Nigeria’s electricity prices keep increasing and many homes are looking for other ways to power themselves other than by using the expensive generator or electricity tariffs. As power outages increase in severity and frequency and the price of gas rises, more people are turning to home solar power as a solution for the long run. However, there is one question that people are likely to ask: Is it worthwhile to invest in solar energy for your home?
The response will vary, depending on a number of factors, such as your energy requirements, budget, equipment quality and financing options. Knowing how solar energy works will prevent you from making expensive errors and can let you know if solar energy is a worthwhile investment for your home.
A solar system for many Nigerians can mean a reliance on the generator is reduced, monthly energy bills are reduced, and a constant supply of electricity for many years. But, not all installations are created equal. Selecting the right system size, making sure that you don’t buy a fake and figuring out the return on investment are essential parts of the process.
This guide will help you determine sizing of your solar setup, discuss about inverter and battery costs, overcome fake panels, calculate payback periods in naira and discuss financing options available using government initiatives and fintech companies.
The Importance of Understanding How Solar Works
To analyze the costs and potential savings, it is imperative to know the important factors that comprise a domestic solar power system. When it comes to choosing solar panels, many new homeowners are only interested in the panels since they are the most prominent aspect of the solar panel installation. But, several factors have to play their part in a solar system to be effective. The standard home system consists of solar panels, an inverter, battery storage, mounting structures, protective devices and electrical wiring. Each of these components performs a particular function to create, transform, store and supply power in the house.
The sunlight is converted to direct current (DC) electricity using photovoltaic cells in solar panels. The electricity produced by the panels is alternating current (AC) and so most household appliances will not work with the energy. This is where the inverter comes in handy. The inverter transforms the direct (DC) electricity to alternating (AC) electricity which can be used for running the televisions, refrigerator, light systems, lap tops, routers and other household appliances. Excess electricity generation during sunny times is stored in the batteries for use during hours when the sun is not producing electricity (at night or in cloudy weather).
For those who live in areas where the power grid is extremely reliable, many of the homeowners opt to install grid-tied solar power systems that don’t include batteries as they can expect to get power from the utility during periods of low solar output. There is a different situation in Nigeria. Battery storage can be an important part of a residential installation because there are a lot of times when there’s not power and power supply is not guaranteed. Batteries can keep the lights on for homeowners after dark and in the event of a prolonged power outage. This doesn’t increase the setup expense, however it offers one of the primary benefits that lures individuals to solar energy to begin with: guaranteed electricity access, even during a power down.
Much of the value of a solar investment will depend upon the amount of money a family saves on their electricity and generator fuel costs. When people are using a lot of petrol or diesel consistently, they can make significant savings from installing solar when they make the switch. If you look at it over 10, 15 or even 20 years, it will pay for itself many times over and solar is one of the most economical home improvement options today.
The Reason Why More Nigerians are switching to Solar Energy
The upward trend towards solar energy isn’t just in response to higher electricity costs. An increasing number of homeowners are seeing that there are a few benefits to solar besides monthly savings. With the link between energy reliability and productivity, comfort, security and quality of life, a reliable electricity supply has become more and more valuable. Solar systems offer a viable solution to numerous problems linked with traditional energy sources, and offer lasting economic benefits.
The advantages of some of these are:
- Eliminates the need to rely on generators
- Increase fuel efficiency and reduce the cost of petrol/diesel
- Reduce electricity expenditure
- Better power supply when the electricity turns off
- Noiseless running as opposed to generators
- Lowered running expenses in the long term
- Energy generation without environmental damage or pollution
- Greater market value of the property and improved marketability
Solar panels can produce electricity directly from the sun, without the need to continually buy fuel or deal with ongoing maintenance costs, like generators. After installation, the sun will be the main source of energy for your home and will continue to protect you from future rising fuel costs. This is one of the reasons the many homeowners consider solar to be a long-term investment instead of just an alternative power source.
Additionally, solar energy helps in ensuring a more comfortable life. No more of generators being noisy, running out of fuel or having to make frequent trips to the petrol pump. Families can rely more on their essential devices, internet connection, food storage in refrigerators or on remote working/study activities. The system is not only a money-saving proposition over the long term, but these “lifestyle changes” are often just as important.
Correct Sizing of a Solar System
The size of solar systems dictates numerous aspects of the solar sales process and is one of the most critical choices you’ll make when purchasing a solar system. Unfortunately, many homeowners overlook this step and buy equipment based on the word of mouth, discussions on social media or sales ads. This can cause undersized systems not to satisfy household requirements or oversized systems and cause unnecessary high costs. The right size guarantees that you get a performance and value out of your investment.
