As oil and fuel prices soar all over the globe, Nigeria also faces impacts. While Nigeria is dealing with a rising inflation rate and security concerns, rising oil and diesel prices are another cause of alarm.
Diesel prices have now risen to almost N800 per liter. The public struggles because of the budget constraints of the government. While many countries across Asia and Africa offer subsidized fuel rates, Nigeria doesn’t.
Many critics question that even after becoming the most successful economy all across West Africa, inflation prevails. Therefore, as a last resort, the public has sorted to using Solar power.
This trend is becoming more common in countries that struggle financially due to loans or COVID impacts. In Asia, Pakistan and India are states where solar energy is becoming increasingly common.
Even though the option is quite rare and expensive at this point, it still replaces diesel nicely for Nigerians. The main reasons for rising fuel prices are non-subsidized prices and some prolonged COVID-19 impact.
Moreover, the war since Russia invaded Ukraine is a significant contributing factor. Officials have said that the war has had a financial and non-financial impact on prices worldwide.
Since solar panels have been appealing, the Chief power office at a popular solar energy selling industry says the opposite. He highlighted how they are having supply issues due to the sudden demand.
Supply chain issues and lack of means to utilize solar energy have now started to have monetary impacts.
When there is such a large and in market, companies have started to put in more money. In 2021 the milestone for the year-end was to install around 12MV of solar panels across Nigeria.
Even after closely meeting this goal, the solar company DayStone is struggling. They have to maintain a waiting list for many of the customers. Moreover, often people complain that they have stopped taking orders altogether!
Another Solar Energy company is Argnergy which has been receiving very high demands. Its officers said they had seen very high demands in the first half of 2022. These levels are much higher than the total sales and installations of 2021 combined.
Prospects Of Investment In Nigeria
Solar Power companies are relatively new in Nigeria and have been searching for investment for the past few years. There is a high interest of foreigners in this investment for several reasons.
Many investors are looking to put money in some environment-friendly businesses. Green energy, like the use of Solar panels, is a good option for them. And since it has profit prospects in Nigeria, the market will grow.
Nigeria has mainly grown since 2011-12 in terms of producing usable solar energy. It has around 11.4 MV of energy as of now. The country receives solar radiation of approximately 7.0 kWh in the northern areas and around 3.5 kWh on the southern coast.
This sunlight gives them ample space to make solar energy and install solar panels. An estimate by the country’s officials also suggests that Nigeria will have more than 20mW of solar by the end of 2030.
However, if diesel and fuel prices show a changing trend, some consumers might change their minds. In any case, solar energy can not wholly replace diesel and fuel. Therefore, subsidizing prices is very crucial for the long-term survival of the energy sector.