Apr 06, 2026 (Leadership/All Africa Global Media via COMTEX) --
Installation costs rise 208% on FX woes, high demand | Aso Villa spends N17bn on solar, exits national grid
Grid failures across Nigeria have made solar power an essential lifeline for households and businesses, yet soaring installation costs are pushing it out of reach for many in lower-income brackets.
Findings by LEADERSHIP Sunday showed that the average cost of solar power systems and inverters has surged sharply, reaching up to 208 per cent across Nigeria, as worsening electricity supply continues to push households and businesses towards alternative energy sources. Findings also show that the prices of solar panels, batteries, and inverters have risen significantly in recent months, driven by sustained demand and foreign exchange pressures.
Market surveys indicate that a standard solar setup that previously cost between N800,000 and N1.3 million now costs as much as N1.8 million to N4 million, depending on capacity and components.
This development comes amid a massive increase in solar imports, with Nigeria importing an estimated 2.9 million solar panels valued at over N435 billion in 2025. According to Foreign Trade Statistics, this reflects a growing shift away from the unreliable national grid.
Nigeria's national grid faces chronic instability, with frequent collapses and low generation and distribution capacity exacerbating power shortages for over 200 million people. Recent events in 2026 highlight ongoing challenges, including gas shortages and infrastructure failures.
Nigeria has been generating electricity for the past 130 years - since 1896. Yet the country has never produced enough power to meet its growing population and industrialisation needs.
As of March 2026, the national grid dropped to 3,940 megawatts. For 220 million people, that is grossly inadequate.
South Africa generates over 48,000MW for 60 million people. Egypt has about 59,000MW installed capacity for its 110 million population.
Nigeria has only about 13,000MW of installed capacity, but can transmit only about 4,000MW to 5,000MW through the grid on a good day due to dilapidated infrastructure. The rest goes to waste because the energy generated cannot be stored or warehoused. The grid collapsed 12 times in 2024 alone, while 128 transmission towers were vandalised in the same year. The government spent N8.8 billion just repairing them.
Between 2010 and 2022, the Nigerian Electricity Regulatory Commission (NERC) recorded at least 222 partial and total grid collapses. That's roughly one every three weeks in 12 years.
Every time the grid collapses, restarting just three power plants (Azura, Delta, and Shiroro) costs Nigeria about $25 million. That's N42.5 billion per collapse for just three plants.
Mounting debt is also a major challenge in the industry. The power sector owed generation companies N6.8 trillion as of February 2026. The indebtedness is growing by N200 billion every single month. That means it hit N7 trillion by the end of March 2026.
Of that N6.8 trillion, about N3.3 trillion is owed to gas suppliers. So, what did the gas suppliers do? They cut the supply. Right now, thermal plants need about 1,630 million standard cubic feet of gas per day. They're getting only 692 million. That is less than 43 per cent.
That is why there are more widespread outages across the country these days. The government approved N4 trillion in bonds to fix the problem. So far, it has issued only N590 billion.
$14bn Spent on Power Generators Yearly
Meanwhile, Nigerians spend about $14 billion every year buying and fuelling generators. There are about 22 million generators across the country with a combined capacity of about 42,000 megawatts. That's eight times what the national grid delivers.
That means Nigeria has more generator capacity than grid capacity. The high cost of using generators has grave implications for businesses.
In 2023, 767 manufacturing companies shut down. 335 more became distressed. That translated to 18,000 jobs lost.
In the first half of 2025 alone, manufacturers spent N676.6 billion on alternative power and still could not meet their needs, resulting in another 18,935 job losses.
The World Bank estimates that power outages cost Nigeria $29 billion annually. That's about 10 per cent of the country's gross domestic product (GDP).
A Governance Problem
Nigeria's electricity supply situation has all the hallmarks of poor governance.
Egypt added 14,000 megawatts of gas capacity in six years using the same Siemens intervention Nigeria has been talking about for over a decade. Ghana fixed its power crisis between 2012 and 2016 and now exports surplus electricity. South Africa has just gone 300 consecutive days without load shedding after committing to a real recovery plan.