The initial step in sizing is to have a comprehensive review of your home’s average daily electricity usage. It is not the best idea to estimate; a full list of all appliances you will be using solar power for should be made. This includes the obvious like televisions and refrigerators, and the smaller devices like routers, phone chargers, lighting systems and fans etc. A single appliance could be an energy consumer and ignoring a few smaller ones can lead to wrong calculations and impact the system.
Step 1: Make an Appliance Inventory
Common household appliances can be:
- LED lighting
- Televisions
- Refrigerators
- Standing fans or ceiling fans
- Laptops and computers
- Internet routers
- Water pumps
- Freezers
- Air conditioners
For example:
Appliance Power Rating
LED Bulbs (10 units) 100W
Television. 120W
Refrigerator 200W
Fans 150W
Laptop 65W
Router 15W
Actual ratings may differ based on the devices.
Step 2: Calculate the Daily Energy Consumption
Once you’ve found out which appliances you have, you can estimate the hours each of these appliances is in use during an average day. This information is used to determine the energy used on a daily basis, in watts or in kilowatts. The more precise your estimates are, the more precise your sizing calculations of solar will be.
For example:
- Lights: 6 hours
- Television: 5 hours
- Refrigerator: 24 hours cycling
- Fans: 8 hours
- Router: 24 hours
To get daily energy use, multiply the power consumption with the operating hours.
Step 3: Calculate the Total Daily Energy Demand
With the power rating of each appliance and the number of hours the appliance is used, multiply the wattage by the number of hours the appliance is used each day. The sum of these figures will give you the total amount of electricity that you need in a day. This number, plus a sufficient margin for error, is used to determine the panel capacity, inverter size and battery storage.
Assume that your family uses about 5 kWh (5000 watt hours) per day.
To support this demand, you might need this:
2-3 kW panels of solar energy
5 kWh battery storage
3–5 kVA inverter
The actual size will be dependent on the level of sun, future expansion requirements and the efficiency of the appliances.
Step 4: Make Plans for Future Expansion
A lot of people don’t anticipate future energy needs. If a house has just a television, a few lighting and fan units, the household might install a freezer, a water pump, a home office or even air conditioning units later. The system’s design can be planned to allow for moderate expansion which can delay equipment replacements and expensive system upgrades. While additional capacity adds marginally to the up-front expenses, it can provide greater benefits in terms of value and flexibility down the road.
Later in the homeowner’s experience, extra freezers, air conditioners, water pumps or other electronics are installed. Additionally, selecting equipment that has a little extra capacity will save on expensive equipment upgrades.
Understanding Solar Panel Costs
The solar panels are a key component of a solar installation and one of the most visible, but do they constitute the costliest component?
The prices of panels are dependent on the following:
- Brand reputation
- Efficiency rating
- Warranty coverage
- Manufacturing quality
- Power output
Generally, higher quality panels will provide:
- Better efficiency
- Longer lifespan
- Improved durability
- Stronger warranty support
Good quality solar panels are now capable of producing solar energy for 25 years or longer. Lower cost alternatives might be less expensive initially, but can produce less energy and can deteriorate over time.
Don’t just look at the cost of the panels, consider their lifetime value instead.
Comparing Inverter Costs with Battery Costs
Commonly, new solar energy users think that solar panels are the highest cost. Batteries, in fact, can constitute a considerable amount of the system costs in Nigeria.
- Inverter Costs
The entire system is the brain of the inverter.
Its responsibilities include:
- Using a DC to AC converter.
- Managing battery charging
- Monitoring system performance
- Protecting equipment
Common sizes of inverter for use in homes are:
- 3 kVA
- 5 kVA
- 10 kVA
The bigger the capacity of the inverter, the expensive it will be.
- Battery Costs
The cost of battery storage is often the greatest part of the total cost and is what dictates the amount of time your home will run without sun.
Examples of popular battery technologies are:
Lead-Acid Batteries
Advantages:
- Lower upfront cost
- Widely available
Disadvantages:
- Shorter lifespan
- More maintenance
- Lower efficiency
Lithium Batteries
Advantages:
- Longer lifespan
- Faster charging
- Higher efficiency
- Lower maintenance
Disadvantages:
- Higher purchase price
Although lithium batteries are more expensive upfront, they offer a greater long-term value as they last much longer and are more maintenance-free than other types of batteries.
The Ways of Preventing Fake Solar Panels
Solar products continue to be a big issue in many countries because of counterfeit products. Unfortunately, inexperienced buyers are often the victims of sellers who make too-good-to-be-true offers and prices that are too good to be true.
