Concerns have been raised by business owners regarding the escalating cost of electricity, which is impacting their investments. This article delves into the potential of solar energy in addressing businesses’ power challenges.
In countries like Nigeria, access to electricity is considered a luxury. Customers who receive a minimum of 20 hours of electricity are classified as Band A and pay a premium for their consumption. On the other hand, those outside this category may experience days without electricity and often bear the brunt of the lack of power supply. As a result, many businesses, even small ones, heavily rely on electricity for their operations, leading to significant expenses on fuel for generators.
The increasing prices of petrol and diesel have further exacerbated the financial burden on business owners and customers not classified under Band A. This situation highlights the urgent need for alternative energy sources, with experts advocating for the adoption of solar power as a sustainable solution.
During the 2024 Nigerian Oil and Gas conference in Abuja, Adelabu revealed that Nigerians spent a substantial amount on self-generated power, totaling N16.5 trillion based on research conducted in 2023. This expenditure surpasses the costs incurred by Band A customers, despite the latter enjoying uninterrupted 24-hour power supply.
Adelabu’s remarks coincide with complaints from members of the Manufacturers Association of Nigeria regarding the debilitating impact of electricity costs on their businesses, underscoring the pressing need for a viable energy strategy.
In reality, business owners find themselves in a quandary. While those in Band A regions decry exorbitant tariffs, counterparts in other areas lament the daily expenses associated with electricity consumption. This predicament necessitates a sustainable solution to mitigate escalating energy costs.
For many firms, energy expenditures surged significantly in 2023 compared to the previous year. Notably, BUA Cement factory witnessed an 86.5% increase in energy costs, Dangote Cement’s expenses rose to N399 billion, and Lafarge spent N75 billion on energy in the same period.
Kunle Olubiyo, President of the Consumer Protection Network, highlighted that several manufacturing plants, particularly those in plastic production, primarily rely on diesel generators to prevent production disruptions. This heavy reliance underscores the critical need for sustainable and cost-effective energy solutions.
Recent data from JPMorgan Chase revealed the substantial energy consumption by tech giants like Alphabet, Amazon’s cloud arm, Meta, and Microsoft, surpassing Nigeria’s total electricity generation in 2022 by a significant margin. This underscores the disparities in energy usage and the imperative of transitioning to renewable energy sources like solar power.
Despite having a population exceeding 200 million, Nigeria grapples with erratic power supply, resulting in millions of citizens living without electricity. Recurrent grid collapses, attributed to aged infrastructure and vandalism, further exacerbate the country’s energy challenges.
The adoption of solar power emerges as a promising alternative amid the ongoing struggle to bolster power generation in Nigeria. The decision by the Kano Electricity Distribution Company to implement solar solutions across multiple states demonstrates the viability and effectiveness of solar energy in addressing energy shortages.
Why opt for solar energy?
As the world embraces sustainability and environmental consciousness, businesses are increasingly turning to solar power to reduce costs and minimize their carbon footprint. Here are compelling reasons to consider solar energy:
Cost savings on energy
Solar power enables businesses to generate their electricity, reducing dependence on the grid and resulting in significant cost reductions. With solar panels, companies can lower energy expenses, freeing up resources for essential operational needs.
Environmental advantages
Solar energy is a clean, renewable energy source that produces zero emissions, fostering a sustainable and eco-friendly approach. By embracing solar power, businesses can slash their carbon emissions, aligning with environmental stewardship and appealing to environmentally conscious consumers.
Enhanced energy self-sufficiency
Solar power grants businesses autonomy in energy generation, reducing reliance on the grid and ensuring a reliable power supply. This autonomy proves vital for businesses with critical operations that demand uninterrupted electricity, giving them control over their energy supply.
Positive brand image
The adoption of solar power signifies a commitment to sustainability and environmental responsibility, enhancing a business’s reputation. This proactive stance appeals to customers and skilled professionals who value corporate social responsibility, thereby bolstering brand image and market appeal.
Low maintenance costs
Unlike traditional diesel and petrol-powered generators, solar power systems entail minimal maintenance costs, offering businesses a cost-effective and sustainable energy solution for their long-term operational needs.
Switching to solar power can benefit businesses by offering low maintenance costs and a long lifespan, lasting for years. This results in reduced maintenance expenses and fewer interruptions in operations. Although batteries may need replacement after some years, the cost is significantly lower compared to buying fuel or paying Band A tariffs.
Cost of installation
The desire for solar power is often dampened by concerns about affordability. Recent reports indicate that the costs of solar panels and batteries have been increasing, mainly due to Nigeria’s volatile foreign exchange rate. As a result, many individuals interested in transitioning to solar power find the cost prohibitive.
To alleviate this burden, solar energy companies now offer monthly payment plans to make solar power more accessible.
Salpha Energy’s Chief Executive Officer, Sandra Chuckwudozie, emphasized the importance for businesses to manage their electricity consumption effectively to save on energy costs.
Chuckwudozie highlighted that a small business typically spends around N6,000 on electricity per working day, amounting to approximately N1.6 million annually. She noted that many businesses tend to overconsume energy, resulting in unnecessary expenses.
She recommended aligning energy consumption with the solar capacity to be installed and promoting energy conservation by using energy-efficient appliances.
Chuckwudozie asserted that despite the initial investment in solar, it is still a more cost-effective option compared to traditional electricity tariffs or fuel.
For individuals unable to afford upfront solar installation costs, Chuckwudozie suggested utilizing financing options to spread the payments over a specified period. The cost of solar installations typically ranges from N500 to N1.5 million, depending on the capacity.
The Salph Energy boss reiterated the long-term benefits of solar power, emphasizing the potential savings compared to conventional energy sources.
NewsNow highlighted the increasing popularity of streetlights and solar bulbs in Nigeria, with traders opting for solar lighting solutions over traditional fuel-based alternatives.
According to the International Energy Agency, solar photovoltaics are projected to experience rapid growth in Nigeria, with an average annual growth rate exceeding 50% over the next three years.
In conclusion, embracing solar power can deliver various advantages to businesses, ranging from cost savings and environmental benefits to enhanced energy independence and positive brand image.
By investing in solar power, companies can future-proof their operations and contribute to a sustainable future. As Nigeria grapples with energy poverty and exchange rate fluctuations, solar power emerges as a viable and eco-friendly solution to address these challenges.
Transitioning to solar power enables individuals and businesses to reduce reliance on the national grid and progress towards energy independence.