The new rate, effective immediately, will be ₦225 per kilowatt-hour (kWh), a significant jump from the previous ₦66 per kWh, NERC’s vice chairman, Musliu Oseni told journalists on Wednesday.

These customers—under the Band A classification—use 20 hours of power supply daily and represent 15% of the country’s 12 million electricity customers. The upward price review will not affect customers on the other bands, he said.

On Tuesday, Bloomberg reported that Nigerian authorities plan to hike electricity prices as President Bola Tinubu seeks to reduce government spending and subsidise tariffs for only Nigerians in rural areas. The move follows pressure from the country’s electricity distribution companies, the report said.

The electricity tariff hike comes amid Nigeria’s worsening power supply which has been blamed on its low level of power generation and distribution. The West African nation has an installed capacity of 13,000 megawatts for its 200 million population. 

In March, Nigeria’s power minister Bayo Adelabu said plans were underway to “settle outstanding debts owed to power generation and gas supply companies, which will alleviate the financial strain and contribute to improved generation levels nationwide.”

Emerging data is shedding new light on the electricity landscape in Africa, indicating the oft-cited statistics of those without power might be considerably lower than recent figures indicated.

Fresh analysis suggests that more and more homes and businesses are being powered by off-grid solutions, a factor that was not accounted for in past estimates.

The World Energy Outlook 2023 notes a significant uptick in the number of homes and businesses turning to solar power to meet their energy needs.

“This reversion was partially offset by robust growth in solar home system sales, which provide electricity to households not connected to electric grids. Sales of these systems surged past pre-pandemic levels last year, with strong growth in West and East Africa,” the outlook states in part.

“Thanks to increased solar home systems sales, Nigeria saw its population without access continue to drop during the crisis.”

In a recent analysis, the news platform Semafor suggested that “one of the reasons that number seems to have been unchanged for some while now is that a lot of work is being done to expand access and increasingly by non-traditional grid buildouts.”

Traditional approaches to measuring electricity access have predominantly focused on the expansion of national power grids, overlooking the rise of domestic solar energy and pay-as-you-go (PAYG) solutions whose numbers are hard to capture. The sun is fast being recognised as the one universal resource for all Africans.

Solar home systems sales soared to record levels in 2022, with most imported from China. These systems accounted for half of the increase in electricity access in Africa in the same year. 

The significance of solar power is further emphasised by its provision of electricity to over 8% of households in sub-Saharan Africa that have access.

According to the Africa Solar Industry Association’s (AFSIA) Africa Solar Outlook 2023 report, the commercial and industrial segment registered a year-on-year growth of 61.5% in the previous year.

In terms of major installations, some 949 MW of additional solar energy was installed across the continent in 2022, a 14% year-on-year increment from the 833 MW added to the grid in 2021.

With 284 MW, Angola had the most installations in 2022. The top five include Angola, South Africa (111.8 MW), Egypt (80 MW), Ghana (71.3 MW), and Mozambique (41.9 MW).

The report states, “Africa is now home to more than 10 GW of identified solar projects.”

However, estimates from state-run utility Eskom indicate that South Africa alone added more than 1,000 megawatts (MW) of private solar capacity in just two months in 2023, according to news platform Semafor.

The increase in solar installations to June was more than what was added in the preceding six months, highlighting not just South Africa’s but the continent’s solar power potential. The installations came on the back of increased power outages across the national grid. 

“What you’re seeing in these numbers is households and the private sector taking matters into their own hands,” Wikus Kruger, director of the Power Futures Lab at the University of Cape Town told Semafor. “It’s being driven not by government policy per se, but by desperation.”

Chinese customs data reveals significant solar panel imports into South Africa, totalling over 5GW (or US$1.1 billion) since January 2022, with 3.7GW in 2023 alone

While solar installation capacity in Africa has historically been driven by a few “hot spots” such as South Africa, Morocco, and Egypt, more countries are now adopting solar initiatives.

This trend towards decentralised, non-grid solutions like solar home systems and PAYG models is revolutionising electricity access in Africa. 

These methods are not only proven to be more adaptable to the diverse and often remote landscapes of the continent but also offer a more cost-effective and rapid deployment compared to traditional grid extensions. 

