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STAND-ALONE OFF-GRID SOLAR MARKET RESEARCH: Nigeria

 

Nigeria’s population is estimated at 201 million,3 of which 77 million are unelectrified. Those connected do not necessarily fare better, as 80 per cent supplement unreliable electricity with a host of alternatives, largely diesel or petrol generators. The International Energy Agency (IEA) estimates that in the next 10 years (until 2030), the national grid will not reach national coverage and hence a large part of the Nigerian population will still depend on off-grid solutions for electrification

There also remains a large market amongst grid-connected customers as only 25 per cent of them receive at least four hours of daily power. These off-grid and underserved markets exist all over Nigeria and across economic status. By 2040, the Nigerian government aims to achieve 100 per cent rural electrification with 5 per cent through stand-alone solar (SAS) solutions. The SAS sector has witnessed significant growth evidenced through increased donor, government, and private sector investment, with the government now launching a plan to deploy 5 million solar connections via solar home systems (SHS) and mini-grids by 2023. About 324,000 SAS units were sold in 2019, up from negligible sales five years earlier and Nigeria currently ranks fifth globally in sales volume for key off-grid solar (OGS) markets. The OGS market opportunity is estimated at USD 9.2 billion per year, with the SAS sector alone receiving USD 227M between 2015 to date. However, several supply, finance, demand, and regulatory barriers exist that inhibit scaling of the SAS market.

The SAS market has also seen a trend in product diversification and innovation across the pico-solar, solar home systems, component based solar systems, and productive use technology categories. This innovation is reflected in the rising adoption of PAYG business models. With the realisation that universal grid coverage is neither possible, nor economic in the short to medium term, SAS can, and should, take a more prominent role in the electrification mix in Nigeria. However, the market suffers insufficient data on market size, segments, products penetration, potential opportunities in retail and wholesale, mini-grids, and standalone systems, after sale services, and support to help scale up financing models.

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