Engineer Tomiwa Bayo-Ojo is the Managing Director and Chief Executive officer of Volsus Energy Limited, a renewable energy firm with offices in Abuja and Lagos. The young and dynamic electrical engineer, estate surveyor and valuer in this interview spoke about how his firm is working on manufacturing solar power inverters to promote access to affordable renewable energy solutions in Nigeria.
When did you start Volsus Energy and what was the motivation for it?
Volsus Energy began in 2016 but prior to that, I had been in the real estate sector. It was that sector that inspired my diversification into the energy sector. I also recognised the great opportunities in the energy sector especially in renewable energy, and so that was how I started. The company was registered in 2016 with offices in Abuja and Lagos State.
How has the COVID-19 pandemic affected your operations?
It has adversely affected our operations. Prices of goods have gone up and they are becoming scarce due to travel restrictions. For instance, when we are doing solar installations in Nigeria, there were a variety of batteries that we use, however, there has been a reduction in supply because of the import/export restrictions in some countries. Some batteries that we use have not been available so we have had to look for suitable alternatives; but the alternatives have even gone up because they are scarce. We are hoping that when the restrictions are lifted, things will improve.
The virus has also made a lot of people start hoarding their cash and not spending much. That has affected our businesses but despite that we had to provide palliatives for our staff. We are looking to gradually get back to our business as usual.
What is your assessment of the renewable energy sector development in Nigeria?
I have been into renewable energy in Nigeria, but I went for training in England a couple of years ago and the training experience broadened my horizon. Prior to the training, I knew that we needed batteries, solar panels, and inverters when installing solar energy in Nigeria but during the training session that I had in England which was also a practical one, the trainer never spoke about batteries or used it while setting up a solar power installation, and I was amazed. In England, the way they think of renewable energy is that it is something that should complement the national grid and not as a complete substitute for the grid. Their belief is that there will always be grid electricity. Renewable energy like solar power is only installed to reduce the energy cost for mostly residential consumers. The consumers across households have bi-directional meters in England and even in the United States, so that when solar panels are installed, during the day, the meter is reading backwards and feeding excess electricity back into the grid and reducing the electricity consumption. More so, they are not worried about the solar panels' initial cost because there is financing for it spread across five to 10 years. So it's not an issue for them. It is not for the lack of grid that they are doing that. They are doing it also in support of the climate change agenda but by doing so, they are saving cost too. The excess power is also put on the grid to service other places. The fact is that, when you remove the cost of batteries in the installation process for solar energy, it makes the whole thing cheaper. This is because batteries are more than half of the cost of the installation. So, in the Nigerian situation, we typically have two types of installations for solar. A client may request for a solar power installation at his residence or for business, but when we do our checks, we find that the client requires just inverters because he needs just backup power. This is because there are places where the grid electricity stays on for hours and the few hours that it goes off, the back-up power kicks in with batteries charged with the grid. In places where the grid supply is low, there is a need for solar panels to charge the batteries constantly where the grid electricity is off for two to three days. If the power grid becomes reliable, one can take out batteries out of the solar energy installation and the prices could drop by nearly 50 percent. We need a responsive grid to get there and right now we have a shortage of metering electricity consumers. So, we are not even talking of a meter that helps to reduce cost of energy with solar power and grid integration. However, there are countries that have similar situations like us and that is India, China and other Asian countries where most of the batteries and inverter components we use in Nigeria come from.
What will Volsus Energy look like in three year time?
We desire to see Volsus to have grown to become a flagship energy solution provider in Nigeria and adding great value to sustainable national development. We want to have built our capacity to the level of being able to produce our own products and solar power consumables, particularly inverters. Right now, all the components such as the solar panels, inverters, and batteries that we use are all imported from international companies. We are working seriously on building our own inverters here in the country. There are companies in Nigeria that manufacture solar panels like the NASENI Solar Plant in Abuja, but we are interested in manufacturing inverters. Discussions are ongoing and we are collaborating with our international partners on that. An inverter is like a generator and they are so rugged that it lasts for five to 10 years or more.
Do you see any prospect for solar inverters in the Nigerian market?
I see a huge prospect for inverters in Nigeria because the main reason why an average electricity consumer needs one is to power basic appliances like light, television, radio and maybe a refrigerator. So, there is going to be a huge market for inverters, especially within the range of 1KVA to 3.5KVA across SMEs. Those ones need just one or two batteries and we are hoping that the prices of batteries will drop. However, batteries are still essential in the solar energy component, so that is also a prospect in Nigeria.
Why do you think the adoption of renewable energy still faces challenges in Nigeria?
Solar energy is still relatively new to consumers and in the private sector due to a number of factors. There is the challenge of perception and wrong information. Many people out there wrongly believe that it does not last long, it's too expensive and that it conks out easily. But all these things are not correct. There are ways to go about it to make it cheaper and more affordable. While one of them is by integrating financiers to provide facilities for its purchases at instalments, I still think if we start manufacturing the inverters in Nigeria, the prices will also drop significantly. But there is a need for deliberate synergy between the manufacturers and government to facilitate ready demand for it so that return on investment is guaranteed. This is because banks will depend on a sustained projection of cash flow for them to lend to private sector firms.
What is your advice to the government for improving the renewable energy sector?
I have already emphasized this and believe that in the renewable energy sector, one of the low hanging fruits is to crash the price of the installations through local production of inverters to make solar energy more affordable for the common man. To bring down that price, the government needs to put in place special intervention when it comes to the importation of the renewable energy components and strategize on how to support local manufacturing of these components. Power is so critical, it affects everything in the economy. So there is a need to find a way to make renewable energy more affordable because fixing the national power grid comprising the transmission, distribution and the generation value chain is no easy task. While the government is making that effort to fix the sector completely, it could take a while, so it should incentivize renewable energy companies to make renewable energy cheaper and affordable for those who do not have access to electricity. While doing that, the government would have gone a long way in solving the power sector problems. For instance, if students want to study at night be it in the rural communities or urban centres, they don't need to start worrying about power because they already have their little inverter and solar energy solutions. Government should therefore partner with the financial sector to implement credit and payment regimes that would boost affordability and access to renewable energy devices in the informal sector. With these, micro and small businesses like barbing and hair dressing salons would thrive better and their lives will be improved through these deliberate government policies. Government needs to commit more to closing the nation's energy deficit by leveraging private sector partnership so as to attain a high level of access to energy in line with attaining the Goal 7 objectives of the Sustainable Development Goals (SDG) which advocates energy for all by 2030.