REAN Calls on Federal Government to Reduce Import Duty on Solar Components

Renewable Energy Association of Nigeria (REAN) has called on the Federal Government to reduce import duty on solar components to attract more usage of solar power.

The association explained that the current five per cent import duty and five per cent VAT levied on

solar components put the products beyond the purchasing capability of many rural dwellers that stand to gain the most from their use.

It added that by exempting solar components from VAT and import duty, the Federal Government could accelerate the market demand that is capable of making local manufacturing economically-viable, while simultaneously supporting market development that could expand choice and affordability for end-consumers.

“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. These include kerosene lanterns and petrol generators, which already enjoy consumption from fuel subsidies from the Federal Government.

“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.

“The Federal Government through the relevant ministries should implement a five-year duty free importation on solar energy components, parts and materials.

“Exemptions can be passed on to the end-customer in order to significantly reduce the retail prices of solar products, while providing reliable electricity to power agricultural and industrial processing activities.

“This, however, should be tied to a national bond or Memorandum of Understanding with companies that agree and show verifiable on-the-ground commitment to begin local production of some of the solar components locally,” said REAN Executive Secretary, Mrs, Lande Abudu, in an interview with the News Agency of Nigeria (NAN) in Abuja.