ARTICLE:: Ushering solar energy in Nigeria: All but a cup of tea

By Ayoola Brimmo

Published on 8 July 2014

Many countries around the world have responded to climate change by augmenting their electricity production with renewables, with an estimated 13 and 25 percent share recently reported in the United States and Germany respectively. However, despite Nigeria's abundant requisite resources, the proportion of renewables in its energy mix is still abysmally low, estimated as less than 1 percent.

One might argue that the decrepit state of Nigeria’s overall energy portfolio renders the need for solar energy as secondary. This argument is mostly backed by claims that the solar technology is unreliable and expensive.   However, these are specious statements, as adequately sized storage components (batteries) ensure constant electricity supply from solar farms and this technology is actually cheaper in the long run— it pays back in less than 4 years when compared with the predominantly utilized small-sized (less than 20kW) diesel (or PMS) powered generators.

The salient issue with the solar technology is the system’s initial capital investment which could be costly compared to a fossil-fuel-powered system of the same capacity. However, for the “above average” Nigerian, the cost issue can be somewhat maneuvered with the economics of scale concept, where multitudes invest together to build a large solar farm in order to reduce the cost of their respective power requirements by about 40%. On the other hand, even with a 40% discount, majority of the populace wouldn’t still find solar panels affordable. So, how would these people have access to solar power?

In search of an answer, let’s drift a bit from renewables and take a minute to peruse the country's demography. It was recently reported by the New World Wealth that Nigeria has about 16,000 millionaires (in USD) and their summed wealth was estimated to be 13 trillion Naira (about $82 billion dollars). Putting that into perspective, it means that if each of these millionaires invests 10% of their wealth in solar farms, the country's solar power portfolio would ramp up to 6 GW which equals the nation's current total power generation capacity. In a situation where this energy is sold at NGN25/kWh — a sum about twice the amount charged by the national utility distribution company but about a third of cost to run a small scale diesel generator — these investors would break even in 5-6 years, assuming an annual average of 5 hours of direct sunshine, 30% operation costs, and 10% overall loses.

Having examined the rich, let's see how the middle class citizens would fare if they contributed 10% of their annual income in a single year. Renaissance Capital estimates this demographic to be about 23% of the country’s population, with a minimum monthly salary of NGN75, 000.00 (USD 480). This translates to about 20 GW in solar farm capacity. Even better than the millionaires!

The reality is that less than 24% of the Nigerian population (middle and upper class citizens) can raise more than the nation’s annual budget by putting aside 10% of their income in a single year. Basically, sheer number makes Nigerians more financially buoyant than the government hence; we have to proselytize ourselves from the unrealistic idea that the government alone should solve our energy problems. At the state we find ourselves, it’s mostly OUR responsibility to do something about any wrong in OUR society. Making profit while doing this serves only as the cherry on the cake.

Undoubtedly, the task of bringing together 40 million people to invest in a single energy project is extraordinarily difficult. However, breaking this number into multiple cells of hundreds makes the task less daunting. This is the ultimate goal of NiFEG’s “Community Solar” program — to create a type of crowd funding platform where people can come together and invest in powering their community. Realizing that the success of this project is highly reliant on the potential investor’s trust on the solar technology, we are proceeding with an outreach project —Solar Outreach —where the reliability and moderate cost of the solar technology would be demonstrated in the Nigerian context.

This ride portends to be all but a cup of tea, but we are ready to take a Spartan approach till the very end.

By,
Ayoola Brimmo
NiFEG Member
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