Electricity Business in Nigeria

Can Electricity Business Prosper in Nigeria?

Are people willing to pay for the energy they consume?

Having pointed out some of the numerous problems in the Electricity problem industry, it will do a lot of good to proffer solutions before we delve into more problems.

Recall, I mentioned that over 60% of Nigerian households generate electricity using privately owned generators, and this is on continuous increase. To run a 2.5kVA generator continuously for 24 hours every day for one year, one will need to spend about ₦751,371.43 on petrol; furthermore if we include the capital expenditure and maintenance costs we will arrive at about ₦951,371.43. The lifespan of combustion based engines such generators is five years; consequently, running this generator continuously for five years, the owner will spend   about ₦4,156,857.14.

Now let us look at an alternative, solar power. Solar panels average cost is about ₦600 for 1VA (1W assuming power factor is 1). A solar power system comprises of the solar panels, the inverter for converting from DC to AC and the batteries for storage. The solar panels convert the light energy from the sun during the day to electrical energy in DC form. The inverter system has the inverter that converts DC electricity to AC electricity and the battery charger used to charge the batteries. The batteries are used to store energy during the day and the inverter will revert to the stored energy in the batteries for supply of power in the night. It worthy of note to mention that solar panel efficiency drop by about  1% or less  per year; thus, after twenty years solar panels can still be 80% efficient.

Below is a cost comparison between a 2.5kVA petrol generator and 2.5kVA solar power system courtesy of Yellowfin Energy Solutions LTD.

Look at the table above, we can deduce that solar has a very great cost advantage over petrol generators; 32% in savings over 5 years, 46% in savings over 10 years and 53% in savings over twenty years.  The only challenge here for solar power is initial starting cost and this is double the annual cost for petrol generator.

Thus, the pertinent issues here are starting capital, and repayment plan from the consumer. Most people I have informed of this idea are sceptical of such huge capital and the entrepreneurs are sceptical about making profits and securing capital investments.

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