Rising Interest in Nigeria’s Off-Grid Solar Market
Solar power may become the most preferred alternative electricity source to Nigerians, judging by recent developments. Despite the economic barriers to its growth, Nigeria’s solar power market has moved with a great impression on electricity consumers who are fast embracing it to overcome the poor supply from the national electricity grid.
Nigeria, with a population of about 180 million people, has been unable to provide power to more than 80 million of its people. Even those connected to the national grid are mostly under supplied, necessitating their recourse to alternative means, which include expensive fossil fuel generating sets.
Manufacturers in the country said in February that their peak electricity demand had gone up to 14,882 megawatts (MW). But the national grid is only able to generate and supply about 4500MW at the most. Even at that, the manufacturers do not get a good amount the meager 4500MW from the grid, so they rely on self-generated electricity to power their operations.
Beyond the manufacturers, power from the grid is also never enough to satisfy the demands of domestic electricity consumers. Electricity consumers now have a choice of pivoting to solar power, which is sourced from the sun and converted directly through photo-voltaic (PV) or indirectly using concentrated solar power, or even a combination of both.
To underscore Nigeria’s losses to the abysmal power supply, a 2017 study on the nexus between energy access and poverty alleviation, done by Patrick Osakwe of the United Nations Conference on Trade and Development (UNCTAD), stated that Nigeria’s desire for industrialization depended heavily on the extent its government could effectively deal with the energy challenge.
Osakwe had stated, ‘There are at least three principal channels through which the poor access, unstable supply, and the high cost of electricity in Nigeria has had a deleterious impact on industrialization. This includes: low manufacturing capacity utilization rates, low competitiveness of manufacturing firms, and lack of firm growth, particularly for small and medium enterprises (SMEs).
“One of the main effects of lack of access to stable and affordable power supply in Nigeria is its impact on the ability for firms to operate at full capacity. It also results in under investment in the sector, thereby, limiting the ability of domestic firms to expand capacity when need arises in the future. Â Low rate of capacity utilization has been a major feature of manufacturing in Nigeria despite the high demand for manufactured goods in the country.”
He noted that a World Bank survey in 2016 indicated that 71 per cent of Nigerian firms used generators, and that generator fuel alone accounted for about 23 per cent of the total costs of intermediate inputs used in manufacturing between 2010 and 2012.
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