Lengthy power cuts are pretty much a daily experience in Nigeria. The country’s epileptic power supply has been identified by businesses as the second biggest obstacle to doing business in the country, after a lack of access to finance.
An unstable power supply is a major hindrance to Nigeria’s economic growth. It also costs the country an enormous amount of money. Quoting Nigerian government data, the International Monetary Fund (IMF) says that a lack of access to reliable electricity costs Nigeria an estimated $29 billion a year.
The situation comes with environmental and health risks, too. Many individuals, households and organizations have resorted to fossil-fueled generators. Nigerians spend an estimated $14 billion a year on small-scale generators. Estimates suggest it could increase the availability of electricity to almost 80 million people who currently have none.
It could also diversify the country’s energy portfolio. Most of this promise is based on the fact that solar-based generation capacity can be built up far quicker than traditional power plants.
Solar can also be connected to a country’s electricity grid. Or it can be run off it. This underlying advantage earns it the most practical option for improving access to electricity across Nigeria. It can also be used on its own, or as part of a hybrid mix with other technologies.
Solar-based energy, especially when done on a large scale, can contribute to reducing the cost of generating and distributing electricity in Nigeria. Renewable technologies could also help to develop an electricity market where those producing surplus energy can sell it to those who have a shortfall.
Currently, such a market is limited by conventional grid systems.
The potential for building solar units in small chunks and adding more capacity as time goes on makes solar-based power generation ideal for plugging the gaps in Nigeria’s energy requirements.
It is the most technically viable and cost-effective solution to the challenge of extending electricity to 80 million people who are currently without access to energy. Solar, in combination with other technologies, can reduce the cost of doing business in Nigeria.