Yet Nigeria has been "fixing" the power problem since 1999, when civilian rulers retrieved political power from the military.
Since then, every president has had an emergency power plan. We've taken over $4 billion in World Bank loans for the power sector. Yet the grid can barely hold 5,000MW. Any more and it literally collapses.
Nigeria cannot run on generators and still be taken seriously as an economy. No country industrialised on backup power.
Solar to the Rescue, but Prices Soar
The electricity crisis has worsened in recent weeks following repeated national grid collapses and persistent generation shortfalls.
With power generation still hovering below 5,000 megawatts for a population exceeding 200 million, many Nigerians are left with little choice but to seek alternatives.
Now, more and more businesses and households are giving up on grid power and looking to solar for succour. However, the cost is off-putting to many.
Industry players attribute the rising cost of solar power to a combination of factors, including increased demand, naira depreciation, high import duties, and logistics challenges.
A Lagos-based solar dealer identified as Elias told LEADERSHIP Sunday that "the demand has exploded because people are tired of darkness, but supply costs have also gone up. That's why prices keep rising."
As a result, solar energy, once considered a luxury, has become a necessity for many homes and small businesses. However, the sharp increase in prices is now putting these solutions beyond the reach of low-income households, as small business owners say the situation is squeezing their margins, despite the long-term savings solar offers compared to petrol- and diesel-powered generators.
A shop owner in Lagos lamented, "I want to switch to solar, but the price is too high now. Every time I check, it has increased again."
Data also show that solar panels remained among Nigeria's top imported commodities in 2025, highlighting the scale of the country's energy transition. Reliance on imports persists despite government efforts to boost local manufacturing.
Experts warn that unless there is a significant improvement in grid reliability and local production of renewable energy components, prices will continue to rise as demand grows.
They note that the trend reflects not just an energy transition but a deeper loss of confidence in the national power supply system.
The situation has been further compounded by persistent grid collapses in recent times, which have plunged large parts of the country into darkness and disrupted economic activities, thereby intensifying demand for alternative power solutions.
A Lagos resident, Damilola Oladipo, who recently installed a solar power facility, said the investment had brought him stability despite the high cost.
"Solar power is a very smart way to go because it drastically reduces our dependency on the national grid and eliminates fuel costs for the generator. It cost us roughly N5.7 million," he said.
While providing a breakdown of the cost when he undertook the project last year, he said, "A solar panel is sold for N115,000, and we got 12 panels, which is N1,380,000. Then a 16kWh battery is N2.7 million, and with an 8kWh inverter, it is N1.1 million."
He stated that the facility had improved his household's quality of life. "There's this joy that comes when you see light around you. There are no worries about food getting spoiled due to a power outage, less spending on the prepaid meter, on the generator and maintenance, and less noise pollution."
He, however, admitted that weather conditions can occasionally affect performance. "The only issue is when there isn't enough sun due to cloudy weather, but that happens once in a while compared to years of stable electricity."
Another user, Iya Pelumi, said solar had transformed her home's living conditions. "You cannot enjoy anything in the house with the national grid. You can't even pump water before they take light. But since we installed solar, my children don't even know what it means to be without light," she said.
A marketer with God's Solar Tech, Mr Kunle, said demand remains strong despite price fluctuations. "There's definitely demand for solar installations now, and that keeps the market active. The panel itself has actually become a bit cheaper. For example, a 580W panel that was N125,000 is now about N115,000," he said.
He explained that the exchange rate remains a major determinant of pricing. "It's not just demand. The dollar exchange rate still has a big effect on the cost of imported panels and equipment."
He further explained the pricing structure, stating that the requested capacity determines the price. "A 3KVA system goes for about N1.5 million, while a 5KVA is around N2.5 million," he said.
