Bayo-Ojo: Solar Energy Can Serve as Alternative to Petrol

Tomiwa Bayo-Ojo is the Managing Director and Chief Executive Officer, Volsus Energy Limited, an indigenous renewable energy firm. In this interview, he talks about the need for a shift to solar power, which he said would significantly ease the pains of the recent petrol subsidy removal. Emmanuel Addeh presents the excerpts

As a start-up renewable energy firm, how is Volsus Energy navigating the industry?

We recognised the great opportunities in the energy sector especially in renewable energy, and so that was how we started. The company was registered in 2016 and we have been delivering on various energy projects.

At Volsus Energy, we offer various services that we believe are key in driving the renewable energy space in Nigeria. The federal government is championing energy transition and we believe the government cannot do this alone but would need the support of the private sector to deliver on this.

For instance, a World Bank report in 2021, stated that over 45 per cent of the Nigerian population does not have access to electricity. That is a huge figure for the over 200 million estimated population.

It is also a clear fact that among the 55 per cent that has access to electricity, the consistency in hours of supply is still a huge crisis that the Distribution Companies (Discos) and the Nigerian Electricity Regulatory Commission (NERC) are still grappling with.

This is where some of us in the private sector come to bring state-of-the-art technologies that are integrated operations into the on-grid electricity to provide consumers with seamless hours of electricity supply. 

The Nigerian government recently stopped paying subsidy for petrol, causing the price to more than double. How can Nigerians deal with this?

Renewable energy products are advancing and becoming more affordable by the day. In this view, I advise that Nigerians embrace the use of solar power installations which would cut down their energy cost by a significant margin. Already, there is a global campaign that promotes the use of clean energy and that is what Nigeria stands to achieve if more Nigerians have access to electricity through the use of solar power installations and other renewable energy sources.

The other good thing about adopting solar energy is that it can meet various electricity demand needs. For instance, devices for just lighting and charging of appliances are getting more affordable by the day and available across stores, which could just solve those basic needs.

There are Solar Home Systems (SHS) for large homes, which could solve the lighting needs as well as power electronic devices and even refrigerators and freezers. Some other higher capacity solar energy installations can do the heating of water for bathing and other purposes in addition to the earlier stated functions. 

You just spoke about powering homes. What options are there for energising businesses?

For Micro, Small and Medium scale Enterprises (MSMEs) including salons, fashion homes, trading stores among others, lighting, powering points and refrigeration are crucial for their survival. There have been complaints of MSMEs spending over 50 per cent of their running cost on grid electricity through the Discos without getting commensurate hours of electricity.

And do you know that the Discos have separate billing computation for commercial and industrial connections? And even at that, most small-scale commercial customers do not have meters which expose them to high estimated billing.

That is just the spending on on-grid electricity but it goes beyond that with the recent petrol price hike which more than doubled, rising from about N195 per litre to over N537 since the ending of May 2023.

Business owners that have generators ranging from 1KVA to over 5KVA rely on petrol to run these devices in what is called self-generated energy since they cannot completely rely on the on-grid electricity. Also, acquiring these backup generators cost a fortune not to talk of the cost of running and servicing them on a daily basis.

According to power generator import data for 2022 provided by the International Trade Centre and the National Bureau of Statistics (NBS), Nigeria spent $3.47 billion or N2.7 trillion importing phones, generating sets, electrical transformers, and a host of other electrical equipment in 2022. A significant amount of this spending was on generators amounting to $468.65 million.

 Like I said earlier, this is just for importing the equipment; to run this equipment, you will have to buy at least two to five litres daily for the business. At N537, assuming you are buying from the NNPC retail stations, a small business owner may be spending over N2,000 daily to power the generator and that is about N52,000 every month just on petrol.

Perhaps, the total turnover and capital of that business may not be more than N300,000. If such a micro business owner spends nearly 20 per cent of his capital on just fuelling the generator, it is difficult to break even in the shortest possible time. That is why they will need to opt for solar devices that could have similar or lesser power output using a one-off capital budget and gradually then can expand the capacity.

There is also the mini-grid solar plant for communities that are tired of waiting to be connected by Discos or are tired of the estimated bills. These mini-grids operate by generating power and distributing the same within the community and then a taskforce is set to enforce commensurate revenue collection for offsetting maintenance and procurement purposes which is much cheaper than running through the grid.

People usually seek financing options for installing solar power devices. Are there funding options?

Yes, we often hear people say that acquiring solar energy is capital intensive and they may be right to some extent. But come to think of it, they only see it that way because they spend on the generators in bits. When accumulated, their spending on buying a generator, refueling it and calling the mechanic from time to time for repairs and maintenance is more costly than getting a solar power installation.

Thanks to the global campaign to promote renewable energy, the cost per unit of solar is getting cheaper and that means the equipment are getting cheaper. Hence, there are many installers that are willing to provide funding options for verified customers by partnering with banks and even telecommunication entities.

As the financial system continues to strengthen in Nigeria, more funding options to drive solar power acquisition as well as other utility goods will become easier.

You mentioned that solar power installations are durable in the long run. How long can an installation last?

Solar power installations are durable and have little to no maintenance cost in the long run. Depending on the appropriate energy audit, quality installation and material utilisation, a solar installation’s battery can go beyond five years while the solar panel can last up to 20 years.

With energy conservation and the usage of energy saving devices, a solar power installation can work optimally leaving room for redundancy or extra capacity which makes such devices to last longer.

Are there issues of substandard solar equipment in the market and how can a user identify quality products?

Like every product, there could be those that fall below the approved specification for a country and the global rating. That is for the standards authority to enforce and ensure that such devices do not get imported into the country. However, as a prospective solar power owner, you should insist on using tested and credible solar power companies.

The current administration is intensifying the implementation of the Energy Transition Plan (ETP) of which promoting solar power usage is at its core. How can the private sector support this plan towards the global net zero emission goal by 2060?

It is a global agenda and I am glad that Nigeria keyed into this early enough to drive access to electricity for its people and cut emissions in line with the Goal Seven of the Sustainable Development Goals (SDG).

The private sector is pleased to work with the government towards implementing this plan as we have the capacity to deploy more solar power products that include SHS, mini-grids, solar power plants among other innovations in the country.

We urge the government to provide platforms for mass solar power project financing, grant incentives in terms of tax waivers to solar energy companies and promote other policies that will facilitate this goal.