The PAYG model, in particular, is making solar energy financially accessible to more households by allowing users to pay for their energy consumption in small, manageable instalments. Kenyan PAYG operator M-KOPA recently launched in Soweto as the company expands across Africa. 

Countries like Côte d’Ivoire, Kenya, Ghana, and Senegal are nearing their targets for universal access, showcasing the potential of these innovative approaches. 

inq. Group, a Pan-African edge technology provider backed by Convergence Partners, has announced its AI-powered solutions for the Nigerian energy market. According to the group’s chairman, Andile Ngcaba, the product will be integrated into the distribution network of energy distribution companies (DisCos), enabling real-time analysis of energy flow and tracking energy leaks. 

This announcement follows inq.’s recent reveal of two homegrown AI products it released for its 10 markets across Africa and Asia: DocAi and VisionAI. DocAI is a tool that digitises processes for businesses and allows them to use area-specific, deep learning optical character recognition (OCR) to upload scanned documents and extract valuable information. Vision AI allows enterprises to deploy AI-powered image recognition technologies across camera surveillance systems—enabling real-time analytics and alerts.

“We have locally built the continent’s leading intellectual property in artificial intelligence. Our products aren’t plug-ins to another man’s technology,” Ngcaba said in a media briefing on Tuesday. “We will lead the continent’s adoption of AI and bring it to real-life cases in agriculture, energy, and digital recognition,” he added.

inq. Group has operated in Nigeria for about four years, and in that time has provided enterprise-level cloud, connectivity, and IoT solutions for businesses in the country. The company says it has also built proprietary large language models that are powering its AI-solutions suite today. 

The media briefing also marked the introduction of Glad Dibetso, the new group CEO, to stakeholders in the Nigerian market. Dibetso takes over this role after leaving Deloitte Consulting as a partner, cloud computing and ICT operations. Before this role, he served as the CEO of the West African operations at Dimension Data, a data solutions provider backed by Convergence Partners.

“Electricity in Nigeria is powered by distribution companies. They collect monies from end users to pay the companies transmitting and generating electricity. But DisCos have struggled to remain profitable due to the lack of proper analytics to track the distribution and detect mass leakages. This is where we come in. We are already in talks with the government for adoption,” said Valentine Chime, inq. Nigeria’s managing director.

Andile Ngcaba shared strong optimism in inq.’s business in Nigeria. “Nigeria will be inq.’s regional hub, through which we will expand to several anglophone countries in the region,” he said. 

Jikka Bobo runs a small restaurant in Abuja and currently spends about ₦50,000 on electricity monthly with an average of six hours of power daily. According to him, he already struggles with running the business and the planned hike in electricity tariff will only make his business less profitable. “In the past month, the prices of ingredients have gone up by about 25%, not to mention the cost of transporting the ingredients down here. We have appliances like a freezer, a fridge, and other cooking equipment that require electricity to run,” he told TechCabal.

From July 1, 2023, power distribution companies (DisCos) in Nigeria will increase electricity tariff by over 40% due to several reasons including the recent unification of the country’s foreign rate. For small businesses already grappling with existing problems including fuel hike and rising inflation, the proposed hike in electricity tariff will mean an increase in their energy costs which already form a significant portion of their running costs. According to the World Bank, businesses in Nigeria lose $29 billion yearly to poor electricity.

Like many other small businesses, one of Bobo’s major frustrations is that he still has to buy fuel and diesel for his generators as the power supply is not stable enough to run his business. He spends an average of ₦30,000 weekly on diesel to supplement the electricity he gets.

Bobo confesses that he’s not even sure how to navigate the proposed tariff hike. “We only raised our prices last week due to the fuel price hike, and customers have already started to complain about that. We’ll see how business goes before implementing another increase, just to see how much loss we’re incurring and if we can manage. We’re not a big restaurant yet and can’t charge as much as we’d like without losing some customers, or even making up for our loss in other areas,” he shared.

Bala Zakka, an energy analyst, said small businesses can’t afford to incur additional costs considering the state of the Nigerian economy. “Before now, small businesses were already groaning in pain due to lack of electricity. With the increase in tariff, their operating cost will go up and what that means is an increase in the cost of goods and services,” he told TechCabal.

