The declining price of solar energy has led to an increase in global solar PV deployments. One sector that has taken advantage of this to achieve tremendous growth has been the rooftop solar PV industry. Residential solar PV deployments have driven solar installations in many regions, including Australia, India, Vietnam and Turkey. This increase has been fuelled by favourable government policies that provide incentives and subsidies for rooftop solar PV projects.
While there has been an uptick in residential rooftop deployments in Nigeria, the spate of additions is still below expectations, given the country’s rooftop solar potentials. Residential solar deployments have been restricted to unconnected rural areas and smaller Solar Home Systems units with capacities usually below 0.2kW. Residential solar PV systems can play a huge role in reducing the supply deficit for underserved grid-connected consumers. However, several factors currently hinder their deployment for these consumers.
Why aren’t Residential Consumers Installing Rooftop Solar PV Systems?
One factor influencing the low state of residential solar PV systems deployment has been the peculiar nature of residential energy demand. Residential consumers make up about 60 per cent of total grid-energy demand. According to the National Control Centre (NCC) data, the average peak demand period is often between 9:00 pm and 10:00 pm. Most residential consumers (especially those with huge energy loads) prefer one-time on-demand large capacity supply often provided by large capacity fossil fuel generators.
According to data from HBS Nigeria, the average capital costs (per kW ) for solar PV is $2,845, while for petrol generators, it is $139.68. However, the Levelised Costs for Electricity (LCOE) is $0.23075 for solar PV compared to $0.63 for petrol generators. Solar PVs can last for over 20 years compared to generators which have average lifespans of 5 years.
Despite the advantages of solar residential consumers often do not see it as a viable alternative to fossil fuel generators. This is because of the high upfront capital costs needed, especially when paired with an energy storage system to meet demand during nighttime peak demand periods. Residential consumers often cannot afford to install solar systems of equivalent capacities with their fossil fuel generators.
How Net Metering Can help
A net metering policy for rooftop solar systems across the country could help increase the adoption and affordability of rooftop solar systems. Net Metering allows consumers to sell excess energy generated to the utility company. Residential consumers could sell excess energy generated during the daytime to the grid and get credited with grid electricity units in return. Consumers’ net electricity bill essentially becomes the difference between electricity consumed from the grid and electricity fed back to the grid either sold at the full market tariff rate or an alternative tariff rate.
Net Metering can incentivise residential electricity consumers in Nigeria to deploy rooftop solar PV systems. Net Metering would enable consumers to reduce monthly energy costs. With this, consumers can avoid the high upfront costs associated with battery storage systems needed to store excess solar supply.
Net Metering will also benefit the country by adding alternative generation sources to the grid. As more consumers add clean energy to the grid during the daytime, gas power plants often stifled by constraints can focus on providing nighttime energy supply.
Rooftop solar systems are quite easy to install and have operations and maintenance costs. What is needed now are policies that make them enticing for Nigerian residential consumers.