The impact of petrol subsidy removal on the adoption of solar power in Nigeria

Abstract

For decades, the Nigerian government has subsidised the price of petrol, making it one of the lowest in the world. Historically, the country has relied significantly on petrol subsidies to make energy more affordable to its inhabitants. This policy, however, has imposed a significant budgetary burden, fostered smuggling and corruption, and discouraged investment in renewable energy sources. Additionally, it cuts down on the resources that governments may devote to achieving other development goals as well as sustainable development goals. With a growing global emphasis on renewable energy sources and the need to reduce carbon emissions, Nigeria faces the challenge of transitioning from its traditional reliance on fossil fuels to more sustainable alternatives. To determine the impact of petrol subsidy removal on the adoption of solar power in Nigeria, we present a cost analysis comparing the acquisition and operation of a 2.5 kVA solar PV system to that of a petrol generator of the same capacity. The cost analysis shows that the solar PV system is a more cost-effective and sustainable option for power generation than petrol generators, especially in the long term. The paper emphasised the need of harnessing Nigeria's tremendous solar potential and reducing carbon emissions through solar power adoption. The study also shed light on the potential benefits and challenges of promoting solar energy as a viable alternative to traditional electricity supply in Nigeria.