Following the closure of their businesses by some independent petroleum marketers who claim they are no longer generating a sustainable profit by selling gasoline at the government-mandated price of N165 per litre, fuel lines recently reappeared in numerous filling stations around the nation.

It couldn’t have come at a worse moment considering that households and companies in Nigeria have been struggling with the soaring cost of diesel since the year’s beginning.

Diesel was sold for about N350 per litre in January. Today, some regions of the nation sell it for as much as N850 a litre.

The economy has been significantly impacted by these growing energy prices. Due to the national grid’s continued unreliability, many businesses and people who rely on diesel and gasoline generators have seen an increase in running and living costs. Numerous companies have resorted to passing on the cost of these exorbitant energy prices to their customers in an effort to mitigate their effects, which has resulted in an increase in the prices of their services and goods in the market and further eroded consumers’ income levels and purchasing power.

The Democratic Republic of the Congo, Ethiopia, Tanzania, and Uganda are home to over half of all Africans without access to power, according to a research by the International Energy Association (IEA), a Paris-based organisation.

An estimated 92 million Nigerians lack access to electricity from the national grid, according to the Energy Progress Report 2022, which was released by the IEA in collaboration with the United Nations Statistics Division, the International Renewable Energy Agency (IRENA), the World Bank, and the World Health Organization (WHO).

But it’s not all sunshine and roses for those who are fortunate enough to have access to the national grid either, especially when you take into account the fact that the national grid has already failed at least five times this year, throwing the entire nation into almost complete darkness.

Despite having a lot of crude oil reserves, it is obvious that as a nation we have not been able to get energy generation and supply properly. Therefore, it seems sense to start wondering if renewable energy, particularly off-grid renewable energy, would be the solution to our so far seemingly unsolvable energy crisis.

Nigeria has a wealth of potential for renewable energy, just like crude oil. By definition, renewable energy is energy obtained from resources that can naturally replace themselves over a human period.

There are five main types of renewable energy: geothermal, wind, biomass, solar, and hydro.

Except, perhaps, for a few foggy hours per day during the rainy season, the majority of the country enjoys abundant sunlight all year round. Large rivers run through the nation, and its terrain is punctuated by windswept hills and coasts. There is also a lot of vegetation that can be used to make biofuel. Additionally, a great deal of effort has been made in locating and researching possible geothermal locations across the nation.

Solar energy is the most commonly accessible source of renewable energy in the Nigerian market due to the significant progress in local competence in solar photovoltaic technology. Nigeria has an estimated 427,000 MW of solar energy producing capacity. This is a big and potentially game-changing development in a nation where there is an energy supply imbalance of at least 180,000 MW, according to the Association of Nigerian Electricity Distributors.

For businesses and households, switching to solar energy systems can be an efficient cost-saving measure. Although buying a solar energy system may initially cost more than buying a diesel or fuel-powered generator, many solar energy firms offer flexible payment options to help their customers manage the initial investment. Additionally, because sunshine is a free gift from nature, solar energy systems are longer lasting and simpler to maintain over the long term.

The full development of the renewable energy industry in Nigeria has been hampered by problems related to the high cost of solar energy systems (which has made them uncompetitive compared to fossil fuel generators), the protracted wait for investment returns, and the lack of adequate information about renewable energy products. The nation’s spread of renewable energy can be facilitated by the government and other stakeholders.

For instance, by creating cutting-edge supply-side and demand-side financial solutions for operators and consumers in the renewable energy industry, commercial banks and other fund providers can close the funding gap.

To stimulate local manufacturing on the supply side, manufacturers and service providers should have access to affordable financing. On the demand side, businesses and people that want to buy renewable energy solutions should have access to low-cost financing.

Other tactics that can be used to aid solar energy enterprises in achieving economies of scale, lowering the cost of their products, and improving their competitiveness include collaborations, patronage, demand aggregation, advocacy, and capacity building. While solar energy appears to be the main focus in Nigeria, we must not ignore other sources of renewable energy, such as wind farms, off-grid hydroelectric power, and biofuels.

Aside from its favourable effects on the environment, corporate profits, and household disposable income, switching to renewable energy sources can also have a positive macroeconomic monetary impact.

According to the Central Bank of Nigeria, between 30 and 40 percent of the nation’s limited foreign currency is annually spent on importing petroleum goods like gasoline (petrol) and diesel. Adopting renewable energy strategies can help stabilise the country’s exchange rate by reducing the demand for and imports of these petroleum products.