Solar Energy: Nigeria Ranks Among Top 5 With $4.6m Market Value – Report
Chibisi Ohakah, Abuja
With a market value of $4.6 million, Nigeria ranks among the top five economies with largest cash market of off-grid solar energy, latest Global Off-Grid Solar Market Report has said.
The report was put together by the Global Off-Grid Lightening Association (GOGLA), the global association for the off-grid solar energy industry.
According to the report, Nigeria’s off-grid solar cash sales increased to $4.6 million [representing 58.6%] in 2018, from $2.9 million in 2017.
The volume of products sold however reduced by 5.3% to 204,155 in 2018, from the 215, 575 recorded in 2017. The off-grid solar appliances such as TVs, fans, refrigeration units and water pumps were sold to people living in off- or weak-grid areas.
The top countries with the largest cash market are India, Kenya, Ethiopia and Nigeria with $94.3 million, $18.0 million, $10.8 million and $4.6 million respectively.
The off-grid products are sold in cash and the PAYGo (pay as you go) model. But from the report, both the PAYGo and cash model were used in 2018 unlike in 2017 when only cash model was used. On the PAYGo model, Nigeria slipped to the seventh position in H2 2018 having $2.4 million from the fourth position in H1 2018 with $2.6 million. The volume of products sold dropped by 35 percent to 32,439 in H2 2018 from 50,319 in H1.
The report however said Nigeria moved up by three places to the fourth position in 2018 from the seventh position in 2017. The report considered indices from 46 countries, includes data for national markets where at least three manufacturers reported sales.
“The macroeconomic situation in Nigeria in the first half of 2018 seems to be more stable than it was in 2017. Inflation has remained high and in double digits, but it is on a slightly downward trend compared to the previous two years.
Foreign exchange is more available to enable imports but shortages of it still remain an issue,” the report stated.
The report is divided into half (H) year periods. For H1 2017, between the period of January-June, Nigeria had $1.7 million and in H2, between July-December, it had $1.2 million totalling to $2.9 million. For 2018, H1 and H2 had $2.7 million and $1.9 million respectively, which give a total of $4.6 million.
Nigeria was in recession for five consecutive quarters but returned to positive growth of 0.72 percent in the second quarter (Q2) 2017 from -0.67 percent in Q1 2016. Since the exit from recession, there has been availability and stability of foreign exchange in Nigeria.
The International Monetary Fund (IMF) notes that Nigeria has an electricity system that has a huge gap between the cost of generating electricity and the tariffs. The gap was estimated at $2.4 billion as at 2015-17.
The Fund said the gab can be closed by reducing the cost of generating and distributing electricity, and through increasing the tariff by at least 50%.