- Rising fuel costs have driven Nigerian businesses to solar.
- The momentum could, however, be hampered by global supply chain disruptions.
Companies and businesses in Nigeria are looking to solar to meet energy demands as the costs of fossil fuels rise. The rising prices of diesel globally and increasingly fuel scarcity in the country have led to increasing demand for alternative energy resources like solar. However, suppliers’ inability to meet the consumers’ needs could deter this move to accelerate solar use.
Diesel price has risen over 300% to about ₦800 a litre ($1.93). These rising costs are raising operating costs and cutting companies’ profit margins. Companies see solar energy as a way to rectify this and ensure a stable energy supply at cost-effective rates. As a result, solar developers have increased deployments; for instance, Arnergy solar has made as many connections in H1 2022 as it made in 2022.
This momentum could, however, be hampered by global supply chain disruptions due to COVID-19 lockdowns in China this year and the war in Ukraine. Shipping times for some components have increased substantially, from three to as long as nine months.
Daystar CEO and co-founder Jasper Graf von Hardenberg noted, “we could install 60 MW this year if we had the equipment. We have even started turning down customers…we have become more choosy with whom we work (with).” A recent Boston Consulting Group and ALL On report estimates that deploying solar to 15-20m MSMEs with unreliable grid supply could increase MSME income by $7-$10bn.