How to read a solar and storage proposal before you sign

Sizing against measured load

A proposal should be sized against the site’s measured consumption, not an estimate from nameplate ratings or a single month’s bills. Ideally this means interval data covering weekdays, weekends and seasonal variation, together with a record of how much load is currently met by the grid and by generators.

• Ask what data the sizing is based on, over what period, and how it was collected.
• Check the assumed share of solar output consumed on site. Surplus that cannot be used or stored has little value.
• Where a grid connection exists, confirm whether export is assumed. Under NERC’s Net Billing Regulations 2026, exports from eligible systems of 50 kWp to 1.5 MWp earn naira credits against imports rather than cash, at a regulated export tariff below the retail rate.

Yield, performance ratio and degradation

Annual yield estimates should state the irradiance source, the simulation tool and the performance ratio assumed. The performance ratio captures losses from temperature, soiling, wiring, inverters and downtime. An optimistic value can inflate projected savings by several percentage points each year. Ask for the loss breakdown, and check that soiling assumptions reflect local dust conditions and the proposed cleaning frequency.

Degradation should be modelled explicitly over the contract term and should be consistent with the module manufacturer’s performance warranty. A savings model that assumes flat output for the life of the system overstates value.

Battery capacity and cycling

Battery proposals often quote nominal capacity. What matters is usable capacity at the depth of discharge the warranty permits, at the end of the warranty period rather than on day one.

• Confirm usable energy, the permitted depth of discharge and the expected number of cycles per year under the proposed dispatch.
• Compare the implied lifetime throughput with the warranty’s cycle or energy throughput limit.
• Check how capacity fade is handled and whether replacement is priced into the offer.
• If the system will export under net billing, note that the peak export factor requires a NEMSA-verified battery meeting minimum usable-capacity criteria set in the Regulations.

Diesel displacement claims

Savings from reduced generator use are frequently the largest line in a business case and the least tested. Generators continue to run at night, during cloudy periods and when load exceeds solar and battery capacity. Ask for an hourly or sub-hourly simulation showing remaining generator hours and the fuel consumption assumed at part load, since generators are less efficient when lightly loaded. The fuel price used, and whether it is escalated, should be stated and tested against a range.

Warranties, O&M and performance guarantees

Manufacturer warranties are only as useful as the route to claim them. Establish who holds each warranty, whether the manufacturer has a presence or authorised agent in Nigeria, and who bears the cost of removal, shipping and reinstallation.

• O&M scope should specify preventive tasks and frequency, cleaning, spare parts, remote monitoring, response and repair times, and exclusions.
• Performance guarantees should state the metric (energy yield or performance ratio), how it is measured and weather-corrected, the settlement period, and the remedy if missed.
• Liquidated damages should be proportionate to the lost value, not a nominal cap.

Lease and PPA terms

Under a lease or power purchase agreement, the tariff structure matters as much as the starting price. Check whether the tariff is denominated or indexed in US dollars, fixed in naira, or linked to an inflation index, and how often it adjusts. A dollar-linked tariff transfers currency risk to the buyer, which can change the comparison with grid and diesel costs materially over the contract term. Where the arrangement involves third-party ownership of a grid-connected system, confirm how that interacts with net billing eligibility, since the template agreement in the Regulations refers to the prosumer owning the system.

Termination and buyout terms deserve equal scrutiny. Look for a clear buyout schedule by contract year, the treatment of early termination by either party, obligations if the buyer relocates or sells the site, and what happens to the assets at the end of the term.

An independent review of a proposal against measured site data can identify optimistic assumptions and contractual gaps before commitments are made, at a stage when they are still easy to correct.