The Centre for the Promotion of Private Enterprise (CPPE) has kicked against the plan by the Federal Government to ban the importation of solar panels into the country.
The economic think-tank in a statement sent to Ripples Nigeria on Monday said such a move would worsen the country’s energy crisis and cripple the economy.
The Minister of Science and Technology, Uche Nnaji, had recently announced plan by the Federal Government to ban the importation of solar panels to promote domestic production of the items.
But in the statement, the CPPE Chief Executive Officer, Muda Yusuf, stressed that Nigeria is not ripe for a ban on the importation of solar panels given the acute energy deficit in the economy and the limitations for the production of solar panels in the country.
He said: “The decision to ban the importation of solar panels would be very disruptive and counter-productive. It is important to ensure adequate local capacity to fill the supply-demand gaps.”
He urged the federal government to instead support investors in solar panel production with robust fiscal and monetary incentives – tax incentives, tariff concessions on intermediate product,s and concessionary long-term financing at a single-digit interest rate.
The CPPE boss also appealed to the government to cut the import duty on batteries, inverters, and wind turbines to 5%., saying this would significantly improve energy access, energy security,y and productivity in the economy.
Yusug added: “It would also reduce reliance on the national grid for power supply. The current cost of batteries and inverters is very prohibitive. Some of the subsidies given in other climes to promote investment in renewable energy solutions include investment tax credits, production tax credits, financial grants, power purchase agreements, concessionary financing, and support from multilateral institutions.
“Currently, Nigeria has one of the worst energy access with a per capita electricity consumption of about 160 kWh, far below the sub-Saharan average of 350 kWh. The adoption of solar energy solutions is one of the most impactful government initiatives to tackle this problem, and it has gained remarkable traction. A ban on the importation of solar panels in the face of glaringly inadequate domestic production capacity would worsen the country’s energy crisis.
“It is a complete negation of the government policy to deepen and promote the adoption of renewable energy solutions by households, small businesses, rural communities, government institutions, and other corporate organizations. This adoption of solar solutions has gained impressive momentum in the last two years, especially in the light of the soaring energy cost in the economy.
“The transition process should be very painstaking, diligent, and gradual. A recourse to a hasty decision of banning the importation of solar panels would be very disruptive and counter-productive. It is important to ensure adequate local capacity to fill the supply-demand gaps.
“Current local value addition is very low, and this would create competitiveness and cost issues.
“The minister’s announcement of a planned importation ban is already generating concerns and anxiety among the renewable energy investing community, the business community, households, as well as multilateral organizations.
“It has significantly elevated the policy and political risk of investing in renewable energy solutions in Nigeria.”
© Ripples Nigeria
