Off-grid solar power essential in Nigeria, the report said

A solar home system is the best, most affordable solution to providing full Tier 1 power access to most of the underserved segments in Nigeria and other sub-Saharan Africa, a new report says.

The report, entitled “Commercial and Economic Feasibility Study to Improve Off-Grid Solar Integration in Sub-Saharan Africa,” was prepared by Dalberg Global Development Advisors.

The European Investment Bank, in collaboration with the International Solar Alliance, commissioned the study to determine the economic and commercial feasibility of improving off-grid solar energy in sub-Saharan Africa.

While off-grid solar solutions mainly include solar home systems and mini-grids, the study focuses on enabling energy access via private solar home system solutions.

“The increased use of off-grid solar technology across Africa is essential to deliver clean and affordable energy and transform the lives of millions of people,” said EIB Vice-President Ambroise Fayolle.

He said the new study combines experience and expertise from successful off-grid deployment to outline how investments could be unlocked to improve access to solar power.

“The groundbreaking analysis shows how closer collaboration between African, European and global partners can remove investment and technical barriers that hamper sustainable development and the green transition,” he added.

The report divided the SSA countries into five different clusters based on their common challenges, electricity needs, and the maturity of their off-grid solar markets.

Nigeria is one of those countries with very high electricity needs with a non-electrified population of more than 50 million. Others are the Democratic Republic of the Congo and Ethiopia.

The report states that the three countries “have a high unmet need for solar home systems despite some market penetration, mainly due to a large population and low electrification rates”.

It added, “In some of these countries, off-grid solar providers sometimes serve urban areas, but some segments remain underserved.

“Given the needs of these countries, urban areas alone would offer large markets for SHS players and would be easier to serve than rural areas.”

According to the report, Nigeria has a non-electrified population of 90 million, Ethiopia 60 million and the Democratic Republic of the Congo 70 million.

It states: “Much of the electricity demand in these countries is concentrated outside urban areas with a significant difference between rural and urban electrification rates.

“Most of the countries in these segments have relatively active OGS markets in the urban areas; However, large parts of the urban and rural areas remain unsupplied or undersupplied.

“There are conflicts in some parts of these countries (e.g. northern Nigeria, parts of the Democratic Republic of the Congo).”

The report identified the lack of affordability for customers and the political and economic environment as common challenges for the growth of solar home systems in Nigeria and the other two countries.

It states: “A low penetration of mobile money together with the high prevalence of unreliable counterfeit products significantly reduce customer capacity and the willingness to pay for SHS products.”

She added that regulatory barriers, including high import duties and VAT on SHS products, significantly increased service costs for private OGS operators.

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