The adoption of renewable forms of energy in Nigeria is expected to accelerate in the coming years, in line with the global trend. Solar energy, in particular, is gaining traction in Nigeria due to the country’s abundant sunshine resource, the opportunity for decentralisation of energy generation and supply, and the influx of funding initiatives for solar energy projects from a variety of governments and multilateral organisations. Nigeria has a landmass of approximately 924 km2, with an average daily irradiance per unit area of 5.535 kWh/m2 and an annual incident solar energy of 1831.06 kWh. The country’s sunshine hours range from 9 hours in the far North to 3.5 hours in the southern part of the country. With an average of 6 hours per day of sunlight, Nigeria receives at least 4.85 x 1,012 kW/h of the Sun’s energy per day, which is equivalent to the energy derived from about 1.082 million tons of oil per day.
We believe that the Nigerian solar power market will continue to expand as a result of growing commitment from the domestic and international business communities. With crude oil prices remaining elevated and diesel costs following suit, we believe that more large corporations, small and medium-sized organisations, as well as individuals would seek more stable and less expensive power sources, pushing solar adoption. However, growth will be constrained by the weak macroeconomic environment which has had a negative impact on businesses and persistent inflationary pressures that dampen consumer purchasing power. In addition, as a result of Nigeria’s foreign exchange liquidity issues, the importation of solar PVs is becoming increasingly more expensive, despite a global price decline. In our view, distinct and clear-cut policies to increase investor confidence and the effective implementation of established rules and projects are crucial to the short- to medium-term growth of the industry.
The 2022 Renewable Energy Industry report captures the following: