The Renewable Energy Association of Nigeria (REAN) has called on the Federal Government to reduce import duty on solar components as this will attract more usage of solar power.
Mrs Lande Abudu, Executive Secretary of REAN while responding to questions from the press said that the renewable energy is from a source that is not depleted when used, such as wind or solar power.
She said that the current five per cent import duty and five per cent VAT levied on solar components put these products beyond the purchasing capability of many rural dwellers that stand to gain the most from their use.
“Since the imposition of the combined 10 per cent import charges, investors in the off-grid solar market have recorded a fall in sales growth and market penetration. Value Added Tax (VAT) and import duty on solar technologies significantly inflate end-user costs, thereby undermining the ability of the solar industry to compete with traditional means of lighting and electrification.
Abudu said that kerosene lanterns and petrol generators, which already enjoy consumption from fuel subsidies from the Federal Government, are also included.
She said by exempting solar components from VAT and import duty, the Federal Government can accelerate the market demand that makes local manufacturing economically-viable while simultaneously supporting market development that expands choice and affordability for end-consumers.
According to her, REAN acknowledge the Federal Government’s desire to protect the interest of local manufacturers and anti-dumping laws through trade policies. But exemptions will be passed on to the end-customer, thus significantly reducing the retail prices of solar products, while providing reliable electricity to power agricultural and industrial processing activities.
“The Federal Ministry of Finance, through the Nigeria Customs Service should reverse the five per cent import tariff duty and five per cent VAT on renewable/solar components. FG should also ensure ministries should implement a 5-year Duty Free Importation on solar energy components, parts and materials.
“This, however, should be tied to a national bond or Memorandum of Understanding (MoU) with companies that agree and show verifiable on-the-ground commitment to begin local production of some of the solar components locally,” she said.