Nigeria Electrification Programme > Frequently Asked Questions – SHS

Solar Home Systems for Households and MSMEs

1. What is the Objective of the Standalone Solar Home Systems (SHS) Component?

  • The objective of the Solar Home Systems component is to help millions of unserved and underserved Nigerian households and Micro and Small Medium Enterprises (MSMEs) access better energy services at an affordable cost, via stand-alone solar systems through the private sector companies and in turn scaling up the SHS market rapidly.

2. What are the prequalification requirements for the SHS Output Based Fund (OBF)?

  • To be qualified for the grant under the Output Based Fund, the company must have the required capacity to deliver quality verified products and services. We look for evidence of ability to track customers, pre and post-sale support to customers, financial status and resources available to invest amongst other requirements.

3. How can a company register and apply for the OBF?

  • All interested parties must first register through the REA NEP website, where basic company data is required. The applicant will then receive login credentials to access the OBF application form via our online data management platform – Odyssey Energy Solutions. Once access is granted, the applicant is required to complete the questions, upload the required documents and submit the application.

4. Can an international company be considered for the grant?

  • Yes, they will need to present evidence of incorporation from their respective country and provide government-issued evidence of tax payments and/or clearance.

5. Can more than one company apply together for the grant?

  • Yes, two companies can apply together as a Joint Venture (JV). The JV agreement must detail who is the lead applicant and must provide articles of incorporation or documents of registration for both companies. For an incorporated JV, an agreement stating that the members are jointly and severally liable, and for an unincorporated JV, JV agreement stating that the parties are jointly and severally liable is required.

6. What type of business model is eligible under the OBF?

  • The programme is business model neutral. All business models are eligible

7. What is the minimum size or capacity of a solar home system that can be admitted into the program?

  • The minimum capacity and service of systems that can be admitted into the program is a PV capacity of 6wp and provides a minimum service of 3 lamps and phone charging capabilities

8. How are nominated Solar Home Systems evaluated?

  • There is a Quality Verification Framework that each nominated Solar Home System model must pass before being admitted into the program.

9. Can I add a new Solar Home System model after signing the grant agreement?

  • Yes, but you will need to send an email to the SHS Component Lead requesting the system(s) be added to the list of approved products. The email must include a request letter and the required certification documents stated in the Quality Verification Framework based on the size and capacity of the nominated system(s).

10. Can new market entrants with no experience in the Solar Home System (SHS) market be eligible?

  • The programme was designed to support companies who have existing SHS businesses in the market and encourage them to scale quickly. Applicants are required to demonstrate a minimum level of sales in or outside of Nigeria over a 12month period. If a new market entrant does not meet this requirement, the company can partner with an experienced company to leverage their knowledge. Or wait till they have the required experience to apply.

11.How many times can a company apply for the OBF, if unsuccessful?

  • Once a company has applied and their application is unsuccessful, they can apply again within 3 months of receipt of the notice that their application was unsuccessful. Should they be rejected again, we require the company to wait for 6 months before reapplying. This timeframe allows the company to rectify their shortcomings and propose a stronger application upon resubmission.

12. Will already deployed systems be considered for the grant?

  • Unfortunately, no. Only systems sold or installed after the Grant Agreement has been signed will be considered for payment.

13. Is there a cap on the grant amount available per company?

  • There is no cap per company, however, the range will be reviewed periodically and may change based on market conditions

14. When are payments made?

  • Payments are made only after the verification of each sale has been conducted by an Independent Verification Agent. This can only take place once the grant agreement is executed by both parties and the company has sold or installed systems and submitted a request for payment on Odyssey.

15. What is an OBF claim?

  • A claim is a compilation of systems sold or installed by a grantee that includes information on each customer who purchased a system. This information is used by the Independent Verification Agency to verify the sale of the system before payments can be made

16. How often are companies expected to submit claims?

  • Within 2 months of the effective date of the grant agreement, grantees are required to submit claims for a minimum of 200 systems sold or installed. Thereafter, grantees are required to submit at least once, a minimum claim of 150 systems over a 3month period.

17. Will the grant be disbursed in Naira or US Dollar?

  • All disbursements are made in naira at the CBN prevailing rate on the disbursement day.

18. Can the grant be used to reduce the retail price of the system to the end-user?

  • As a market development programme, grant funds are not allowed to be used as a subsidy to the end-consumer. Rather the grants should be used by the company to expand their operations to enable them serve more customers quickly. The Independent Verification Agent (IVA) will gather data on pricing and any company found to be using the grant as a subsidy to the end-users will be dismissed from the programme

19. Is it a priority to deploy either in rural or urban areas under the OBF?

  • The REA’s mandate is to serve the rural population while the Nigerian Electrification Project has a mandate to increase energy access nationwide. It is important to note that system deployment is at the full discretion of the participating company. However, companies are encouraged to focus on rural areas as they encompass majority of the unserved and underserved population.

20. In the case, where a PAYG sale is complete and a company receives the grant, the customer defaults. The system is repossessed and deployed to another customer. Can the company claim another payment on a redeployed system?

  • Unfortunately, at this time, payments can only be made on one system. Payments will not be made on redeployed systems.

21. Is the OBF awarded on total number of sales or on units that the company brings into the country?

  • Funds are only awarded after the sale and verification of each system sold. Payments will not be solely on the importation of systems into the market