According to reports, the foreign exchange crisis is increasing the cost of solar equipment as businesses and households hunt for alternative energy sources in response to skyrocketing diesel prices.
According to BusinessDay’s research, some solar companies are taking advantage of recent developments to raise the cost of solar systems, ultimately passing along to consumers the effects of the naira’s increasing pressure. This is due to mounting forex problems and rising inflation.
“To stay in business, we had to change with the times. The price of their solar panels has increased for all of our suppliers/partners, according to Ubah Benson, CEO of Solatrify.
Movie Ugono, CEO of Solynta, a different solar-related business owner, emphasized the company’s strategy for minimizing the effects of the tariffs.
“Since panels make up a small portion of our entire cost of sales, the overall impact on our company has been minimal. To offset the higher prices, we were able to make savings in other areas of our supply chain, according to Ugolino.
A solar panel with a power wall inverter and a controller now costs N725,000, up from N700,000 in early July, according to a BusinessDay market study.
Additional research revealed that Rubitec Nigeria raised the cost of 200W 24V monocrystalline solar panels, primarily utilized by families, from N40,000 to N52,000.
“It is unfortunate that the cost of solar components would increase as a result of the naira’s decline in value against the dollar. As a result of our reliance on imports, our domestic manufacturing capacity is practically nonexistent. According to Collins Obi, an energy specialist with a multinational company based in Lagos.
According to him, the state of the nation’s energy access is intolerable proportions, and it would be suicide for currency fluctuations to continue to jeopardize the feasibility and cost of energy access initiatives.
The Naira has recovered some of its losses this week after falling as low as N710 to the dollar last week.
Developers and mini-grid operators may not be able to pay debt commitments or provide investors with the promised returns due to the ongoing devaluation of the naira, Obi continued.
According to Daramfon Bassey, manager of Clean Tech Hub, rising currency rates and ongoing market volatility have driven up the price of imported solar components.
Because private solar companies must pass along the expenses to end consumers, making them expensive, Bassey claimed that the cost of importing solar components has increased.
Despite having a population of more than 200 million and an installed capacity for electricity of 12,500 megawatts (MW), Nigeria, the largest economy in Africa, relies largely on diesel and gasoline-powered generators for both corporate and residential needs.
Diesel’s price, which is not subsidized like gasoline, has almost tripled to N800 per liter. The majority of such growth was brought on by Russia’s invasion of Ukraine.
According to the Nigerian Energy Commission, the nation spends $22 billion a year on fuel for generators.
According to industry experts, the adoption of solar power is anticipated to be less than 2 percent, and some companies think it is inappropriate for usage on a broad scale.
According to research conducted earlier this year by the Boston Consulting Group and All-On, a Shell-funded company, Nigeria has 1 watt of installed photovoltaic solar panels per person, compared to an average of 8 watts in other rising economies like South Africa.
According to Anthony Akpasoh, energy expert and founder/COO of Tonipash Energy, “the current FX crisis is a huge concern for the acceptability of renewable energy; More than 90% of solar components are imported.”