Some of the Red Flags That Can Help You Identify Fake Panels
Watch for:
- Extremely low prices
- Missing serial numbers
- No manufacturer warranty
- Poor packaging quality
- Misspelled brand names
- Lack of technical specifications were given
Verify Certifications
A good manufacturer will have documentation to demonstrate compliance with recognised industry standards.
Always request:
- Product datasheets
- Warranty information
- Certification documents
Purchase From Authorized Dealers
Authorized distributors will probably provide:
- Genuine products
- Warranty support
- Technical assistance
- Installation guidance
Purchasing from a reliable supplier minimises the chances of purchasing counterfeit equipment.
Compare Weight and Build Quality of Each Model
The good quality solar panels are solid and well-built. Loose frames, and workmanship and finishes that are not even may be signs of counterfeit.
The Solar Payback Time calculation in Naira
A primary concern of homeowners is how much it will take their investment to pay for itself.
Basic Formula
The payback period is calculated as Total System Cost / Annual Savings.
Example Calculation
Assume:
The total cost of a solar installation is ₦4,500,000.
The cost of the fuel saved for these generators: ₦1,200,000 per annum.
This will save you electricity bills worth of ₦300,000 per annum.
Total annual savings:
₦1,500,000
Payback period:
₦4,500,000 ÷ ₦1,500,000 = 3 years
After about 3 years, the system has been able to pay for itself. If you have any savings that are made beyond those , it is money that you have gained.
dates
Factors Affecting Payback
There are a number of factors that can impact results:
- Fuel price changes
- Electricity tariff increases
- System efficiency
- Maintenance expenses
- Battery replacement schedules
- Weather conditions
When people have to pay more for fuel and electricity they will have a shorter payback period for solar energy.
Government Support and Renewable Energy Programs
The support for Renewable Energy (RE) is growing in the countries all over the globe. Nigeria has also launched programmes to increase access to renewable energy, particularly solar energy, and decrease reliance on traditional energy sources.
Programs may include:
- Renewable energy grants
- Solar electrification projects
- Rural energy initiatives
- Public-private partnerships
- Energy access programs
Service will be available at different locations and in different programs, depending on funding. The homeowners interested should keep an eye out for the official announcement of energy agencies and government organizations dealing with renewable energy development.
Although direct subsidies for households might not always be available, more and more investments in solar infrastructure are available throughout the country to raise awareness and uptake of solar energy.
Fintech Payment Plans Making Solar Power More Affordable
The high initial investment was one of the factors that hindered the take up of solar energy in the past. The gap is being filled these days by fintech players and solar financing providers.
1. Pay-As-You-Go Models
Under this arrangement:
- Customers pay for service regularly over a period of time in small amounts.
- Equipment is set-up right away
- Transfers of ownership, on completion of payment
This type is well-known in the developing world.
2. Installment Financing
Some providers will give the client the option of paying for costs over:
- 6 months
- 12 months
- 24 months
- Longer repayment periods
Homeowners do not have to pay millions of naira in one lump sum, but can pay off the house by the payment of small amounts regularly.
3. Lease-to-Own Programs
Such schemes are a hybrid of renting and ownership. Customers will use the equipment as long as they make the payments scheduled until they own the equipment outright.
Advantages of Financing
Financing options can:
- Reduce entry barriers
- Preserve savings
- Enable faster adoption
- Lower cost of fuel for generator
When considering financing agreements, be sure to read the interest rates, payment plans, maintenance, and warranty coverage.
Is Home Solar Worth It?
Yes, is the answer for many Nigerian homes.
If you have a lot of electricity bills to pay for your generator and are faced with frequent power outages, solar energy can save you a lot of money and hassle. The trick is to make a strategic investment decision.
A system that is sized and configured properly can be an effective way to supply reliable electric power, reduce long-term energy costs and buffer from future price hikes from fuel and utilities. But, it is important to invest in the right equipment, prevent from getting counterfeit goods and to correctly estimate the amount of energy you require.
Think about the big picture when it comes to costs, not just initial. A good system can run for many years, and provide cost savings long after the initial payback.
Conclusion
It is not just big companies that are investing in solar power for their buildings, or rich homeowners installing it on their rooftops. As the quality of the equipment has improved, the financing options have been growing and conventional energy costs have risen, it has become a viable option for many Nigerian households.
If you are planning to invest, estimate your daily energy use, ensure you get your energy from a trusted supplier, look into the inverter and battery options in detail, and work out the naira value of the payback period. Here are some ways to make sure you don’t overlook the pitfalls and get the most out of your investment.
A good solar system can be one of the best long-term investments you can make as a homeowner if you want to become energy independent, lower your energy bills and have a more reliable electricity supply.
