In an exclusive interview with FRONTPAGE, Adewale Odugbesan, the Chief Executive Officer of Royal Power & Energy Limited, shared insights into the company’s significant contributions to Nigeria’s renewable energy sector. He also addressed critical issues such as the affordability of solar power compared to the Band A tariff, the impact of foreign exchange volatility, and the company’s innovative approaches to making solar energy accessible to more Nigerians. Here’s a detailed breakdown of the conversation:

Foreign Exchange Volatility and Its Impact on the Renewable Sector

One of the major challenges facing Nigeria’s renewable energy sector is the volatility of the foreign exchange (FX) market. However, Odugbesan revealed that Royal Power & Energy has managed to navigate this issue effectively. He explained that while the naira has experienced significant devaluation, the cost of solar panels has decreased at an even faster rate.

“From mid-2020 to December 2024, the cost of solar panels dropped more than the rise in the naira versus the dollar. This has made solar power more competitive and affordable,” Odugbesan said. He attributed this trend to global advancements in solar technology and economies of scale in production, which have driven down prices worldwide.

Government Support for Renewable Energy Imports

Odugbesan acknowledged the Nigerian government’s efforts to support the renewable energy sector through reduced tariffs and duties on solar equipment. He noted that while batteries attract a 20% duty, solar panels imported without modules are duty-free, and those with modules incur only a 5% duty.

“The government has done well in supporting the renewables industry. Compared to other sectors like automotive, where duties can exceed 35%, the policies for solar imports are quite favorable,” he said. This support has played a crucial role in making solar energy more accessible and affordable for Nigerians.

Solar Power vs. Grid Electricity: A Cost Comparison

One of the most compelling aspects of the interview was Odugbesan’s comparison of solar power costs to grid electricity and diesel generators. He revealed that solar energy has become the most cost-efficient option for powering homes and businesses.

“When we started our solar department eight years ago, solar power cost about $3perkilowatt-hour(kWh).Today,\; it’s\; down\; to\; 0.10$ per kWh, which is about N160. In comparison, Band A grid electricity costs between N220 and N250 per kWh, while diesel generators cost around N400 to N450 per kWh,” Odugbesan explained. This makes solar power not only environmentally friendly but also the most economical choice for consumers.

Cost of Energizing a Three-Bedroom Flat with Solar

For many Nigerians, the upfront cost of installing solar power systems remains a concern. Odugbesan addressed this by explaining that the cost varies depending on the energy needs of the household.

“For a three-bedroom flat, the cost can range from less than N1 million to over N3 million. It depends on factors like whether you use inverter air conditioners, how many hours of backup power you need, and the overall load,” he said. However, he emphasized that Royal Power & Energy offers flexible payment options, including power-as-a-service models, where customers pay only for the electricity they consume without bearing the upfront cost of installation.

Addressing Affordability Concerns

To make solar power more accessible, Royal Power & Energy has introduced innovative financing models. Odugbesan explained that the company can install solar systems at no initial cost to the customer, who then pays for the power consumed over a five-, seven-, or ten-year contract.

“We’ve seen payback periods as low as 18 months for some customers, especially businesses that save significantly on diesel costs. For residential customers, our power-as-a-service model ensures affordability by spreading the cost over time,” he said. At the end of the contract, customers have the option to own the infrastructure or continue with the service.

Insurance and Risk Management

Odugbesan also addressed concerns about potential risks, such as theft or damage to solar installations. He assured that Royal Power & Energy provides comprehensive insurance coverage for all projects, from transit to installation and operation.

“We have transit insurance, construction insurance, and ongoing coverage for the installed systems. This ensures that both the company and the customer are protected against unforeseen events,” he said.

Client Base and Market Reach

Royal Power & Energy serves a diverse clientele, including telecommunications companies, banks, critical national infrastructure (CNI) players, and residential customers. Odugbesan highlighted the company’s strong presence in the telecom sector, where it provides power infrastructure for mast sites.

“We work with all major telecom operators and top banks in Nigeria. Our solutions include solar panels, batteries, inverters, and UPS systems tailored to meet the specific needs of each client,” he said.

Standing Out in the Renewable Energy Sector

What sets Royal Power & Energy apart from other solar providers? Odugbesan pointed to the company’s technical expertise, extensive experience, and unique service offerings.

“We’ve been in the industry for nearly 20 years, and our technical knowledge is unmatched. We’re also the only company that offers both Engineering, Procurement, and Construction (EPC) services and power-as-a-service models at scale,” he said. This dual approach allows the company to cater to a wide range of customer needs, from large-scale industrial projects to residential installations.

Maintenance and Durability

Odugbesan emphasized the importance of after-sales service in ensuring the longevity and efficiency of solar installations. Royal Power & Energy has a dedicated service team, with engineers stationed across all 36 states and the Federal Capital Territory.

“We service about 4,000 pieces of equipment every quarter. Our service level agreements ensure that clients receive regular maintenance, and we provide warranties for all installations,” he said. This commitment to quality and customer satisfaction has earned the company a strong reputation in the industry.

Advice for the Minister of Power

When asked about his advice for the Minister of Power, Odugbesan praised recent policy changes that have made it easier for renewable energy providers to operate.

“The government has done a lot of work behind the scenes, such as revising laws to allow power developers to sell electricity directly to consumers without going through the national grid. This is a game-changer for the industry and will help close the power deficit in Nigeria,” he said. He encouraged the government to continue supporting renewable energy initiatives and creating an enabling environment for private sector investment.

Conclusion: A Bright Future for Solar Power in Nigeria

Royal Power & Energy Limited is at the forefront of Nigeria’s renewable energy revolution, offering affordable, reliable, and sustainable solar solutions. Through innovative financing models, technical expertise, and a commitment to customer satisfaction, the company is making solar power accessible to more Nigerians while contributing to the nation’s energy security and economic growth.

As Odugbesan aptly put it, “Solar power is no longer a luxury; it’s a necessity. With the right policies and investments, Nigeria can harness its abundant solar resources to power homes, businesses, and industries, paving the way for a brighter and more sustainable future.”