Centre for the Promotion of Private Enterprise (CPPE) has expressed concern over the government’s plan to ban the importation of solar panels as a measure to promote domestic production.

Strongly advising against this policy proposition, the Chief Executive Officer (CEO) of CPPE, Dr Muda Yusuf, said Nigeria “has one of the worst energy accesses in the world with a per capita electricity consumption of about 160kWh, far below the Sub-Saharan average of 350kWh.

The Federal Government recently announced plans to halt the importation of solar panels to promote local manufacturing and advance the country’s shift towards clean energy.

Making this known last week, the Minister of Science and Technology, Uche Nnaji, stated that the decision aligned with a presidential directive prioritising local content in science, engineering and technology. He also highlighted Nigeria’s capacity to produce its solar panels, claiming the country “has the resources and technical know-how” to build them locally.

Industry analysts kicked against this move, saying the country’s huge energy deficit and a dearth of local companies to adequately meet demand would cause scarcity and leave many homes and businesses without energy.

Presently, just about 40 per cent of Nigeria’s population is connected to the national grid, with power supply difficulties experienced around 90 per cent of the time. Despite the forced transition to Band A for most businesses and industrial areas around the country, the Manufacturers Association of Nigeria (MAN) said last year that manufacturers spent about N500 billion on alternative energy sources.

Buttressing MAN’s position, last month, Minister for Power, Bayo Adelabu, said well over 60 per cent of the nation’s manufacturing industry was completely off-grid due to multiple grid failures.

In a recent report which focused on advancing the Energy Transition in Lagos State and, by extension, Nigeria, Sustainable Energy for All (SEforALL) revealed that Micro, Small and Medium Enterprises (MSMEs) owners in Lagos spent N5.3 trillion last year on petrol and diesel to generate power for their businesses.

Pointing out that Nigerians rely heavily on private generators, it said an estimated 14 to 20 gigawatts of power are being generated off-grid. The adoption of solar energy solutions, Yusuf said, is one of the most impactful government initiatives to tackle the problem and has gained remarkable traction. “A ban on the importation of solar panels in the face of glaringly inadequate domestic production capacity would worsen the country’s energy crisis,” he said.

According to the CPPE boss, it is a complete negation of the government policy to deepen and promote the adoption of renewable energy solutions by households, small businesses, rural communities, government institutions and other organisations.

He added, “This adoption of solar solution has gained an impressive momentum in the last two years, especially in the light of the soaring energy cost in the economy. Also, it would worsen the problem of energy access, as it would make the cost of solar energy solutions prohibitive, putting it beyond the reach of the average Nigerian.”

Sharing in the minister’s vision of domestic production of solar panels, which is good for self-reliance and forex conservation, he argued that the transition process should be painstaking, diligent and gradual.

Urging the government to instead support investors in the solar panel production with robust fiscal and incentives, tariff concession on intermediate products and concessionary long-term financing at a single-digit interest rate, he advised a slash on the import duty on batteries, inverters and wind turbines to five per cent.

This, he said, would significantly improve energy access, energy security and productivity in the economy. The National President, Association of Small Business Owners in Nigeria (ASBON), Dr Femi Egbesola, regretted that businesses and manufacturers were yet, again, going to suffer another needless obstacle that would make production difficult and raise input costs.

He pointed out that constant failures and problems with the costly national grid forced many businesses to look for alternative means of energy and when diesel and petrol costs became too high, they turned to clean energy.

Egbesola added that “local production is not yet as viable as the country would need” to meet local demand. “What the government is proposing is not bad, but our local production is not yet there. A ban now would only lead to scarcity, unmet needs and a wider energy deficit.”

Meanwhile, a solar panel dealer, Segun Ayoola, said the news of the ban was met with apprehension and concern among solar panel dealers. He said those that had panels, especially the high-grade panels, were hoarding them, anticipating a price hike. He revealed that the panels doubled in price overnight as the dealers willing to sell inflated their prices.