As part of his re-election campaign this year, Nigeria’s president Muhammadu Buhari said reliable power supply was critical to help small businesses in Africa’s most populous country.
Many small businesses such as barber shops and market shops still lack access to reliable supplies of electricity, even in areas covered by the nation’s electric grid.
That is a problem that manufacturers of solar panels and batteries are hoping to solve, by providing standalone units that can replace diesel generators and provide small businesses with secure power to make up for times when the grid stops working.
Following an initial solar and battery boom that was mostly concerned with providing power to remote rural villages, city dwellers and businesses have become the focus of a second wave of solar power in Africa.
The number of people living in cities in Africa is set to grow from around 500m today to over 1.4bn in the next few decades. By 2025 there will be 100 African cities with more than 1m people, according to McKinsey.
Nigeria’s electricity grid cannot keep up with the rapidly expanding urban population, says Alistair Gordon, chief executive of Lumos, which supplies 80 watt solar panel and battery sets in the country.
“As you go further from the centre of cities very often, it’s getting worse and worse,” according to Mr Gordon. “That edge of the city is where a lot of people have a grid that’s not doing much for them.”
He estimates that while 60 per cent of Nigeria’s population has access to the electricity grid, only 33 per cent have reliable electricity connections. The use of small-scale solar panels and batteries can help small businesses from hairdressers to market stalls power lights, fans, small televisions and charge mobile phones, according to Lumos.
The rapid reduction in the cost of solar panels and improvements in lithium-ion batteries has made small solar power systems more affordable.
Growing use of mobile payments has also enabled easy leasing and ownership arrangements.
The Lumos units are cost-competitive with kerosene and more efficient than diesel-powered generators, according to Mr Gordon. Generators are inefficient as they have to be run no matter how much power is needed, wasting fuel and capacity. They also create polluting fumes.
“You really are changing lives,” Mr Gordon says.
Amsterdam-based Zola Electric, which sells small solar and battery kits in five countries across Africa, is also starting to focus on providing power to small businesses in African cities.
This month Zola will launch its Infinity standalone electric power unit in Nigeria.
This can power appliances from fridges to water pumps and also be connected to the local grid or a back-up generator.
The unit uses a battery and computer to maximise usage of solar energy when it is sunny, but also ensure reliable power in the event of cloudy weather or a failure of the electricity grid.
“It will pick the most reliable cheapest form of energy at any given time,” Zola chief executive Bill Lenihan says. It also protects appliances against power surges, he adds. Customers can add additional batteries to meet larger loads or increase the runtime of the system.
The units also connect to the mobile phone network meaning they can also be operated and repaired remotely by the company.
“The urban on-grid segment is a massive market,” says Mr Lenihan. “Not just in terms of energy consumption but in terms of the number of businesses that suffer from unreliable and unaffordable energy.”
But while solar and battery systems can provide electricity to small businesses and urban households, industry in African cities will require a much larger amount of energy, at a competitive price.
Todd Moss, who runs a non-profit called The Energy for Growth Hub, says countries need to invest now in larger-scale energy supplies to ensure industry can develop and create jobs.
While Nigeria has 12 gigawatts of installed generating capacity only around 4GW is functional, compared to 1,000GW in the US, he says.
“Solar plus batteries will be useful in some places but it is not going to be the solution everywhere,” says Mr Moss, who previously worked in the US government focusing on Africa under secretary of state Condoleezza Rice.
“For economic development and job creation we need an industry-facing energy system. The household only approach does not get you development.”
“Solar home systems are going to be part of the rural household mix it’s probably not going to be part of the industrial or urban mix,” he said. “And Africa is becoming urban.”