For Anisa of Amica Salon, there just isn’t enough profit in sales to cover the jump in electricity. Anisa runs a female salon in the heart of Kaduna, and she cannot envision having to pay 40% more for electricity without increasing prices. “I did a quick calculation as soon as I heard the news and discovered that it just wasn’t possible.” 

Anisa is trying to build a salon that prioritizes quality and customer satisfaction but that just gets harder to achieve by the day. “I started out trying to build a high-standard salon and while this looks pretty straightforward, the policies in Nigeria just make that vision blurry. I import a lot of my products and materials, from wigs to hair products and appliances, and so the rising price of the dollar already makes it difficult for me to make a decent profit,” she told TechCabal.

Businesses in major cities like Lagos and Abuja might be able to raise prices easily but not Anisa’s, as her business operates in Kaduna, where the cost of living is relatively lower to cities like Lagos and Abuja. 

“We currently don’t make a lot of profit, considering that I have to pay rent and my four staff. Unless we miraculously begin getting more clients, I’m going to have to increase my prices, which will probably discourage some of my already loyal clients.”

Anisa boasts six electricity-guzzling bonnet hair dryers, electrical chairs, and some other appliances including water heaters and steamers. Nearly all of her services require electricity, and even when they don’t, she still has to turn on the air conditioning for her clients. “Some clients can’t sit in your shop without the AC being turned on. Sometimes we even try to conserve units by turning on the fan, and they insist on air conditioning,” she shared.

Her salon gets a relatively steady power supply, but that also means that she spends a lot more on electricity units for their prepaid meter. While ₦10,000 could get her salon about 200 units, a 40% increase means that she’ll only be able to purchase just about 120 units with the same amount. 

Small businesses have little choice but to resign themselves to the current reality, and hang on as long as they can. However, Adeola Adenikinju, a professor of Energy Economics at the University of Ibadan, told TechCabal that the upward price review reflects the market but the consumers shouldn’t have to bear the burden alone. “There is a responsibility for the DisCos to improve the quality of service so people have adequate and stable electricity. It is high time we did away with estimated billing that places the burden of payments on the citizens,” he said.

Furthermore, SARB also states that load-shedding may add 0.5 percentage points to headline inflation in 2023. This is because the  high operating costs of running diesel generators are passed to consumers, and higher rates of wastage and spoilage, especially along food value chains, lead to possible goods shortages.

The reserve bank also noted that load shedding will likely adversely impact other macroeconomic variables. These include causing a contractionary effect on growth that could hamper a sustained recovery in employment—causing unfriendly investor sentiment which would raise South Africa’s risk premium and pressure on the exchange rate.

“The transition of households to alternative energy sources is likely to widen the already skewed income and development distribution in South Africa, as it is mainly middle- to high-income households that can invest in alternative energy sources, while poorer households are largely without recourse,” the bank said in the review report.

A risk to financial stability

SARB states that load shedding continues to act as a risk factor to the country’s financial stability. To start with, the prevalence of higher stages of load-shedding poses an immediate risk to the efficient functioning of infrastructure such as automated teller machines (ATMs) and cellular networks, which are crucial for the smooth functioning of the financial system. Load shedding also contributes directly to increased insurance claims and

higher excess costs as outage-related claims from households and businesses

mount. It has led to an increase in the number of insurers excluding load shedding-related claims from insurance policies.

Despite the announcement of mitigation efforts for load shedding during the country’s budget review this year, SARB only expects the efforts to start bearing any fruit in the next 12 to 18 months. This means load-shedding will remain severe and impact economic activity negatively over at least the next 12 months.

Getting ready for the worst-case scenario

According to the governor of the central bank, Lesetja Kganyago, the bank’s Financial Sector Contingency Forum (FSCF) is working on a contingency plan for the ‘unlikely’ but not ‘impossible’ scenario of a national grid failure.

“In line with the role and function of the FSCF, current efforts are centred on developing, coordinating and testing contingency plans to mitigate the impact of a national grid shutdown on the financial system and the economy,” said Kganyago.

