Does inflation affect solar power in Nigeria?
After almost double increment of inflation index in Nigeria, in 2017. The amount of money used to buy just small products and services skyrocketed. We prayed and hoped not to see another one. Well, it has come as a surprise, in January 2021, inflation rose to 16.5% from 15.8% in December of the previous year, marking the strongest annual rise in prices since April 2017. The cost of goods and services in the country continues to rise sporadically as Nigerians struggle to afford basic needs.
Inflation refers to the general rise in the level of prices of goods and services in an economy over a period of time. This implies the reduction of purchasing power of the country’s unit currency and hence, loss of real value as a medium of exchange during trade internally and externally. It means a lot of money is chasing small goods. Making products and services overvalued.
The solar industry in Nigeria is no exception to the economic issues faced by the country. With the increase in the cost of importation, many solar companies have met increased expenses majorly in equipment but also in transportation which may cause operational challenges.
However, the inflation rises also bring with them a huge opportunity that the solar industry can harness if firms are able to apply some ingenuity in the production and delivery of their service. Here is how the current environment can benefit solar companies in Nigeria and the population as a whole.
Demand for solar energy
The need for electric power in Nigeria has been insatiable, due to the epileptic nature of the power supply by the PHCN. The demands for a stable power supply has never been high even as inflation increase. This has resulted in the heavy demands for solar products, Beebeejump solar S1 has experienced this massive demand. Demand compensation for the inflation price reduces the effect of inflation on the solar power industry.
Increase in petrol price
The only alternative to getting stable electricity in Nigeria before is Generator. Generator only functions with petrol (Gasoline) thereby increase in petrol price has made using generator unbearable for households and businesses. Only solar power still fills in the gap in this period of inflation. Solar power gives the value of exactly what is been paid for.
Beebeejump solar products have always been in demand since the public totally accepts our product because of its quality. Hence, inflation will not affect the solar power industry.