Tesla Gigafactory has been widely reported in the news especially since July 2014 when Panasonic announced to partner with Tesla in the construction of the $5billion (USD) factory that is reportedly the world’s largest solar-powered factory and also the world’s largest battery manufacturing plant.
Admittedly, it appears to be quite an odd topic to talk about Nigeria in a discourse on a United States based Tesla Motors Inc. There are obviously lessons we can draw from this as we shall see later.
What is the Tesla Gigafactory?
The 1,000 acre land Tesla Gigafactory is an initiative of Tesla Motors Inc. where Tesla batteries will be manufactured at a much-reduced cost thereby reducing the production of Tesla Electric vehicle battery and the Tesla Powerwall as high as by 30%. It is projected that by the year 2020, the Tesla Gigafactory would produce 50 GWh/yr of battery packs as well as 35 gigawatt-hours per year of cells!
Architecture of the Gigafactory
Perhaps, the most remarkable thing about the Tesla Gigafactory is its architecture. Before the Nevada site was chosen, Tesla Motors Inc. considered citing the Gigafactory’s site in a number of places including California, New Mexico, Arizona, Texas as well as Nevada where there is an abundant supply of sunlight.
The 5 million-square-foot (465,000-square-meter), diamond-shaped Lithium-ion battery factory is built with renewable energy in mind especially solar and wind power. The building will generate all the electricity it needs. Take a look at the Tesla Gigafactory below and notice especially how the roof is covered by Photovoltaic panels!
United States Involvement in the Gigafactory: Any lesson for Nigeria?
Perhaps the commonest thing about the United States and Nigeria is their need for renewable energy. Of course, the United States is a developed country and Nigeria and Africa by extension is way behind them in the utilization of the several ways Renewable energy can contribute to the nation’s economy and increase the average standard of living of the people.
But Nigeria as an African economic power must learn to catch up fast with what is already working in other countries.
For example, let’s look at the Government’s involvement in the establishment of the Tesla Gigafactory, although Tesla Motors Inc. is a privately owned company.
As I wrote earlier on, the Tesla Gigafactory is cited in the state of Nevada. In 2014, Bloomberg Business News reported that The Nevada State Government has agreed to offer a whopping $1.3 billion in tax incentives to build the world’s largest lithium-ion battery plant in their state. In addition, Bloomberg wrote:
“Tesla would pay no sales taxes for 20 years and no property or business taxes for 10 years. It also would receive $195 million of tax credits over 20 years.”
The question remains: “Why would a State Government spend so much resource just to get a private investor to cite a factory in her state?”
The answer isn’t quite farfetched. The Tesla Gigafactory was estimated to employ about 6,500 people and Nevada state Governor, Brian Sandoval estimated that Nevada would enjoy $100 billion in economic benefit over two decades from the construction of this factory –Quite a huge benefit on the short and long-run to the government, isn’t it?
Now bringing this down to our country Nigeria, you will quite appreciate the fact that we need more jobs in Nigeria than the United States by far, our government also critically needs more sources of revenue than the United states.
According to a Thisday publication on the unemployment rate in Nigeria in the first quarter of 2015:
“Accordingly 44.3 per cent of Nigerians in the labour force (not entire population) aged 15 to 24 were either unemployed or underemployed; while another 25.9 per cent aged 25 to 34 were either unemployed or under employed in Q1 2015.”
Such high unemployment figures as above simply mean that the Nigeria government must strive to ensure that private sector involvement is very much encouraged. Nigeria must borrow a leaf from the United States and the Nevada state government to ensure that the private sector that ultimately generates more employment opportunities for the people and additional revenue to the government are well protected and nurtured from infancy until they can solidly stand.
The PSC Solar case study:
We can cite a good number of examples of the positive effects of the private sector participation in the economy of Nigeria, but our own case will suffice for the purpose of this article.
In the PSC Solar Ikeja office alone, we generate almost 20KWh of electricity and we are completely off grid or not dependent on the nation’s power which already isn’t enough for the entire population. In our Ikeja office alone, we produce excess electricity, some of this we channel to street lights outside of our office that we solely installed and maintain. The Lagos State Government at least should support us and other private sector companies that are tirelessly building up the economy of the nation.
Assuming the Lagos government encourages 1 million more businesses in Lagos State to generate their own power using renewable energy means, assuming each of these businesses generates 10KW of electricity on the average per head, that is an additional 10MW of electricity added (not taken from) the Lagos State allocated power!
Note that we didn’t mention the fact that PSC Solar has trained over 200 Engineers and currently employ hundreds more Nigerians! We only chose to talk about our contribution to the energy sector of the economy. This analysis applies to all other privately owned companies in Nigeria who without government’s adequate support still struggle to stay in business by their own initiatives and sweat.
Ways Nigerian Government can help the private sector:
In conclusion, I shall enumerate below the ways the government can help and encourage the private sector, bearing in mind the Nevada State’s contribution to the successful completion of the world’s largest Lithium-ion battery plant in the United States that would later generate 6,500 jobs and a $100 billion economic benefits to the government in two decades.
Here are ways the Government can help:
- Tax Incentives
- Favourable Interest rates
- Favourable trade policies such as the lowering/increase in import quota and favourable tariffs
- Contracting with Private companies on the execution of Government projects
- Funding basic Private sector Research & Development
As you may have noticed, the list is endless. The government can help in various ways and it all boils down to favorable government policies.