Earlier this month, Eskom warned that it might need to implement high stages of load shedding in order to meet surging demand during the winter months but refuted claims of a possible grid collapse.

South Africa is not only going through a power crisis due to the national provider’s—Eskom—troubles. The country is also trying to transition from fossil fuels to renewables, making startups offering alternative energy solutions a necessity in the country.

Enter WiSolar. Launched in 2016, WiSolar is a greentech startup offering what can be described as a power-as-a-service solution. In properties where the startup has deployed solar equipment, customers are able to purchase power on demand using a mobile app.

Additionally, WiSolar also allows customers to purchase solar equipment for themselves, either through cash or financing options.

TechCabal had a chat with Tonye Irims, founder of WiSolar, to get a deeper understanding of the startup’s offering, the revenue model, its expansion ambitions and much more. 

TechCabal: Please tell us more about WiSolar and the problem you are trying to solve through your product offering

Tonye Irims: We refer to ourselves as a green digital utility. We started as a regular solar electricity company selling solar equipment and eventually evolved into a greentech data utility. We deploy solar electricity in large-scale developments.

Through our solution, people don’t have to get into a house and buy solar systems as separate assets. Once you get into the house, you already have solar electricity baked in, and you just pay per kilowatt hour using the app. What we found in South Africa, especially now with the energy crisis, is people don’t have money to buy solar electricity as an extra asset to add on to their homes, because the cost of such equipment goes into the hundreds of thousands of rands. 

So the way we figured out how to solve that problem is to actually partner with residential property developers to make sure that homes come with pre-installed solar equipment.

Through our power purchase agreement (PPA) which lasts for a 20 to 25-year period, clients pay 90 cents per kilowatt hour and don’t have to carry the cost of the solar equipment in their homes. We raise capital to buy the equipment which then belongs to us whilst customers buy the power via the mobile app.

TC: How much traction have you gained since launching?

TI: We are working on 2,400 homes right now with the prepaid solar rollout in Cape Town. In the next three years, we intend to be listed publicly on the South African stock exchange. As far as expansion is concerned, we currently have a presence in South Africa, Nigeria, and Zimbabwe, and we are looking to further expand to Australia in the future.

We are also thinking of franchising our model where we will have outlets owned by the franchisees under our brand. 

TC: What are the challenges that WiSolar has faced so far in its operations?

TI: The main issue we are currently facing is getting the right partners as far as capital raise is concerned. It took us two years to develop our application and in that time, we had to get the right software partners, the right hardware partners, which required a substantial amount of funding.

Another factor which might be of concern but which has not really bothered us as much is crime. Obviously, our equipment is highly sophisticated and valuable hardware which might be of interest to bad actors. But we have invested in a lot of security around how we ship and warehouse the equipment so we have not had much of an issue there.  

TC: Is the current state of power in South Africa an opportunity for WiSolar, looking at the fact that it is providing an alternative to the troubled national grid?

TI: Yes, we do look at it as an opportunity. But there’s another thing that’s happening where there is a transition from fossil fuel-based power to renewables. And it just so happens that in South Africa where we have an energy deficit, you know, not only are they trying to transition from fossil to renewables, but they are also trying to fill the energy deficit. So to us, those are two opportunities where we can be able to come in and address the pain points.

TC: How much would you say the product has evolved from the time it launched up to now?

TI: When we started in South Africa, people weren’t really comfortable with solar electricity. They didn’t even know that it actually generated power and the only source of power they knew about was the national grid via Eskom. They didn’t know about the alternative sources of power.

But since then, there has been a shift.  People now appreciate that there are actually other sources of power which are cleaner and more reliable than what they have always had. Another shift has been in the mentality of homebuyers. People now believe that if a home does not have alternative sources of power, it’s not as attractive.

So from those shifts in mentalities, we have seen that most homes want and have solar electricity baked into the properties. At a minimum, they have backup solar sources, the bottom line being they are no longer just reliant on the national grid.

TC: Beyond just the power as a service offering, what other iterations of the product does WiSolar have?

TI: As far as our products go, we have three options for customers. For single dwelling units, we have the cash option where customers can buy the equipment and own it. In 2020, we introduced a financing option where you can now own the asset, but finance it so you don’t need to put cash upfront, but pay monthly installments towards it. 

