By Martins Eke
Abuja-More than half of Nigerians do not have access to the national electricity grid. It has consequently been stated that off-grid solar energy provides a good option to reach these millions of unserved Nigerians. While advocacy for off-grid solar energy projects should be sustained, there is need to analyze the thousands of solar powered facilities the government has already put in place.
A study was recently conducted across the six geopolitical zones of Nigeria. The aim of the study is to see if the solar boreholes and solar streetlight projects of the federal government is providing value for money. Numerous projects across the six geopolitical zones were taken as pilots.
The value for money in the context of the study is achieved when the assessed projects meet certain criteria: The project meets the standard quality criteria required of such projects; The project has measurable socio-economic benefits to the community; The project is cost-effective as compared to its conventional alternative; The project has environmental benefits. In ascertaining the value for money of the projects, some key factors were also considered.
First, the average market price(s) of the solar street light and water borehole solutions from reputable solar firms in the country was compared with the price of the solar solutions as appropriated in the federal budget. Next, the estimated cost during the lifespan of the solar projects using an average of 25 years (the average lifespan of good quality solar panels) was used to ascertain the total value for money of these projects in comparison with their conventional alternatives while considering the properties of both solutions.
Lastly, the values of the assessed projects were compared based on their existing conditions at the time of assessment against the expected value to ascertain their actual value for money.
The first issue on efficiency of the investments which is about ensuring that maximum useful output is achieved at the minimum level of input cost deals also to a good extent with economy for these solar solutions. It is about the high rate of inflated cost which could be attributed to a lot of possible factors including: flawed procurement process during contract bidding and proposal evaluation process; presence of middlemen who have to be “settled” during the contract awarding process from personnel or ministry staff, to the “selected” contract awardee before getting to the actual firm that would execute the contract; poor knowledge of solar solutions by those bidding for the project; the false impression that solar solutions are meant to be expensive; inflation of costs for government contracts due to lack of inspection and proper scrutiny of projects.
To ascertain the efficiency of a standard street lighting solution throughout its lifespan, various factors are considered including the technical components of the street lighting solution and the estimated future costs of maintenance in comparison with traditional alternatives. The conventional and traditional alternative is deemed to be the use of generators considering that available grid energy fails to meet 40 per cent of the energy needs of Nigerians connected to it.
The study adopted the full life cycle costing approach to determine the actual financial outlays needed to run the two sets of projects over their life time. The results showed that majority of the projects generally had no reasonable value for money especially in terms of their socio-economic, cost-effective and environmental benefits. Most contractors tried to maximize profits in executing the projects and as such, used substandard components and equipment. This suggests that most government contracts are not monitored to check for quality assurance,
functionality and standards, etc.
Alternatively, the monitoring and evaluation team either do not have the capacity to properly assess job quality or are compromised to turn a blind eye to their duties. The inflated costs of these solutions coupled with the fact that most of them are not functional gives the false impression that solar solutions are too expensive and have no value for the amount of money invested.
However, solar solutions are designed to be more cost-effective than their conventional alternatives and if installed, secured and maintained properly as should be done would show significant value for money and savings over conventional fossil energy options.
In the end, only 7 per cent of the assessed solar energy projects were fully functional. 53 per cent of the projects were partly working while 40 per cent were completely nonfunctional.
Photo credit: Conserve Energy Future
Martins Eke is the Programme Officer at the Centre for Social Justice, Abuja.