Calls for Attention

Nigeria's electricity shortage severely impacts both its economy and the populace's welfare. With about 90 million people, or 45% of the population, lacking access to the national grid, Nigeria faces the largest electricity access deficit globally. Disparities are stark between urban (84%) and rural areas (26%).

Recent tariff hikes by the Nigerian Electricity Regulatory Commission (NERC) have worsened the situation, with Band A seeing rates rise from N68/KWh to N225/kWh until May 6th, subsequently reduced by 8.1%. Band A subscribers ideally should receive 20 to 24 hours of electricity daily, while Band B and C should get 16 to 20 hours and 12 to 16 hours, respectively.

The increased tariffs have prompted numerous Nigerians to consider transitioning to alternative energy sources. Renewable energy, derived from solar and hydropower, emerges as a promising solution to both the soaring energy expenses and the environmental harm caused by fossil fuels.

Embracing Solar Home Systems

In utilizing the abundant sunlight to potentially transform energy accessibility, with an average of 6.25 hours of sunshine daily nationwide, solar panels offer a means for homes and businesses to liberate themselves from the constraints of the national grid by embracing Solar Home Systems (SHS). This transition reduces electricity expenses and provides insulation against price fluctuations.

According to a 2018 market assessment by Sustainable Energy for All (SEforALL) and the African Development Bank (AfDB), an estimated 6.2 million people in Nigeria, accounting for six percent of the non-electrified population, are best suited for SHS solutions. This is attributed to factors such as their distance from grid infrastructure and low housing density.

SHS can be classified into two categories: trim/entry-level, meeting basic power needs like lighting for households, and Large SHS, serving the increasing middle-class market with more significant power outputs for domestic appliances such as TVs, fans, and kitchen appliances.

When assessing the overall landscape of SHS, the Rural Electrification Agency (REA) has taken the lead in implementing various funded projects to support this initiative. Among the notable players in Nigeria's solar market actively engaged in the SHS sector are 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 has emerged as a cost-effective and reliable alternative to conventional grid electricity in Nigeria, highlighting the need to integrate renewables into real estate development.

Clean Technology Hub surveyed real estate developers and residents on integrating renewables into residential infrastructure. While all recognized the importance, most currently don't use any. Solar energy emerged as the preferred option due to its perceived cost-effectiveness.

Respondents unanimously agree that solar energy stands out as the most economically viable choice for real estate development. A key factor behind this is the declining costs of solar technology and its significant long-term savings compared to traditional renewable energy sources like hydropower.

71.4% of developers favoured solar energy, while 28.6% preferred a mixed approach. The survey highlighted various implementation aspects, with costs ranging from N200,000 to N10 million.

For household scenarios, costs varied from N2 million to N3 million for a one-year warranty system, down to N200,000 for shorter warranty options or subscriptions. These findings emphasize the need for affordable renewable energy solutions in real estate development.

Collaboration between the government and businesses is crucial to overcome challenges and promote adopting renewable energy solutions through incentives and public awareness. Despite obstacles, embracing renewable energy offers a path towards a sustainable and resilient energy future for the country.

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