Funmilayo Adetoun sells frozen food for a living. She has a shop at Ifelodun market, in Shomolu Local Government area of Lagos State. The fittings and fixtures in the shop were sparse yet functional – three deep freezers brimming with chicken, turkey, fresh fishes marinated in ice, a cutting table and chair, plastic bowls and containers, 12 -inches plasma LCD television perched at corner, besides a calendar from the Lagos State Association of Frozen food traders and dreams of owning another shop before Christmas season 2016.
It is July 2016; Funmilayo now braids hair in front of the shop she once owned, which has now been leased to a tailor. No, she didn’t diversify; Nigeria’s power crises ran her out of business.
“What kind of profit would I hope to make when I buy goods on credit and have to pay N10, 000 everyday to fuel my generator? I got tired of throwing away the fishes and sold everything,” she told BusinessDay.
“Why?” she asked in response to BusinessDay’s why, staring at the reporter like he was from a different planet. This was in April this year; at the height of Nigeria’s worst ever fuel scarcity, when also national power generation was less than a paltry 2000 megawatts.
“We have no light for over six weeks, the corporative I took loan to start the business were threatening to take everything… It was crazy!”
Like Fumilayo, several small business owners in Nigeria have been run out of business on account of Nigeria’s debilitating power situation. Frank Udemba Jacobs, national president of the Manufacturer Association of Nigeria (MAN) recently said that his members have been spending an average of N9 billion daily to generate electricity in their factories.
“From last year, nothing has changed in the sector, we all know that in terms of power generation, our members spend billions of naira and this is going up daily because we are daily increasing capacity. I think it is more than N9 billion daily,” Jacobs told Ogbonnaya Onu, minister of science and technology when he visited the minister in Abuja.
BusinessDay recently reported that the current dip in power supply is having a bruising effect on small and medium scale businesses struggling to break even as fuel cost now constitute over 30 percent of their operating expenses. The recent increase in the price of Premium Motor Spirit (PMS) and spiraling cost of AGO, private electricity generation may constitute as much as 50 percent of operating cost of small businesses.
Shomolu Local Government, under the jurisdiction of Ikeja Electricity Distribution Company, with the biggest printing cluster in Nigeria, employing over 15,000 people is worse hit as small printers operating off press machines in the area spend between N7,000 – N10,000 daily on petroleum products while large printing presses spend between N20,000 and 25,000.
Sam Odimayo, managing director of Alpa Press said he spends N21, 000 daily on diesel. “I have decided not to think about the cost again, because if I do, I will nothing.”
Solar energy to the rescue
Deploring solar solutions while desirable has been blighted by the huge capital costs involved in procuring solar power infrastructure. But recent developments in the solar power industry both on grid and off-grid solutions is getting increasingly less sophisticated, cleaner, simpler and more efficient.
Some systems are installed with facility for real-time data gathering on the system’s solar production and home energy use. There are also smaller bits home solar options measured in kilowatts and wattages that give options for those on a limited budget.
Arnergy Solar limited, a Nigerian firm founded by Femi Adeyemo and Kunle Odebunmi has created a prepaid solution that promises 24 hours supply to power basic household appliances and office equipment.
The revolutionary systems assembled in Nigeria, incorporates technology that will allow customers to buy recharge pin using a mobile electricity app or through an agent in areas without mobile network.
The app synchronizes with the company’s cloud based server infrastructure to unlock solar power when a 12 digit pin is keyed into the solar kit.
A starter pack contains a photovoltaic panel and a battery modified which has a key pad and a display unit where information about units purchased and consumption levels are displayed. The Arnergy 300 comes with a radio and MP device for rural areas where electrical appliances are considered luxury.
The device comes with a one-off rental cost of N25, 000 paid to have the equipments installed and afterwards electricity is sold in 500 and 300 wattage units for N200 and N100 respectively per day. This can power basic equipments for small businesses rather freezers, printers, laptops, fans and LED bulbs.
“We want to help small businesses threatened by irregular power supply,” states Kunle Odebunmi, charged with finance and business development, “Arnergy 500 can power small businesses like barbers, tailors, business centers, real estate agencies, private homes and even small offices. It is cheap, it is clean and we take the stress of maintaining the equipments.”
There are many other outfits like Solynta, Simba and JohnStephens that are also providing solutions in low cost renewable energy. Industry players are asking banks and other financial institutions to create easier access to consumer finance to purchase solar infrastructure.
“The challenge is the need for access to consumer financing such that with initial down payment, further repayment can be broken over a period of time while money spent on fuel is channelled towards repayment,” Sulaiman Yusuf, MD/CEO, Blue Camel Energy
Some companies are even making payment terms easier, allowing for instalment payment options.
This off-grid, small-scale energy solutions can more reliably, rapidly, and cost-effectively bring power to communities that may not otherwise get access to the traditional grid. Rather than investments directed at expanding failing national grids, experts are calling for more off-grid solutions that will utilize fuel source prevalent in areas power is generated.
In the long run, these solutions could generate more economic opportunity as creative small and medium enterprises develop and operate off grid and small scale technologies in their communities to serve the energy needs for Nigeria’s struggling small businesses.