A recent report by Mckinsey and Company states that the cost of solar residential system is as low as $1 per watt peak; compared to the $100 per watt peak recorded in 1975.
The 30-year struggle to light up Nigeria is well-known. Although we have seen increased generation, a distribution network clogged by incompetency, and a civil service so entrenched have led to saddling Nigerians to generate energy privately to the tune of $13 billion annually.
The failure of the energy sector has led to the destruction of the Nigerian manufacturing, health, and business sectors. Nigeria is a big country, with 900,000 square kilometers, and almost 160 million citizens. It has to be incredibly difficult to distribute electricity to all these people on a reliable schedule. PHCN simply does not have the capacity to provide meters to all households in Nigeria and charge them according to usage. Unfortunately, all of these make it likely that the power issue will not be solved in my generation without some sort of grand idea to move us forward.
The history of solar energy in the world is fascinating. The current opinion is that solar-photovoltaic sector is dead and was killed by China’s bold entry into manufacturing which drove down prices just as the subsidies that drove up demand dried up due to the world economy collapse. The cost of solar power is incredibly low today and is expected to get even lower as companies are increasingly converting consumers.
A recent report by Mckinsey and Company states that the cost of solar residential system is as low as $1 per watt peak; compared to the $100 per watt peak recorded in 1975. As more countries convert to solar, some as high as 50% usage by 2020, one wonders why Nigeria doesn’t tap into this possibility. Solar power has been reported to work best in areas without access to electric grid and areas that use diesel generators to provide uninterrupted power supply. Isn’t this the perfect description of the Nigerian power situation?
I recently read a tweet that implied that a former general manager of a PHCN in Yola State used to divert power to a paying cotton plant while the rest of the poor citizens of the state had no access to electricity. Although this action brings up the issue of equity it is an idea that could serve as a model for revolutionizing our energy sector.
Suppose we are to follow the example of that rogue PHCN general manager by removing households from the grid using a cash incentive system for any household that chooses to get off the grid and onto solar energy? This will be expensive but there is the huge amount of Naira wasted in the subsidy scam, it could be very useful for something like this. The government must also get serious about developing the solar energy supply chain and installation system in Nigeria through a combination of low tariffs, renewable energy laws, and tax subsidies to companies to give them incentives to invest.
Kenya and South Africa are already doing this in incredibly innovative ways. Kenya uses the same pre-paid technology that telecommunication companies all over Africa have perfected to sell solar energy to consumers in Nairobi. Consumers buy a recharge card to use their solar panels and they do not have to worry about the installation cost as companies take over that aspect. There is the incredible amount of money to be made in filling the balance of system needs. That is, Nigerian economy stands to gain even more if Nigerian companies are to provide installation and upkeep services, wires, and switches to balance the importation of the actual panels.
If we are to separate commercial and personal consumption of energy, and move the latter towards pay as you go solar-PV systems using a combination of direct subsidies to households, tariffs and tax incentives for companies to start up this sector, and commercial consumers are left on the grid, this will lead to easier distribution which might finally allow us to light up the country faster and sustainably.
Editor’s note: Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija