Several recent events have affected power supply to businesses and households. Before the transition on May 29, 2023, there was a hike in electricity tariffs. In eight years, there has been a 168 percent increase in tariff. In the current Multi-Year Tariff Order 2022 (MYTO 2022) approved by the Nigerian Electricity Regulatory Commission (NERC) to run from 2022 to 2026, consumers who were paying about N16 per kilowatt an hour in 2015 now pay about N55. Maximum demand customers under band A, who were expected to enjoy electricity for 20 hours per day are paying about N71 to N80 for one kilowatt per hour.
Few days ago, the new president made an announcement that fuel subsidy is permanently “gone.”: As this policy affects the masses, solar power has had a boost in popularity and sustainability. Households and businesses now see it as a financially attractive investment. There has also been a growing alliance between renewable energy and financial technology (FinTech) companies, which has produced a Pay-As-You-Go (PAYG) model. This model allows companies to embed software into their solar-powered products. The PAYG model means that consumers can now invest in renewable energy systems by paying in instalments, while accessing the systems without the need for a large upfront investment.
PAYG can be a gateway to financial inclusion.
For a few years, solar sales agents have been registering customers through mobile apps. These clients can make daily, weekly or monthly top-up payments until the full amount is paid. The duration usually lasts between six and 36 months. Nigerian Solar companies providing PAYG energy services can reach large urban and rural customers by utilizing digital or text-enabled payment processing and customer service (USSD). The United States Agency for International Development (USAID) noted in a report that this model can serve as a gateway to financial inclusion.
According to a recent study, it has been estimated that 15-30 percent of PAYG customers complete a mobile bill payment and create a credit history for the first time through the purchase of a home system. As well, these customers generate over twice as much revenue per user for a mobile money provider than an average customer. This is economically critical in the country as over 40-percent of Nigerians are either business owners or in the process of starting one.
Some fintechs that offer the PAYG model to Nigerians.
Some companies, such as Baobab+, OneWattSolar, SunFi, Infibranches Technologies Limited, Lumos, Azuri Technologies and several others, are rapidly accelerating financial inclusion and electrification across communities in Nigeria and sub-Saharan Africa. Baobab+ Nigeria, a social enterprise that supports households and micro-entrepreneurs in their energy autonomy and digital access, started operations in 2021 by Kolawole Osinowo. This technology allows remote control of the product (via a SIM card or an integrated code system) and to activate or deactivate it depending on payments. SunFi is another Nigerian clean tech startup that connects people and businesses who want solar energy access to payment plans that match their needs. It builds financial technology that optimises and matches the right clean energy solution to meet the needs of consumers, from payment plans to installation support and maintenance.
Additionally, Infibranches Technologies Limited is a Nigerian startup that provides digital payment services to energy providers through its flagship products of OmniBranches and Green Energy Plug. The company’s single payment integration solution for solar providers facilitates payment collection through agent networks across the country while taking energy and financial access to the last mile. Then, there is Lumos Global, an off-grid power provider operating in Nigeria. They offer PAYG off-grid energy solutions, which is spiking in Africa. All the customers have to do is buy a “solar kit” from a local mobile operator store for a one-time commitment fee. Thereafter, customers pay small instalments with airtime credit daily to power their home.
Other companies that offer the same model to customers.
Azuri Technologies is a commercial provider of PayGo solar systems to rural off-grid communities. They have integrated mobile technology with solar energy to turn a development challenge into a business solution. The company protects the environment by replacing dangerous kerosene lamps. Essential services such as lighting, radio, TV, and smartphone charging are offered to rural consumers. Finally, OneWattSolar is a clean energy company that allows its customers to pay for energy using blockchain tokens. Fortunately, clients do not have to pay for the infrastructure because it is funded through financial backers. Users of this technology purchase tokens called “green coins” using naira to pay for the electricity supplied. The tokens are built on the blockchain platform, Ethereum.
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FinTechs offer PAYG model for solar. – Setbacks in power industry and fuel industry gives alternative source a boost. – Express your point of view.
Alot of fintechs are now offering PAYG to their customers. It is way to help them to do better business when it comes to solar. I hope the Fintechs will broaden this initiative and make solar accessible to people.
FinTechs offer PAYG model for solar, this is alternative for power supply for us since the electricity is poor and the Tariff is high, fuel is high also now not easy to afford solar is what we can be making use of now
Majority are leveraging this alternative power supply because of the instability of power supply in the country and the installment payment makes it more affordable.
Paying it installment will really help people be able to purchase it ,it will serve them well enjoying electricity generate from the solar
This is another option for people to enjoy electricity through solar power supply is not stable and fuel is not a good option now because is high so getting solar is a better option to take
FinTechs that offer the PAYG model for solar energy are providing a simple, efficient, and affordable solution for people who want to access clean energy but are financially constrained. With the increasing demand for renewable energy, the PAYG model for solar energy has the potential to transform the energy sector and bring clean energy to millions of people around the world.
FinTechs offer PAYG model for solar. This is a good alternative for us to use since we are currently having two major challenge in Nigeria which is power supply and fuel scarcity. No constant electricity in Nigeria. We make use of generator more but now we have sarcity of fuel. We really need alternative which is solar supply
Very soon Nigerians will not depend power distributing companies nor generator to get their homes lighting up. Gradually solar generated electricity will be accessible and affordable by every Nigerians.
It is very certain that with time every Nigerian will want to run on solar energy because electricity tariff is c constantly increasing and becoming unaffordable to the common man even fuel to power our generators is very expensive now. It is well.
I can say PAYG solar technology from FinTechs will serve as a better alternative for the poor and high cost electricity supply. And it will boost our economy system.