There has been a surge in the use of solar by businesses in Nigeria, as they seek an alternative to the supply of power due to the rising global oil prices that have led to the hike in the price of diesel and petrol.
Some businesses have suspended operations, while some are struggling to keep their business afloat. Nigeria, which has the largest economy in Africa, with a population of more than 200 million people, has an installed electricity capacity of 12,500 megawatts, but the national grid only supplies 4,000 MW at peak, leaving businesses and households heavily reliant on diesel-powered generators.
This is indeed a challenging time for businesses in Nigeria, as many companies have pruned their number of staff to cut labor costs. Due to the Russian-Ukraine war, that has driven up the international crude oil prices, higher projections are still anticipated which presumes more impending woes for nations.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
According to the energy commission of Nigeria, it disclosed that the country spends $22 billion annually on fuel generators. These exorbitant prices spent on petroleum resources, no doubt stifle the growth of businesses in Nigeria, with the price of diesel that has nearly tripled to N800 a litre ($1.93) which has led to the increasing growth in demand for solar as some businesses can’t cope any longer.
Solar power adoption is gradually rising with estimation at below two percent. Some businesses cited some constraints in the use of solar, as they perceive that it is unsuitable for large-scale use.
However, there are claims that big companies can run on solar, although it could not ideally be used as the main source of supply, but rather as a substitute. According to the CEO of Rensource energy, Prince Ojeabulu, he disclosed that the company installed under a megawatt of solar panels, and is currently building a 6MW plant.
He further revealed that going by the trend of solar adoption in Nigeria, there should be an estimation of 12 MW of solar installations operational across the country. A ministry of power also revealed that there was an increase this year of approved solar mini-grids serving industrial users.
Power supply is no doubt the bane of businesses across the globe, without it, businesses will shut down production activities which will have a negative impact on the business revenue.
With the numerous national grid collapses that have been recorded in Nigeria within the first half of the year, households and businesses are turning to solar energy for succor.
Nigeria’s 24 power plants are currently experiencing major power outages due to several reasons such as gas challenges, technical problems, lack of spinning reserves, etc.
The world bank in 2020, disclosed that 50 percent of 202 million persons in Nigeria were not connected to the national grid. This means that half of Nigerians are not connected to the national grid, which has made a large number of them to adopt the use of solar energy for power supply.
Due to the high adoption of Solar Energy among Nigerians, few persons and bodies have urged the government to encourage solar manufacturers by reducing import duties.
Since it is obvious that the national grid cannot reach everybody in the country, the government needs to encourage the sector as the industry has the capacity not only to supply households and businesses with power supply, but also it can create millions of jobs for unemployed youths through manufacturing and installation.