However, in a chat with the chief executive officer (CEO) of Temabid Energy Solution, an alternative power source installation firm, Engr. Dare Adeyemi disputed that panel prices in the market were getting cheaper.
According to him, there is a mass migration from tubular battery users to lithium-ion batteries due to their durability and long product warranty, with the cheapest going for N650,000, while the tubular form can cost two batteries at the cost of one lithium-ion battery.
"Panels are getting expensive daily, and technicians need to update their quotations to clients every day, because the prices keep changing. The marketers are making a lot of money off us. Even with the exchange rate, which was a major factor in their pricing, it is not as high as it was last year. Presently, there is no price control when it comes to the acquisition of alternative power components," he said.
Adeyemi further stressed that people are opting more for lithium-ion batteries right now than for tubular batteries, which has reduced the demand for tubular batteries, as they can now be bought for between N190,000 and N200,000, against last year's rates of N280,000 and N300,000.
He added, "Tubular batteries release hydrogen gas during charging and they require proper ventilation to avoid safety risks, and their lower efficiency compared to lithium-ion batteries has become a factor that old and new users are wary of, which has prompted the high adoption rate of lithium-ion batteries. As of last year, it wasn't that expensive compared to what they're selling it now. The only thing that is less now is tubular batteries," he said.
Meanwhile, the national grid has faced its most prominent distrust as the seat of power, Aso Rock Presidential Villa, Abuja, has exited the grid and adopted solar energy.
The Presidential Villa formally disconnected from the grid, opting for a solar-powered mini-grid following months of testing backed by the 2025 and 2026 budgets. Officials confirmed that by March 2026, the Villa stopped drawing power from the national grid, citing high electricity costs and unreliable supply.
The decision follows fresh instability on the grid, which collapsed twice in January 2026 alone, following multiple collapses in 2025.
Nigeria is said to be generating between 3,500MW and 5,500MW, which is far below national demand.
Financial records show that the federal government earmarked about N10 billion in 2025 and N7 billion in 2026 for the Villa solar project, bringing the total to N17 billion, with lifecycle estimates ranging from N20 billion to N25 billion.
Even as the Presidency defended the move as cost-saving and environmentally responsible, analysts say it reflects a broader shift away from the national grid.
Public affairs analyst Tunde Ajibola said, "When the government abandons the same grid that citizens depend on, it weakens the urgency to fix it. It becomes survival of the fittest in energy access."
Energy consultant Ken Onos spoke in a similar vein. "What we are seeing is the formalisation of what Nigerians have done for years by exiting the grid. The risk is that it may normalise dysfunction instead of solving it."
On his part, public affairs analyst Ake Ayodeji said, "The federal government has been consistently unfair to citizens in the management of Nigeria's power sector. For years, electricity supply has remained unreliable, expensive, and deeply frustrating, despite repeated promises of reform. Households and businesses continue to suffer daily outages, forcing many to depend on costly alternatives like generators and solar power, just to survive."
He added that the situation is more troubling due to the government's response to the crisis.
According to him, "Instead of fixing the national grid or making electricity accessible, authorities quietly transitioned to solar power in Aso Rock, ensuring stable electricity for themselves. This decision highlights a painful disconnect between leaders and the people they serve.
"While those in power enjoy uninterrupted energy, millions of Nigerians cannot afford the high upfront cost of solar systems for their homes. The result is a widening inequality in access to basic infrastructure. Until meaningful investments and transparent policies are implemented, the power sector will remain a symbol of neglect and unfairness today," he stated.
No doubt, across the country, millions of households and businesses have adopted solar systems, inverters, and generators as alternatives to unreliable electricity supply.
Analysts said the development signals a widening divide in energy access, where those who can afford alternatives opt out, while the majority remain dependent on an unstable grid.
Consequently, for many Nigerians, solar is no longer optional but a necessity, yet one that is increasingly becoming unaffordable.
COMTEX_476718286/2029/2026-04-06T23:06:49
by Kingsley Okoh
Copyright 2026 Leadership. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
