We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon
Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
The end of the long-running fuel subsidy last month has increased interest in solar, operators say, which could accelerate progress toward mitigating climate change in Africa’s largest economy. But experts say the government needs a clear plan to make the most of this new opportunity to advance Nigeria’s climate goals, which include eliminating fossil fuel-run generators widely used to keep the lights on in homes and businesses.
Reducing fuel costs was a popular but environmentally and economically costly system.
The state petroleum company, NNPC, says Nigeria spent 4.39 trillion naira ($9.7 billion) on the subsidy last year, leaving the government struggling to finance infrastructure projects, including rail systems that could help reduce emissions from vehicles.
Gas-powered generators also contribute significantly to emissions, having proliferated under the subsidy in a country where only half the population of more than 200 million have access to grid electricity. Those who do often endure blackouts.
Solar adoption, on the other hand, has largely been hampered by relatively high upfront costs, with only 1.25% of Nigerian households installing those systems, according to a 2022 study conducted by Boston Consulting Group and All On.
If 30% of Nigerian households turned to solar by 2030, 5 million metric tons of carbon dioxide would be avoided, reducing emissions from households by 30%, the study added.
The new president has acknowledged that removing the fuel subsidy “will impose an additional burden on the masses of our people,” who have seen gasoline prices triple while struggling with high inflation and unemployment.
It is a pain point that could lead to longer-term climate benefits.
“We are already getting a lot of customer inquiries and requests for solar,” said Segun Adaju, president of the Renewable Energy Association of Nigeria. “Many potential customers are already ordering their solar systems.”
“Also, this is a great opportunity to cut emissions by reducing the use of fossil fuels and shifting to solar and electric vehicles,” Adaju said. –
Any potential environmental benefits of eliminating the fuel subsidy would be lost without a comprehensive plan to make renewable energy more accessible and affordable, energy economist Tobi Oluwatola said.
He proposed incentives such as tax credits and low-interest financing for people who use solar and businesses that provide solar installations.
“Nigeria also needs to implement its net metering policy to allow solar owners to sell excess power to the grid during the day and reduce their net electricity bills. This would reduce the need for battery storage,” said Oluwatola, CEO of TAO Energy in Abuja.
Background: Nigeria’s oil resources have been exploited for decades by multinationals at huge cost to human and natural communities.
