Nigerian Businesses switch to solar for Cheaper Electricity
Solar for Nigerian Businesses, Nigeria is Africa’s largest economy with a population of an estimated 200 million people, has an installed electricity capacity of 12,500 megawatts but the national grid only provides 4,000 MW at peak, leaving businesses and citizens heavily reliant on diesel-powered generators.
Every business establishment was built to make a profit for its owners and investors, running a business comes with some cost and overhead which allows for its day-to-day activity. In other to increase the profit margin of any business the overhead cost must be at its lowest low, one of the most important aspects of business overhead is electricity. Electricity is used to power the lighting, Colling systems, computers, and many more for easy flow of business activities, businesses in Nigeria don’t have access to cheap and steady power supply from the national grid. The Nigerian Energy sector has proven not to be trusted due to the inconsistency of the government in developing the sector and ensuring steady and cheap electricity for the country.
The cost of gas and diesel has also gone up significantly making it a wrong choice for businesses in the long run. The price of diesel, not subsidized like petrol, has nearly tripled to 800 Naira a liter ($1.93). Most of that increase came in the wake of Russia’s invasion of Ukraine. Businesses need electricity to run their daily task, and with the national grid not reliable for electricity supply businesses are forced to look for alternative means to reduce their overhead cost. Solar offers a cheaper, steady, and environment-friendly energy source, Nigeria enjoys an abundant supply of sunshine which in turn supplies enough sun rays needed for solar electricity.
Ministry of Power official said there was an increase this year of approved solar mini-grids serving industrial users but did not give details. But global supply chain disruptions caused by COVID-19 lockdowns in China last year and the war in Ukraine are tamping the optimism for growth. Delivery times for some equipment have risen from three months to as long as nine months.
There has been an increased growth in demand (for solar), I think really driven by the spike in diesel prices this year,” Victor Ezenwoko, Daystar Power’s chief commercial officer said. Still, solar power adoption is estimated at below 2 percent and some businesses perceive it as unsuitable for large-scale use, industry executives said.
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