The third option is prepaid solar where customers buy the power on-demand and don’t own the equipment. The deal is actually between us and property developers, where the system is now baked into the property. 

TC: What impact do you think a product offering like WiSolar’s can play in alleviating South Africa’s power woes?

TI: Where we want to get to is climate zero. And we also want to enhance energy security in the country. The reason why that is, is because remember that we’re now going into a period where electric vehicles will eventually become the main source of mobility, so that will still require a lot more energy than what we currently use. 

So we want to ensure that there is sufficient energy to go all around when that time comes.

*Interview has been edited for clarity and length

Yesterday morning during the System and Winter Outlook briefing, Eskom cautioned that the power system is severely constrained and there is a high risk of elevated stages of load shedding in winter.

Giving a performance overview, Eskom Generation group executive, Bheki Nxumalo, said that the power generating system continues to show poor performance, with frequent plant breakdowns subjecting the country to elevated stages of load shedding. These shortages will persist throughout the winter months, necessitating the continued implementation of load shedding.

Nxumalo added that unavailability of the three units at Kusile Power Station and the unit at Koeberg 1 Power Station have removed 3,080MW of capacity from the grid, equivalent to three stages of load shedding.

“We are striving to reduce plant breakdowns to 15,000MW or below for the winter period to keep loadshedding at lower stages. We, however, concede that this will be extremely hard given the unreliability and unpredictability of the power generating fleet and that we are already about 3,000MW worse off this winter compared to the same period last year,” said Nxumalo.

According to the outlook, with breakdowns or unavailable capacity due to unplanned maintenance at 15,000MW, loadshedding might be predominantly implemented at Stage 5 for the winter period. Should breakdowns reach 16,500MW, loadshedding might be implemented at Stage 6. If unplanned outages reach an average of18,000MW, loadshedding might be required every day and might be implemented up to Stage 8. Eskom emphasised that the 18,000MW scenario that could culminate in Stage 8 is an ultimate worst case scenario.

“We fully comprehend the adverse impact that rotational load shedding has on South Africa’s already fragile economy and its people. We are doing everything to mitigate the intensity of rotational load shedding including taking lessons from the rest of the world. We have seen that effective rotational load shedding during winter months requires a coordinated effort among all stakeholders within a country,” said Eskom board chairperson Makwana.

Interim Group Chief Executive of Eskom, Calib Cassim, said that South Africa experienced the highest levels of load shedding as the energy availability factor (EAF) deteriorated to 56% in the past financial year, against the target of 60%. However, he also remarked that there were some encouraging developments in the efforts to deal with the electricity crisis in the country.

“The establishment of the National Energy Crisis Committee (NECOM) and the development of South Africa’s Energy Action Plan, overseen by government, are some of the positive developments aimed at addressing the electricity crisis. Furthermore, the determination by the National Energy Regulator of South Africa (NERSA) of a favourable tariff increase as well as the debt relief solution by the National Treasury are critical enablers of sustainable electricity supply industry,” Cassim commented.

Speaking on the possibility of a national blackout which has been touted by the media over the last few weeks, Eskom Group Executive for Transmission, Segomoco Scheppers, stated that there are a number of control measures, including load shedding, that are aimed at protecting the power system from collapsing.

“Efforts are underway to return a number of units from outages to mitigate the worst case scenario of 18,000MW or above from materialising. Eskom will also keep planned maintenance at a maximum of 3,000MW during the winter period,” said Scheppers.

In a ruling passed by Judge Norman Davis, South Africa’s department of public enterprises Pravin Gordhan is ordered to “take all reasonable steps” within 60 days to ensure that public health establishments, state schools and the South African Police Service are not affected by load shedding.

The judgement comes on the back of a campaign by the United Democratic Movement (UDM), Inkatha Freedom Party, Action SA, the National Union of Metalworkers and other organisations to spare hospitals and clinics, 23 000 public schools and police stations from load shedding.

In its defence, Eskom argued that it would be technically impossible to isolate and exclude some buildings from load shedding, given how embedded they are in Eskom’s transmission and distribution networks, and that they share distribution lines with thousands of other customers.

