CPPE Kicks Against FG’s Plans To Ban Importation Of Solar Panels

The Centre for the Promotion of Private Enterprise (CPPE) has strongly kicked against the plans by the Federal Government of Nigeria to ban the importation of solar panels asserting that it will potentially worsen the energy crisis in the country and further cripple the economy.

The economic think-tank in a statement sent to The Matrix Newspaper said it was concerned about the statement credited to the Minister of Science and Technology, Uche Nnaji about the plan of the Federal Government to ban the importation of solar panels as a measure to promote domestic production of the panels.

According to the Chief Executive Officer of CPPE, Muda Yusuf, he 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 yawning domestic capacity limitations for the production of solar panels.

“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 said.

The Centre recommended that the government should instead, support investors in solar panel production with robust fiscal and monetary incentives – tax incentives, tariff concession on intermediate products and concessionary long-term financing at a single-digit interest rate.

It further urged the government to cut the import duty on batteries, inverters and wind turbines to 5%., adding that this would significantly improve energy access, energy security and productivity in the economy.

” 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,” CPPE emphasised.

Yusuf continued: Currently, Nigeria has one of the worst energy accesses with a per capita electricity consumption of about 160kWh, far below the sub-Saharan average of 350KWh. 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 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.”