ECONOMIC MODEL MANUAL

This guide describes an economic model developed by Sustainable Energy for All (SEforALL) and AllOn to analyze the Nigerian solar upstream value chain. The tool evaluates the economic viability, job creation, and greenhouse gas (GHG) emission reductions associated with three market scenarios: the importation of products, local assembly, and local manufacturing of solar home systems (SHS) and mini-grids.

• The economic model is designed to help public and private stakeholders identify efficiencies and economies of scale in Nigeria's solar upstream value chain, specifically assessing how policies like importation tariffs and subsidies from the Nigerian Electrification Project impact product pricing and mini-grid tariffs.
• The model evaluates three distinct market state scenarios for both solar home systems (SHS) and mini-grids: the status quo of importing products, local assembly, and local manufacturing.
• For solar home systems, the model utilizes a cost-per-watt methodology to aggregate costs from the raw material or component level up to the per-unit level, incorporating import tariffs, insurance, VAT, capex, opex, and debt recovery.
• The mini-grid tariff is calculated using a bottom-up approach that sums the costs of site preparation, design, construction, generation and distribution assets, and metering, then subtracts a Nigerian Electrification Project (NEP) capex subsidy of $350 per connection.
• The model includes specific assumptions for job creation based on capacity increases, stating that for every 1MW of capacity added, 75 downstream jobs are created, while upstream jobs vary by role: 25 for an assembler and 13 for a manufacturer.
• The tool assesses Nigeria's export potential within the ECOWAS region by comparing the price and delivery time (days at sea) of Nigerian-assembled solar home systems against those imported from China.
• The model's base macro assumptions include a VAT of 7.5%, a company income tax of 32%, and two exchange rates: a Central Bank of Nigeria (CBN) rate of $1/N381 and a parallel market rate of $1/N468.

APA

Sustainable Energy for All (n.d.). ECONOMIC MODEL MANUAL. https://www.seforall.org/system/files/2021-02/SVC-Economic-Model-SEforALL.pdf

Chicago

Sustainable Energy for All. ECONOMIC MODEL MANUAL. n.d. https://www.seforall.org/system/files/2021-02/SVC-Economic-Model-SEforALL.pdf.

Wikipedia

{{cite report |author=Sustainable Energy for All |title=ECONOMIC MODEL MANUAL |url=https://www.seforall.org/system/files/2021-02/SVC-Economic-Model-SEforALL.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sustainableenergyforallndeconomic, author = {{Sustainable Energy for All}}, title = {{ECONOMIC MODEL MANUAL}}, institution = {Sustainable Energy for All}, url = {https://www.seforall.org/system/files/2021-02/SVC-Economic-Model-SEforALL.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }