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Nigeria's solar boom faces cost and policy barriers

Nigeria's rising solar imports signal a search for alternatives to unreliable grid power and high fuel costs. But adoption is being held back by steep upfront prices, limited financing and policy uncertainty.

https://p.dw.com/p/5Db3HNigeria is Africa's second-largest importer of solar panels, behind South AfricaImage: Alfred Odiba/DWAdvertisementInside a music studio in Owerri, the capital of Nigeria's southeastern Imo State, there is no generator noise, no lingering fuel smell, and no flickering lights. That's considered a rarity in a country where chronic electricity shortages are commonplace.

Music producer Somik Chris Ikesom told DW that since switching to solar power, he no longer needs to rely on backup generators around 80% of the time. He described his experience with the public power supply as "whenever it comes, we use."

Ikesom, who has worked in the music industry since 2007, told DW that counting on generators during frequent blackouts is a reality familiar to millions of Nigerians, many of whom are now actively seeking alternatives to faltering power grids.

Nigeria has overtaken Egypt to become Africa's second-largest importer of solar panels, behind only South Africa, according to data published by Global energy think tank Ember.

But while the numbers suggest momentum, the reality on the ground is more complex.

Installers, analysts, and users note that solar adoption in Nigeria is accelerating unevenly — often limited by cost rather than interest.

"You know what goes with generators," Ikesom said. "It can just begin to fumble at any time, you know, and you have the cost of fuel to worry about and the noise that goes with it."

Beyond inconvenience, unstable power was damaging his business. "My equipment, they're sensitive to power fluctuations," he explained.

"Over the years, I was losing some of my equipment … because sometimes when the generator wants to go off, it just goes off."

Solar offered something different. "I wanted something steady and reliable," he told DW. "So that I can just walk into the studio and do whatever I want to do at any time."

The change was immediate. "I don't have power outages anymore," Ikesom said.

His experience, however, also illustrates a central constraint. "Installing solar these days is not cheap," he said. "It's very costly. Very, very costly. It runs into millions."

That constraint is echoed by solar companies themselves.

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Gbenga Kogbe, CEO of Lagos‑based energy company Sunhive, says interest in solar has grown, but higher diesel prices have not produced a mass shift.

"Over the past 12 to 18 months, we've seen massive growth in demand for solar," he told DW.

But the number of inquiries, he added, has "stayed relatively stable" largely because "people's purchasing power has shrunk."

"The alternative is non‑consumption," Kogbe said. "I'll just stay in darkness."

For many households and small businesses, the choice is not between generators and solar, but between power and no power at all. Solar costs have fallen sharply over the past decade, but the upfront investment remains out of reach for most Nigerians.

One response has been a shift away from selling systems outright towards providing electricity as a service.

"So solar, in my view, is if you look at solar as an asset class that individuals have to purchase, it becomes inaccessible for a vast majority of Nigerians," Kogbe said. "But if you look at it as a service, then everybody can get access to it."

"The heart of renewable power is the battery," Kogbe said. "Lithium is at the forefront of energy storage."

Sunhive is now moving towards owning solar assets and selling power directly, focusing on commercial users, battery storage, electric mobility and rural mini‑grids.

"The cost of capital in Nigeria is quite high," Sunhive's Kogbe said, noting that bank loans can reach the low- to mid‑30% range. Currency volatility also matters. "As soon as the naira depreciates, the cost of solar energy goes up immediately."

Government policy has added another layer of uncertainty. Officials at the Rural Electrification Agency have spoken publicly about encouraging local assembly of solar components and reducing reliance on imported panels. Industry players say capacity remains limited.

"There's no Tier 1 Nigerian solar panel manufacturer as yet," Kogbe said. "The solar panel manufacturers in Nigeria probably have the capacity to meet maybe 5% of the demand."

For that reason, he argues that sweeping import bans would be counterproductive.

"Banning imports of solar energy will only raise the cost of solar energy, not bring it down," he said. "Banning might destroy the industry to a large extent as opposed to helping the local industry grow."

Godson Ikiebey, a sustainability and climate change specialist at PwC Nigeria, warns that recent changes in China could push prices higher.

"While the government has put a hold on import duties on solar panels and associated accessories … and tax incentives for solar production, we need to pay attention to what the removal by the Chinese government of its subsidies on solar panel production would mean to Nigeria in relation to cost," he told DW.

Ikiebey added that Nigeria's clean energy industrial policy is still evolving.

"I do not think the industrial policy as it relates to clean energy production is deliberate yet," he said. "There is no clear sustainable financing roadmap for solar energy production."

Back in Owerri, Ikesom says that solar has transformed how he works.

"It's over two years that I've been using solar actively," Ikesom told DW. "If I calculate properly, I know I have made back my capital, at least to some extent."

But he is clear about the barrier to entry. Ikesom says he is honest when other small studio owners ask about switching.

"The truth still remains that I would tell the person it is costly, but it is worth it," he said.

Nigeria's solar imports are rising, and the technology is increasingly visible on rooftops and in small businesses like Ikesom's studio.

Yet the transition remains uneven, shaped less by enthusiasm than by economics.

For many Nigerians, the question is whether it is affordable, and whether policy, financing and industrial capacity can align quickly enough to turn demand into access.

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Read original at Deutsche Welle

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