We all know that Nigerian factories need a reliable power supply to run smoothly. But power supply from the national grid is erratic as the available supply falls short of total electricity demand. When the grid power is available, supply can be unstable due to blackouts. To ensure steady flow of electricity, factories rely on giant diesel generators as their primary source of power.
Some Nigerian businesses even prefer to disconnect from the grid altogether to prevent damage to their equipment from unstable voltage.
However, diesel generators are increasingly untenable due to their exorbitant costs. Since March, diesel prices have surged more than 300% from 250 naira to about 800 naira per liter, depending on the location.
Its impact on the Nigerian economy and businesses has been alarming.
In the first five months of this year, mobile network operators say they have spent six times what they spent last year just on diesel alone. Manufacturers and small businesses alike are shutting down, or raising prices while banks are reducing operating hours.
Even though a growing number of Nigerian businesses are saving millions every month by adding solar energy to their energy mix, some business owners are skeptical that solar can power their operations.
In this post, we'll debunk three common misconceptions people have about powering their business with solar.
Myth #1: Solar can’t power my factory
Solar energy can power your factory when used in combination with other power sources. In the industry, we call this a solar hybrid power solution: solar is coupled with diesel or gas-fired generators and possibly battery storage to provide the power your factory needs.
It is true that solar power alone cannot provide 24/7 power as the sun is not always shining. But with a battery storage system, you can store excess power which you can then use at nighttime.
With solar in the mix, facility managers can reliably power factory operations and save costs. The Primlaks Group produces its Sympli food products using solar to provide 30% of the power it needs during the day.
Depending on the weather and how your company’s system is configured, solar can become your primary daytime power source. At the location of Grand Square Supermarket in Ikeja, solar energy can power up to 86% of its daytime power consumption.
By using a solar hybrid energy setup in your factory, you can save up to 40% on energy costs. It also means less time and money spent on maintaining diesel generators.
Another bonus: since the generators are not being overused, they will last longer.
Myth #2: Solar is too expensive
Solar power is much cheaper than diesel generation and is on par with the grid:
Even with battery storage, it is still cheaper than diesel-powered generators. Newer technologies and more efficient production methods have reduced the cost of solar energy by 90% in the last ten years. And the prices are still falling.
Compared to the higher cost (and occasional scarcity) of diesel-powered systems, Commercial and Industrial (C&I) solar hybrid systems are more affordable and more reliable.
Unlike residential solar systems which usually require upfront payment for the solar equipment, solar energy installations for factories and multi-location businesses (like banks and service stations ) are offered under Solar-as-a-Service (SaaS) and Power-as-a-Service (PaaS) models, respectively.
Under the SaaS model, companies don’t pay for the equipment as they don’t own it. Instead, the factories pay for the power they consume, like a utility and this is charged on a tariff basis. Some Power Purchase Agreements (PPA) may stipulate a standard minimum energy fee. PaaS, on the other hand, involves taking over the power management process of the company, for a fixed monthly fee.
What’s more? Under the C&I model, industrial manufacturers save on energy costs, thus reducing diesel and grid consumption as well as generator maintenance costs.
Myth #3: Solar panels only work during peak sun hours
Solar panels still work during non-peak sun hours.
What are peak sun hours? Direct sunlight carries about 1,000 Watts (1 kW) per square meter of energy. Peak sun hours are the average number of hours in a day where the intensity of the sun reaches 1,000 Watts per square meter.
The number of hours of peak sunlight determines how much of the rated electricity output your solar installation can generate. But solar panels do not only work during peak sun hours. It is simply when they are most effective. With new smart solar inverter technologies, the energy produced from the sun at every point in time is maximized.
Peak sun hours are critical to driving efficient energy production from your solar and can vary from place to place. Luckily, West Africa has a lot of peak sun hours. And in Nigeria, there is little variability between regions. Lagos has on average 5 hours of peak sunlight. The remaining hours of sunlight may be cloudy or have low sun intensity. Minna in Niger State has an average of 7 hours. Solar panels typically need only about 4 hours of sunlight to produce a substantial amount of electricity.
When is the best time to add solar to your energy mix?
Manufacturing companies in Nigeria need reliable power to operate smoothly. Commercial and industrial users of electricity need between 8,000 and 14,000 MW of power and the national capacity is only 4,000MW.
The increasing cost of diesel—if you can find it–threatens business operations. But hybrid solar power systems can effectively meet the electricity needs of businesses from retailers to large factories.
With the Solar-as-a-Service model, there is zero-upfront cost to set up a reliable solar system for your factory. And there is abundant sunlight in Nigeria to make it viable.
With rising costs and occasional scarcity associated with diesel-powered electricity, there has never been a better time to switch to solar energy.
At Daystar, we’re helping more businesses find answers to their questions about reliable solar energy. If you’re interested in reducing your energy costs, talk to us.