Royal Power & Energy Limited, a prominent player in Nigeria’s renewable energy sector, has witnessed the dynamic interplay between foreign exchange volatility and the cost of solar power. Interestingly, despite fluctuations in the naira’s value against the dollar, the cost of solar panels has consistently decreased at a faster rate than the currency devaluation. This fortunate trend has made solar power increasingly competitive in the Nigerian market, particularly between mid-2020 and the end of 2024. The naira’s appreciation in the first few months of the observed year further bolstered this cost advantage, making solar an even more attractive option. This cost reduction is further aided by government support in the form of reduced tariffs and duties on imported solar components. While batteries still incur a 20% duty, solar panels can be imported duty-free if brought in without the module, and at a reduced 5% duty with the module. This governmental support underscores a commitment to promoting renewable energy adoption in Nigeria.
The affordability of solar power compared to traditional grid electricity and diesel generators has become a compelling argument for its adoption. Over the past eight years, the cost of solar power has plummeted from $3 per kilowatt to around $0.10, representing a remarkable 97% reduction. This dramatic price drop has positioned solar as the most cost-effective power solution for businesses. Compared to the fluctuating grid tariffs of Band A, which range between N220 and N250 per kilowatt-hour, solar power offers a significantly lower cost at approximately N160 per kilowatt-hour. Furthermore, it substantially undercuts the cost of running diesel generators, which can reach N400-N450 per kilowatt-hour. This cost advantage, coupled with increasing grid instability and the rising cost of diesel, has propelled solar into the forefront as the preferred energy source for many businesses.
The cost of installing a solar power system for a three-bedroom flat varies depending on several factors, including the types of appliances used and the desired backup power duration. The presence of energy-efficient appliances like inverter air conditioners significantly impacts the system’s cost. A comprehensive system providing 24-hour power backup can cost up to N3 million or more. However, a smaller system designed for a few hours of backup might cost less than N1 million. Ultimately, the final cost is determined by the specific power requirements and consumption patterns of the household. Royal Power & Energy offers flexible solutions to address affordability concerns, including free installation coupled with a power purchase agreement. This model allows customers to pay only for the power they consume, similar to how they interact with traditional distribution companies.
Royal Power & Energy offers two primary service models: outright purchase and “power as a service.” Under the power-as-a-service model, the company installs the solar infrastructure at no upfront cost to the client. The client then enters into a contract of five, seven, or ten years, paying for the power consumed at a rate generally lower than Band A grid tariffs. This arrangement allows businesses and individuals to enjoy the benefits of solar power without the initial capital investment. Furthermore, it provides predictable energy costs and potential long-term savings. The company also offers an ownership option at the end of the contract period, where a slightly higher per kilowatt-hour rate contributes towards the eventual transfer of ownership to the client.
Addressing concerns about potential damage or theft of solar installations, Royal Power & Energy maintains comprehensive insurance coverage throughout the project lifecycle. This includes insurance during construction, transit, and post-installation operation. The company owns the installed infrastructure during the contract period and ensures its protection as part of its service offering. This insurance coverage provides clients with peace of mind, knowing that their investment is protected against unforeseen circumstances. With a large service team of around 60 engineers covering all states and the Federal Capital Territory, Royal Power & Energy prioritizes after-sales service and maintenance. They have service level agreements with many clients, providing regular maintenance and checkups for solar installations, batteries, UPS systems, and inverters. This commitment to after-sales service ensures the durability and optimal performance of the installed systems.
Royal Power & Energy primarily serves telecommunication companies, banks, critical national infrastructure providers, and a growing residential segment. The company plays a crucial role in powering telecommunication mast sites, providing power infrastructure solutions such as rectifiers, batteries, solar panels, inverters, and UPS systems. They also serve as a key power solutions provider for major banks across Nigeria. While initially focused on standalone installations, the company has expanded into grid-tied projects. Their expertise in Engineering, Procurement, and Construction (EPC) and their unique “power as a service” model set them apart from other solar providers. Their deep experience in the Nigerian market, spanning over two decades, provides them with a distinct advantage in understanding the local power landscape and tailoring solutions to specific needs. This combination of technical expertise, flexible service models, and a commitment to after-sales service positions Royal Power & Energy as a leading force in Nigeria’s burgeoning renewable energy sector.
