Power system collapse: LCCI urges FG to reduce tariff on solar power equipment
The Lagos Chamber of Commerce and Industry (LCCI) has asked the Federal Government to reduce tariff on solar panels and batteries, as a means of finding sustainable power model that will guarantee the citizens access to clean energy.
Muda Yusuf, Director General, LCCI, disclosed this in an exclusive chat with EnergyDay Nigeria.
Recall that in February 2018, the Nigerian Customs reclassified solar panels under a harmonized system (HS) code, thus, increasing the tariff on the equipment, whereby a 5 percent duty was charged on solar panels and another 5 percent as Value Added Tax (VAT), while 20 percent duty was charged on the batteries. Whereas, before that period, there were no tariffs on solar panels.
The LCCI DG said the nascent market for mini-grid project offers the least-cost option for delivering power to most citizens who lack energy access.Reducing the tariff according to him, will address persistent system collapse and power outages from the national grip.
He said, “The mini-grid market especially solar hybrid projects installation in Nigeria has recorded poor penetration due to a lack of unfriendly policy direction of the Government.
“It is bad for the Federal Government to be offering terrible incentives to renewable equipment in Nigeria when compared with other nations.
“It is shocking that the Nigeria Government is paying lip services to energy mix and transition. Unfortunately, despite government’s acclaimed interest in energymix, operators in the system have found it quite expensive to set up ordinary solar panel facility in Nigeria.
“At this critical period where we have been battling with system collapse, the government needs to encourage friendly environment that would grant easy access for people to benefit from other sources of energy.
“The Buhari’s administration has been talking of “energy mix” for years. There have been several policies initiatives by the government, but there has not been serious effort to following these policies through”, he said.
He continued,”in this age and time, why are the tariffs on solar panels, inverters and all these batteries so high? High tariff and other issues are inhibiting substantial progress in this solar energy industry.
“There are some villages that don’t need up to 1 Mega Watts of electricity. You see kilometre of cables go into all these villages. These things don’t make any economic sense in an economy such as Nigeria,” the LCCI boss noted.
Mr Yusuf however charged the Nigerian Government to show some level of seriousness about these initiatives, adding such would put the country on the right track to achieve the set energy objectives. Vice-President Yemi Osinbajo had earlier in the year disclosed that Nigeria was planning to have at least 30 per cent of its total electricity supply from renewable sources, mainly solar power in the next nine years.