Customs slowing down growth of solar power in Nigeria with arbitrary port charges – REAN

Arbitrary charges allegedly levied on imported solar power photovoltaic (PV) parts by Nigeria’s Customs authorities have contributed to the slow pace of deployment of solar power to homes and offices in Nigeria, the Renewable Energy Association of Nigeria (REAN) has said.

REAN, an industry pressure group set up in 2016 to push for broader adoption and deployment of renewable energy sources to cut down the country’s energy poverty, said at a press briefing in Lagos that Nigeria could miss its target of having up to 30 per cent of the electricity distributed to its people come from renewables by 2030 on account of the Customs’ levies.

It also alleged that the port levies by the Customs have continued to deny Nigeria the benefits from a steady fall in costs of solar power components whereas other African countries with favourable customs levy have benefitted from this drastic cost reductions.

In 2016, OGN reported that the Nigerian Customs planned to raise import tariff on solar power components.

However, at the press briefing on Wednesday reportedly supervised by REAN’s president, Mr. Segun Adaju, the association called for a cancellation of such duty charges.

OGN got details of the briefing from the official twitter handle of the association @REANigeria.

The association said that the Customs forces its members to pay between 5 per cent and 10 per cent import duty on solar panels. It warned that such high duty rates could escalate the cost of acquiring solar power in Nigeria.

“Protests continue as League of Renewable Energy Companies in Nigeria set to mitigate against the effect of exploitation and extortion by @CustomsNG on imported solar products,” said REAN on its twitter handle.

It added: “It has come to the attention of executive committee of the REAN, a leading private sector renewable energy group in Nigeria, that our members are being forced to pay between 5% – 10% import duty on solar panels by @CustomsNG.

“This new import duty on solar panels by @CustomsNG may lead to hike in cost, derailing FG’s renewable energy plans.”

REAN stated: “We therefore urge @FMPWH @UNDPNigeria @Nigeria @MBuhari @NGRPresident @NGRSenate @EBESnigeria @ProfOsinbajo @tundefashola @HMKemiAdeosun to take control of the situation and instruct @CustomsNG to stop the imposition of these charges on imported solar panels.”

Far-reaching impacts of alleged duty rates

Highlighting the impacts of the rates on its members operations, the REAN explained that discharge of imported solar components from the ports have been slow, while solar projects costs in the country could rise.

According to it: “Consequently, discharge of goods from the ports has been slowed down immensely and demurrage charges have risen for our members since the start of the year.

“The imposition of arbitrary port charges by @CustomsNG will accelerate value destruction in this industry and will cause prices to rise to uncompetitive levels. All over the world, the cost of solar panels is falling, hence increased adoption of renewables.”

“This new tariff by @CustomsNG will increase acquisition cost of solar panels in Nigeria which are currently heavily deployed in rural areas where purchasing power is low.

“Even though under the CET code 8541.4010.00 – a classification for import duty tariff – import duty on solar panels should be 0%,” it added.

A call for help

REAN called on the Nigerian authorities to intervene in the development. It highlighted that at the moment Nigeria does not produce solar power components and as such cannot afford such entry barrier measures on solar components.

It explained: “Nigeria currently does not have capacity to manufacture solar panels in volumes that can meet market demand hence our recourse to importation while growing capacity locally.

“We therefore urge @FMPWH @UNDPNigeria @Nigeria @MBuhari @NGRPresident @NGRSenate @EBESnigeria @ProfOsinbajo @tundefashola @HMKemiAdeosun to take control of the situation and instruct @CustomsNG to stop the imposition of these charges on imported solar panels.”

“This could derail Nigeria’s plan to generate 30 per cent of electricity through renewables by 2030,” REAN warned.

“As concerned Nigerians, the members of REAN have answered the national call by providing solutions to the country’s epileptic power situation and provide over 10,000 direct and indirect jobs. @CustomsNG officials keep disrupting our progressive hard work.

“This is apart from the other benefits like increased disposable incomes, improved environmental conditions (like reduced noise and air pollution due to displacement of diesel generators), the association noted.