Solar versus diesel: how to work out what a kilowatt-hour really costs you.
Two formulas, three numbers you already have, and the gap between the posted price and the price you actually pay.
How do you compare solar with diesel generation?
Price diesel per kilowatt-hour first, because that is the number solar has to beat. Fuel cost per kilowatt-hour is the pump price divided by the kilowatt-hours a litre actually produces. In Nigeria that is about ₦314 to ₦429 per kilowatt-hour at posted pump prices — and about ₦361 to ₦514 at what buyers actually pay.
Use the posted figure to understand the floor and the delivered figure to make a decision. Then work out how many of those kilowatt-hours a day solar can actually serve — that is the only number that turns a comparison into a business case.
Posted price versus the price you actually pay.
In Nigeria, diesel is routinely bought on the black market, and buyers report paying 15–20% above posted pump prices. Grid tariffs show a comparable gap between the published rate and what a site ends up paying.
| Line | Published | Effective, as reported by buyers | Basis |
|---|---|---|---|
| Diesel, per litre | ₦1,100 to ₦1,500 | ₦1,265 to ₦1,800 | 15–20% above posted, reflecting black-market purchase |
| Diesel, per kilowatt-hour | ₦314 to ₦429 | ₦361 to ₦514 | At about 3.5 kWh per litre, fuel only |
| Grid, Band A feeder | ₦209.5 | About ₦241 to ₦251 | Published tariff plus the reported 15–20% gap |
The published figures are what appear in tariff orders and price reporting; they are the floor, not the bill. The effective figures are what buyers report paying. Neither is a quotation — get your own delivered price and your own feeder’s actual supply before you commit.
Price the diesel you are displacing.
One division. Use your own delivered price, not a posted national average.
| Input | Value used | Where it comes from |
|---|---|---|
| Pump price, posted | ₦1,100 to ₦1,500 per litre | The range reported across Nigeria in 2026 |
| Black-market premium | 15–20% | Reported by buyers who purchase off the posted network |
| Delivered price | ₦1,265 to ₦1,800 per litre | ₦1,100 × 1.15 to ₦1,500 × 1.20 |
| Yield | About 3.5 kWh per litre | Typical for a mid-size diesel genset at a sensible load |
| Fuel cost per kWh, posted basis | ₦314 to ₦429 | ₦1,100 ÷ 3.5 to ₦1,500 ÷ 3.5 |
| Fuel cost per kWh, delivered basis | ₦361 to ₦514 | ₦1,265 ÷ 3.5 to ₦1,800 ÷ 3.5 — this is the number solar has to beat |
All of these are fuel only. Servicing, oil, filters, overhaul and the genset’s own capital cost sit on top.
Work out how much of it solar can actually serve.
This is where most comparisons go wrong. Solar does not displace the generator — it displaces the generator hours it can cover.
| Period | Can solar serve it? | What decides |
|---|---|---|
| Daytime, load under the array output | Yes | Array size against the daytime load curve |
| Daytime, load above the array output | Partly | The gap falls back on the generator or the grid |
| Evening and night | Only with storage | Battery kilowatt-hours, and how deep you cycle them |
| Cloudy days | Reduced | Design for the poor months, not the average month |
A system sized only to the average day will underperform exactly when you need it most. Size against the poor month and the comparison stays honest.
Put the two together.
Annual diesel avoided, then the payback. Three inputs, all yours.
| Step | Formula | Note |
|---|---|---|
| Daily solar output | array kW × peak sun hours × performance ratio | Use the poor month, not the annual average |
| Diesel displaced per day | the part of that output your load actually consumes | Export to a grid that pays poorly is worth much less |
| Annual fuel avoided | displaced kWh × 365 × your fuel cost per kWh | Use your delivered price, not the posted one |
| System cost | from the published price table | Convert at your own rate — we do not publish an exchange rate because it moves weekly |
| Payback | system cost ÷ annual fuel avoided | Sanity-check anything under three years before you believe it |
The arithmetic, on stated assumptions.
