Renewable Energy Association of Nigeria (REAN) Wednesday called on the Nigerian Customs Service to waive duties on imported solar panels to encourage rapid adoption of renewables in the country.
They said the current 5-10 percent duty charge on the importation of solar panels is arbitrary and unsustainable for the development of the energy subsector.
“This tariff regime could derail Nigeria’s plan to generate 30 percent of electricity through renewable by 2030,” the group implored.
According to the group, import duty on solar panels should be 0 percent under the CET code 8541.4010.00, a classification for import duty tariff.
REAN, therefore, urged the federal government to instruct the customs service to immediately stop the imposition of these port charges and establish a dedicated taskforce for renewable energy (RE) and energy efficiency (EE) to fast-track and streamline the importation process of RE and EE components.
At a press conference the group said the high import duty charge is making business more difficult for the industry, which would in turn make it harder on their clients especially SMEs.
Segun Adaju, president of REAN and CEO of Consistent Energy said the MOU agreements signed with small and medium scale enterprises (SMEs) would be meaningless if the charge comes in effect.
“This means that the SMEs are back to generator use and it means a lot. It has a multiplier effect on the economy,” he said.
Femi Adeyemo, a REAN member who is also CEO Arnegy Company disclosed how the 10 percent import charge on solar panels is frustrating his business plans as he currently has un-cleared containers containing solar panels at the port.
“The containers arrived at the port and the customs had done the usual assessment and the normal charges had been paid, but a few days prior to release of the containers, customs suddenly changed the HS code from one of 0 percent to an HS code of 10 percent,” he lamented.
He also highlighted the adverse effects of the duty charge on the small and medium scale enterprises (SMEs) that the company provides with solar solutions.
He also noted the most foreign investments were going to East Africa because of the ease of doing business was higher there unlike West Africa especially Nigeria.
Chuks Umezulora, another member of the group and COO of Auxano Solar
Energy Ltd., opined that if the government wants to impose charges, there should be clarity and it should also look at neighboring countries’ models in order to ensure that the industry is globally competitive.
According to the group, since Nigeria does not have capacity currently to manufacture solar panels in volumes to meet market demand, the only viable solution is importation.
The group also noted that cost of solar panels were falling and Paris-based International Energy Association said that renewables accounted for almost two-thirds of the power capacity generated globally in 2016 and the country would lose out if the charge is put in effect.