Amid lingering power crisis, solar product sales in Nigeria increased by over 62 percent in the second half of last year, a new report released on Tuesday by the global association for the off-grid solar energy industry, GOGLA, shows.
The report, which was produced by GOGLA, Lighting Global – a World Bank initiative, Efficiency for Access Coalition and Berenschot – a Dutch management consultancy firm, said Nigeria represented 66 percent of all the off-grid lighting products sold in West Africa.
“Nigeria represents over half of West African sales and therefore the trends at the regional level are in large part reflective of the situation in Nigeria. Nigeria has again recorded particularly high sales volumes this reporting round reaching 391,000 units. This is a 62 percent increase on the first half of 2021,” it said.
According to the report, the growth in volumes was particularly high for solar home systems (SHS) ranging from 11 to 100Wp which saw their sales double.
It said the vast majority of cash sales were solar lanterns and the vast majority of pay-as-you-go (PAYGo) sales were multi-light systems and SHS.
PAYGo is a digital financing technology that allows end-users to digitally pay for solar energy in weekly installments.
“After experiencing its worst recession in over 20 years, Nigeria returned to growth through a combination of recovering oil prices and government intervention to contain the effects of the economic shock,” the report said.
It said the government’s response to the pandemic had a direct impact on the energy sector as steps were taken to remove petrol subsidies and electricity tariffs were adjusted to be more cost-reflective.
Data from the report show that Nigeria recorded its highest yet half-year sales for key appliances. Sales volume grew 55 percent compared to the first half of 2021, while sales grew by 75 percent for TVs and 53 percent for fans.
It said not many companies reported sales of solar water pumps or refrigeration units to be included in the report.
It said: “13,700 TV sales were reported for the second half of 2021. 86 percent of these units had large or extra-large screen sizes. All units were PAYGo-enabled and the vast majority were bundled with a SHS. 24,600 fans were sold between July and December 2021.
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“The vast majority were bundled with a SHS. While the majority of fans sold were reported as cash sales, anecdotal evidence suggests that these may often actually be reported as cash as the appliance itself is not PAYGo-enabled, but are actually sold with a SHS that is financed as PAYGo.”
Analysts at CSL Stockbrokers Limited said in a note last Friday that pricing remains one of the biggest challenges facing the Nigerian power sector.
They noted that the power sector value chain’s generation and distribution segments were privatised in 2013 in order to attract new investments and promote private sector efficiency in running the divisions.
“Despite this, it is commonly acknowledged that the privatisation process has not produced the intended benefits seven years later,” the analysts said.
They added that the sector had been plagued by several challenges, including lack of cost-reflective tariffs, poor metering coverage, energy theft, decrepit infrastructure, and regulatory stranglehold.
“However, of all these challenges, the lack of appropriate pricing for power remains the biggest challenge,” the analysts said.