By Prince Okafor
Licensing competition between the electricity Generating Companies (GENCOs) Distribution Companies (DISCOs) and Renewable Energy (RE) developers, tax incentives, as well as challenges of expatriate quota have been identified as major obstacles bedeviling the electrification of Nigeria’s rural areas.
This was the view of energy stakeholders during a seminar of the Consulate General of the Federal Republic of Germany and the Energy and Environment Desk of the Delegation of German Industry and Commerce in Lagos on the Potentials of RE in Nigeria.
Speaking at the seminar titled: ‘Enabling Solar Photovoltaic (PV) in Nigeria’, the Project Manager, Dantata Solar Limited Mr. Oyeneye Babajide, said that government policies which includes tax incentives, licensing competition with the existing GENCOs and DISCOs, setting up Solar PV, business permits and expatriate quota are key obstacles to doing business in the Solar PV sector for rural areas.
Others, according to him, include finance, high-risk premium, warranty, backup, local knowledge, and government policy.
In his words, “The current electrification rate in Nigeria is about 60 percent and the demand keeps increasing by the day due to the increase in population and economic activities.
“It might interest us all that the industrial sector takes up only about 20 percent of this current energy and for a developing nation like ours that is in need of economic development, we cannot but say we need the industrial sector to work. “The main problem with this sector as we all know is the insufficient and epileptic power supply. The gap created by the present electricity providers can be covered up by renewable energy.
“Renewable energy in particular solar PV, can contribute immensely to the improvement of energy supply to this sector and to Nigeria as a whole. In the past and up till present, there are still a number of doubting Thomas on the workability of solar PV. Developers and investors in the solar sector need to keep up the sensitization of the public on the reliability of this source of energy.
“Part of issues faced by local developers is warranty. The cost of replacing defectives modules and batteries under warranty is almost equal to the cost of buying and it reduces the confidence consumers have in this sector.
“Cost of batteries which is the major source of back up is unimaginably high. The fact that we have to use batteries as the major back up makes the cost of this solution double. Also off the shelf batteries in Nigeria have proven to be very unreliable. The rate of failure in lead-acid batteries is rather high and the warranties are utopia to claim.”
Discussing further on the challenges faced by the nation, the Vice President of Solar23 GmbH, Berlin, Oliver Drucke stated that Nigeria needs a solution that is feasible and realizable, as there is no room for inefficiency.
“Nigerians complain a lot about solar not working, but the truth is Nigerians are not making it work. There is the need for synergy amongst Nigerians to make it work.
“The current challenges for PV market developer in the country include, negative perception due to bad quality products (Standards and specifications for components, weak value chains).