With The Increment In The Price Of Diesel, Will Solar Panels Be A Good Investment For Companies In Nigeria?

Ebelechukwu Egbuna
By Ebelechukwu Egbuna 5 Min Read

The extreme rise in the cost of diesel in Nigeria has affected the routine system of operation for Nigerian companies. Companies have either gone remote or hybrid to cut the cost of running their generators daily.

In 2021, Diesel in Nigeria was sold at about N210 per liter the price has extensively risen to about N860 per liter this year.

Analysts tagged the increment in the price of crude oil and gas price to the Ukraine-Russia conflict as both countries are major players in oil production and refining. Countries dependent on Russia for oil are still trying to wean off and find a stable source.

Nigeria, a producer of crude oil in recent years has dwindled in production quantity. 

According to the Organization of the Petroleum Exporting Countries, Crude Oil Production in Nigeria decreased to 972 Barrels per day in August 2022 from 1084 Barrels per day in July 2022

How much diesel does a generator consume?

A 10/12 KVA generator used at full capacity will burn at least 3 liters of diesel per hour.

A 12 KVA Generator

That value multiplied by 12 hours of functionality for 5 days would mean that an estimated amount of 180 liters would be consumed in a week, which would in turn cost about 140,000 thousand per month. 

(Phew! That is a lot of money going to electricity if you ask me).

Is solar energy more cost-effective?

Just as hydroelectric power is to water, solar power is to the sun.

The working mechanism is pretty straightforward. When the sun shines on a solar panel, energy from the sunlight is absorbed by cells in the panel. 

The energy absorbed creates electrical charges that move in response to an internal electric field in the cell, causing electricity to flow.

How much do these panels cost?

The cost of installing multiple solar panels and batteries for a large building in Nigeria would run into millions of Naira. 

The upper side of this is that it is a one-payment plan, in the sense that, you do not need to make monthly payments, compared to electricity/diesel fees. 

Companies like Wavetra Energy, a Nigerian company that specializes in the design, construction, Installation, and maintenance of solar power systems, offer different packages and types of solar panels. 

Image Credit: Wavetra

They are mostly grouped according to the power level of the panels and range from as low as 1 to as high as 60 Kilovolt-amps.

A 1KVA panel system which can power 5 LED bulbs, 4 Table fans, a refrigerator and at least 2 laptops would cost about 550,000 Naira to install.

A 5KVA panel system would power more appliances and cost about 3.6 million Naira, and the list goes on and prices higher.

Nigeria’s Sterling Bank located in the heart of the city of Lagos recently keyed into harnessing solar energy. 

In the earlier parts of May 2022, a picture of the outer walls of their headquarters coated in solar panels, circulated on Twitter.

Sterling Bank building with solar panels

The bank further released a statement that they would be launching options where users can purchase or lease solar equipment directly from vendors listed on their e-commerce. The bank will also offer financing at preferential rates to customers willing to lease a solar system and later become its owner. 

It’s not all pros with the panels, a significant con is that it occupies a lot of space and costs a lot short-term.

From a long-term point of view, I think the pros outweigh the cons.

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Ebelechukwu Egbuna is a marketing and Content writing intern here, at Tech Nova.
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