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SolarQuarter Africa had an exclusive conversation with Dr. Segun Adaju – CEO, Consistent Energy Limited and President, Renewable Energy Association of Nigeria (REAN) and understood about the organization REAN and how it is promoting and supporting the solar industry of Nigeria. He also told us about the current government policies with regard to the solar sector and how the region has tackled and emerged out of the Covid crisis.
Please give our readers a brief introduction about yourself and your association REAN.
My name is Dr Segun Adaju, Chief Energizing Officer at Consistent Energy and President, Renewable Energy Association of Nigeria. I
come with over 2 decades of banking experience and have been in the renewable energy sector for over 10 years as a consultant, energy expert, financial advisor and project developer. I over see an solar energy company that is the leading roofto solar finance company in Nigeria with special attention to productive use leveraging solar energy (PULSE) for SMEs and C and I. I have won several awards across the continent and recently was a Nominee, Lifetime Achievement of the Year Award by Africa Solar Industry Association (AFSIA).
REAN is a non-profit industry association founded by key players and stakeholders in the renewable energy sector with the vision to promote strategies that will improve the contribution of renewable energy up to forty percent (40%) of the Nigerian National Energy Mix by 2030. Launched in November 2016, REAN has grown to be one of the leading renewable energy associations in Sub Saharan Africa (SSA) with over 140 members cutting across five technologies i.e. solar, wind, small hydro, biomass and geothermal. REAN is also leading the formation of the West African Renewable Energy Alliance (WAREA) where Dr Segun Adaju has been nominated as the Interim Chair. REAN has influenced greatly the policy formation and industry direction in Nigeria especially around distrtibuted renewable energy development such the mini grid policy in Nigeria, one of the best in SSA.
How is your association promoting and supporting the solar industry of Nigeria?
REAN has influenced greatly the policy formation and industry direction in Nigeria especially around distributed renewable energy development such the mini grid policy in Nigeria, one of the best in SSA. With the steady increase in the membership of the association, we have a wider reach to the industry key players which influenced the setting up of working groups to help address the challenges that affect different areas of the sector. REAN promotes strategies that will improve and influence policies that encourage investments, sustainability, and the contribution of RE to the national energy mix. The Association has also supported the development of a robust local content framework for the industry with many of our members already benefiting or planning to benefit from programs that supports local manufacturing of technologies.
REAN also developed research documents focused on driving local content in the Renewable Energy sector and a report on access to finance for the industry players As an affiliate member of the Alliance for Responsible Battery Recycling (ARBR), REAN also developed a ULAB policy document to promote responsible management and disposal of used lead acid batteries. In partnership with GOGLA, REAN is also working with eight (8) other national renewable energy associations to set up the West African Renewable Energy Association (WAREA) REAN has contributed to several policy and advocacy programs such as incentives and concessions for the renewable energy
sector e.g. VAT exemptions, custom duty waivers, efficient port clearing procedures etc.
How has covid impacted the Solar industry in the region and how has the region tackled this crisis?
The COVID situation affected different areas of the sector. The restrictions in travels and movements affected the importation of solar components into the country. SAS companies had a hard time in reaching their customers due to movement restrictions which severely affected the distribution of these components within the country. This also led to the increase in the price of solar components as trade borders were closed and travels banned.
The pandemic also affected the distribution of knowledge, as most solar training and energy institutions who train individuals in the installation of solar components could not carry out these activities.
However, there are also positive impacts to the industry. The lockdown increased the demand for solar products because people spent more time at home, increasing the demand for steady power supply for work and other activities. In line with the increased demand for energy during the pandemic, REAN was able to influence the Lagos State Government to classify the activities of renewable energy project developers as essential duties with concessions granted for them to operate. New business models have also been enhanced and scaled around solar for health facilities, agriculture, productive uses etc.
The Federal Govt included off-grid energy companies in the country’s post-covid economic recovery plan through the 5 million new solar connection (Solar Power Naija). The healthcare system also received more attention from the government as the need for steady power supply was highlighted, which led to the deployment of solar systems in the health care centers.
What is the current scenario of the solar market in Nigeria and in West Africa as a whole?
The solar market in Nigeria is driven by mostly foreign investments, attracting over USD 227 million from a range of investors. Although there is an increase in local fundings by commercial banks offering end-user solar loans for households and commercial users. The challenge of the grid especially in Nigeria has shown the huge market opportunities that exists in the sector where the grid only provides 5,000MW at best for a population of over 208 million. The government of Nigeria has realised the huge potentials of solar by supporting the role out of mini grids, solar homes systems, solar for health, education and markets activities under the Rural Electrification Agency of Nigeria. We have seen many universities, hospitals, primary health centres etc going solar.
However, there are still factors militating against the growth of the solar market which include limited access to funds, lack of accurate data, poorly skilled personnel, high custom charges and VAT, etc.
The public and private sectors are working hard to address these issues. The government is introducing policies and implementing solar initiatives such as the Solar Power Naija, while the non-profit organizations such as REAN are creating awareness, engaging with the public and private sector to guide advocacy, influence policies, and encourage investment in the sector.
What are the current government policies with regards to the solar sector? In your view what more can be done to boost the sector?
The government is actively promoting solar electrification through policies, schemes, and the introduction of interventions such as loans to small businesses which are accessible to solar companies.
In December 2020, Solar Power Naija Programme was launched with the aim of providing energy access to five million households and the creation of 250,000 new jobs in the sector.
The government is partnering with several development organizations such as All On, USADF, USAID, ACE TAF, and HBS to provide financial and technical assistance with regard to energy policies, regulatory analysis and grants to companies that provide solar services.
In my view, the government should create a more enabling environment for businesses to thrive by reducing the cost of doing business in the country. This can be achieved by the reduction of import duties and increasing access to finance to small and medium scale enterprises.
What potential do you see in the solar sector in the coming years?
Nigeria is blessed with sunlight which means solar will always be a good alternative to fossil fuels. I see solar as the future of energy in Nigeria. Nigeria has the biggest market for solar in SSA with the huge solar resources available. The opportunity has also opened doors for investors, project developers and financiers to enter the market and play across the value chain such as solar panels, battery, inverters manufacturing etc. The finance deficit with potentially high returns is also an incentive to enter the market.
But to reach its potential, the government needs to introduce more solar interventions and reinforce the existing ones. There is a need to create an enabling environment for investors and local businesses, which can be achieved through collaborations between policymakers and the developers. With proper public education and awareness, there will be significant growth in the solar sector in Nigeria.