Nigeria is currently grappling with economic difficulties, stemming from ongoing government reforms related to exchange rate unification and the removal of subsidies on premium motor spirit. These reforms have led to a general increase in the prices of goods and services, thereby affecting the purchasing power and overall welfare of the population.
Furthermore, the country is contending with epileptic electricity supply due to the complex challenges facing the Nigerian Electricity Supply Industry (NESI). These challenges include limitations in gas supply for thermal plants, outstanding debt obligations to gas producers and generating companies, outdated and inadequate transmission infrastructure, absence of cost reflective tariffs, power theft etc. While the government is actively working to revitalize the electricity supply industry, households and businesses are burdened by the financial impact of generating their own electricity using costly refined petroleum products to power their generators.
As of 2022, over 40% of Nigerian households own generators and bear the associated costs. The lack of reliable power supply has caused 80% of those with access to grid electricity to rely on alternative sources of electricity, primarily petrol and diesel generators. This reliance on generators is further evidenced by the fact that Nigerian businesses and households spend over $5 billion annually on fuel for their generators. This significant expenditure on fuel for generators reflects the financial burden imposed by the high cost of petroleum products for electricity generation.
Given the long-term nature of the solutions required to fix the on-grid segment of the NESI, it is crucial for the government to address the increasing trend of energy poverty in the country and its harmful effects on the productivity and welfare of Nigerians. Therefore, the government should consider exploring off-grid energy solutions that can swiftly provide electricity to households within a short timeframe, with acquisition costs payable over an extended period.
Off-grid Solar Solutions can Improve Energy Access for Households
By geographical location, Nigeria is blessed with good weather and climatic conditions that provide the required resources to power the electricity needs of households and businesses. This presents an opportunity for off-grid energy solutions to play a significant role in addressing the electricity supply challenges in the country.
By embracing off-grid energy solutions, Nigeria can address the energy poverty faced by many households and businesses. These solutions can provide reliable and sustainable electricity, reducing the financial burden on the population and contributing to improved productivity and welfare.
Solar systems are an ideal choice for households in Nigeria, offering numerous advantages that make them a reliable and sustainable off-grid option. Nigeria's abundant sunlight throughout the year makes solar energy a consistent and dependable source of electricity for households. Nigeria receives an annual solar energy intensity of 1,934.5 kWh/m2/year, resulting in 6,372,613 PJ/year of solar energy. With a 10% conservative conversion efficiency, the available solar energy resource is about 23 times the Electricity Commission of Nigeria's 2030 energy demand projection.
The solar energy capacity in Nigeria has been steadily increasing, reaching around 37 megawatts in 2022, this growth reflects the potential for solar energy to address the electricity supply challenges in the country. As the country continues to harness its solar energy potential, households stand to benefit from reliable, sustainable, and cost-effective electricity, contributing to improved welfare and productivity.
Challenges of Adopting Nation-wide Roll out of Off-grid Solar Energy Systems
The main challenge in adopting nation-wide roll out of off-grid solar system in Nigeria is the high acquisition cost, which makes these systems out of reach for most Nigerians, despite the effectiveness. The average acquisition cost of solar solutions in Nigeria varies depending on the capacity of the battery, the size of the solar panels, specific energy needs and installation costs. For example, a 1.5KVA system, which includes 2 batteries, 2 solar panels and installation, typically costs from N1,500,000, making solar energy technology expensive, particularly for low-income earners.
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