In the other part of the case, whose ruling was reserved for September 23rd, the plaintiffs seek to declare the Cyril Ramaphosa-led government’s response to loadshedding as unconstitutional and breaching a number of fundamental constitutional rights.

Some experts have however argued that the exemption of some institutions from load shedding could lead to a collapse of the national grid. Andre de Ruyter, former CEO of Eskom, explained that the facilities of exempted institutions are embedded in distribution networks containing other residential and non-residential loads.

“Given the very large number of institutions and facilities the applicants seek to protect from load shedding and the fact that most are embedded in distribution networks spread throughout the country, were they to be excluded from load shedding, there would be very little load left to shed to reduce demand on the grid. This presents a manifest risk of grid collapse or blackout,” De Ruyter said.

To account for that case scenario, the high court ordered that where it’s impossible to isolate embedded buildings and spare them from load shedding, the department should ensure that generators and other alternative energy sources are secured to ensure uninterrupted power.

The company, formerly known as M Auto, aims to replace Uganda’s emission-spewing motorbikes with cleaner alternatives. To do this, Spiro, with the backing of the government, will set up an electric motor assembly plant in Kampala, Uganda’s capital, in the hopes of fostering affordability through localised production. This plant will add about 9,000 jobs to Uganda’s economy. 

Spiro’s latest announcement puts Uganda in the green energy spotlight. As part of a year-end national address, Uganda’s president, Yoweri Kaguta Museveni, promised to hand over brand-new electric motorcycles to current commercial riders for free. Uganda’s partnership with Spiro fits into the country’s mission to electrify its city and preserve its declining air quality.

Spiro claims it has deployed over 4,500 electric motorcycles in Benin, Togo, and Rwanda since 2022, and is set to expand into ten other African countries by 2030. 

In a press release sent to TechCabal, Shegun Adjadi Bakari, CEO of Spiro and partner at the African Fund for Transformation and Industrialization (ATIF), said: “In the coming weeks, we will launch our program to substitute conventional motorcycles with electric ones. Drivers in Uganda will be able to trade in their old motorcycles for one of our commercially available models at no cost. This is a groundbreaking move in Africa, and we have already implemented this scheme in Benin, Togo, and Rwanda, with a favorable market reaction. We are excited to bring the same approach to Uganda.” 

“Our ability to deploy over 4,500 electric motorcycles in less than a year of operation is evidence of the fact that electric two-wheelers are the future of sustainable mobility in Africa,” Bakari added.

Motorcycles, locally referred to as boda boda, are widely used in Uganda for individual and commercial purposes. Reports show that there are over a million boda bodas across the country, with about 200,000 registered in Kampala, the capital city plagued by an air pollution crisis. 

In a speech at the signing with Spiro, the Minister of Works and Transport, Edward Katumba Wamala, said, “Many countries are adopting policies on clean energy and Uganda cannot be left behind. The Introduction of e-bikes is one step towards the right direction of greening and improving air quality in the country.”

According to Spiro, its ability to deploy electric motorcycles has been facilitated by the backing of investors, including the African Fund for Transformation and Industrialization (ATIF), which has provided over $50 million in funding for the company. 

WiGo is a hybrid prepaid solar electricity app that enables users to register and sign in to buy prepaid solar electricity tokens, recharge remotely, view electricity top-up history and view solar performance.

Individuals and companies can also partner with WiSolar to earn commissions on packages sold. Partner installers, on the other hand, earn on installations and maintenance.

Another perk offered by WiGo is that partner developers and property owners will be able to view customers, earn commissions on prepaid tariffs, and determine prepaid tariffs for tenant solar usage. WiSolar claims that developers and property owners can get improved cash flow by having electricity used through the prepaid metre paid back to the owner.

Speaking on the launch, the founder and CEO of WiSolar, Tonye Irims, said the launch of the mobile app is a furtherance of the company’s commitment and drive to democratise the delivery of solar electricity.

“One of our commitments as a tech company and startup is the goal to ensure that we contribute to the reduction of CO2 emissions and to contribute in our own little way of empowering solar electricity users and bringing the same closer to people across Africa,” he added.