These are assumptions, not a quotation. Change any one of them and the answer changes.
| Line | Value | Assumption stated |
|---|---|---|
| Daily array output | 30 kW × 5.0 h × 0.8 = 120 kWh/day | Peak sun hours and performance ratio for a good site |
| Share consumed on site | 90 kWh/day | Load consumes three quarters; the rest is exported at a poorer rate |
| Generator hours removed | Those 90 kWh/day | Assumes the load is on during the pumping window |
| Annual fuel avoided | 90 × 365 = 32,850 kWh | Before any degradation or downtime |
| At ₦361/kWh | About ₦11.9 million a year | Delivered basis, bottom of the range |
| At ₦514/kWh | About ₦16.9 million a year | Delivered basis, top of the range |
| For contrast, at ₦429/kWh | About ₦14.1 million a year | Posted basis — understates the case if you buy off-market |
| System price | $12,200–13,800 | Published price for this configuration, equipment FOB |
| Payback | Convert at your own rate | Divide the system price in local currency by the annual figure above |
Freight, duty, installation and permits are not in the system price and must be added before the payback means anything. See what is not included.
What makes this comparison lie to you.
| Trap | Why it matters |
|---|---|
| Part-load fuel burn | A genset at 30% load burns noticeably more fuel per kilowatt-hour than at 75%. Your real figure is probably worse than 3.5 kWh per litre |
| Using posted pump prices | If you buy off-market, the posted price understates your cost by 15–20% and the payback looks longer than it really is |
| Fuel only, no servicing | Oil, filters, overhaul and eventual replacement are real costs the fuel figure hides |
| Sizing to the average month | Cloudy weeks cut output exactly when the generator would otherwise be running hardest |
| Counting exported kilowatt-hours at retail value | Where net metering pays a generation rate rather than the retail rate, exported output is worth far less than self-consumed output |
Send the generator record, get the comparison.
Your generator size, the hours it runs and your delivered fuel price are enough for us to run this arithmetic on your site rather than on our assumptions.
Request the comparison- Three-phase solar system prices by size
- What is inside a three-phase system price
- How to calculate load and backup hours — the other half of the arithmetic
- Hybrid system prices by size — the system cost input
- Nigeria factory solar sizing — feeder bands and diesel spend
Frequently asked questions
Why does this page show two diesel prices?
Because they answer different questions. The posted price is what appears in reporting and is the floor. The delivered price — 15–20% higher where fuel is bought off the posted network — is what a site actually pays, and it is the one a business case should use.
How many kilowatt-hours does a litre of diesel produce?
About 3.5 for a mid-size genset running at a sensible load. At light load the figure falls, which is why a genset idling overnight is the most expensive power on the site.
Is solar cheaper than a diesel generator?
On fuel cost alone, in most of the markets we work in, yes — but only for the hours solar can actually serve. The honest answer is a number, and it comes from your generator hours and your fuel price.
Do I still need the generator after installing solar?
Usually yes, for the hours and the surge loads solar and storage cannot cover. What changes is how often it runs. Sizing a system to remove the generator entirely is a different and much larger project.
Should I size the battery to run the generator less, or to cut the bill?
They are different objectives. Removing generator hours means sizing against the outage window and the critical load; cutting the bill means sizing against the daytime load curve. Pick one before specifying.
What about servicing and replacement of the generator?
Real costs, and they are not in the fuel-per-kilowatt-hour figure. If your generator is near overhaul, the avoided servicing belongs in the case too.
Does this work where the grid is reliable?
The arithmetic changes but the method does not. Where grid power is cheap and steady, solar competes on price per kilowatt-hour rather than against a generator, and the export rate becomes the deciding number.
Send the generator record.
Size, running hours and delivered fuel price. We will run the comparison on your numbers and tell you which configuration the case actually supports.
Request the comparison