Nigeria’s Solar Boom Runs on Imports It Can’t Afford to Cut

Nigeria’s rapid expansion of solar power is helping millions of households and businesses cope with unreliable electricity, but the country faces a difficult choice: develop local manufacturing without disrupting the imports that currently keep the sector alive.

Solar power has emerged as a crucial lifeline in Nigeria, filling electricity gaps that the national grid and diesel generators have struggled to address.

Yet, despite the growing importance of renewable energy, most of the solar panels, batteries and related equipment used across the country are imported.

With roughly 87 million Nigerians lacking access to electricity, the country cannot afford a sudden disruption to the supply of solar equipment. At the same time, policymakers increasingly want Nigeria to move beyond being a major consumer of imported renewable-energy technologies and develop the capacity to manufacture, assemble and eventually export them.

“Nearly all solar panels and accessories are imported,” David Terungwa, executive director of the Global Initiative for Food Security and Environmental Protection (GIFSEP), told a gathering of government officials, financiers and researchers in Nigeria’s commercial capital.

Terungwa described Nigeria’s solar market as “an all-comers affair”, largely unregulated and heavily dependent on international supply chains that the country does not control.

The challenge for policymakers is therefore how to build domestic manufacturing capacity without undermining access to affordable electricity.

‘We Are Not Ready for a Solar Import Ban’

The government has increasingly promoted the idea of developing local manufacturing as part of Nigeria’s wider industrial and climate strategy.

Olamide Fagbuji, senior special assistant to President Bola Tinubu on climate technology and operations, said countries such as China, India and Vietnam had demonstrated the long-term economic benefits of manufacturing clean-energy technologies rather than simply importing them.

Nigeria, he argued, needs a “deliberate industrial policy” that would transform the country into “a producer, assembler and exporter of renewable energy technologies.”

The proposal comes against the backdrop of Nigeria’s history of using import restrictions to encourage domestic production.

Some players in the solar industry have advocated similar measures for renewable-energy equipment. Terungwa, however, believes such a policy would be premature.

“Are we ready for a solar ban now? No,” he said.

“Banning solar imports now would be like removing lifelines in a crisis.”

According to him, Nigeria must first establish sufficient local manufacturing and assembly capacity before considering restrictions that could limit access to imported equipment.

A premature ban, he warned, could increase energy poverty rather than reduce the country’s dependence on foreign products.

Instead, Terungwa called for incentives for domestic manufacturers, support for solar assembly plants and cheaper financing for clean-energy systems.

The objective, he said, should be to balance local manufacturing with energy access, rather than sacrificing one in pursuit of the other.

Early Signs of Local Production

There are already signs that Nigeria is beginning to build some domestic capacity.

Terungwa pointed to lithium battery plants recently commissioned in Zamfara and Nasarawa states, alongside early efforts by the National Agency for Science and Engineering Infrastructure to establish domestic solar-panel production.

These developments could eventually reduce the country’s reliance on imported equipment, create jobs and establish new industrial supply chains around renewable energy.

But analysts say Nigeria still has a long way to go before local manufacturing can satisfy the rapidly growing demand for solar equipment.

The scale of the investment required is considerable, particularly in areas such as advanced battery production, solar-cell manufacturing, power electronics and component supply.

Billions Flow Into Energy—But Mostly Oil and Gas

Nigeria’s broader energy investment pattern also highlights the challenge facing renewable energy.

Daniel Awolaja, co-founder of the Africa Energy Tracker, said Nigeria attracted nearly $100 billion in energy investment over the past decade, making it the second-largest recipient on the continent after South Africa.

The investment was spread across 422 tracked projects.

However, approximately 92 percent of the capital went into oil and gas, leaving renewables, grid infrastructure and energy storage to share the remaining investment.

The imbalance underscores the challenge of financing Nigeria’s energy transition while the country remains heavily dependent on hydrocarbons for government revenue, exports and foreign exchange.

More Power Generation, But Weak Grid Infrastructure

Nigeria’s problem is not simply a lack of electricity-generation capacity.

Awolaja said generation capacity increased by approximately 3 gigawatts in 2025, one of the strongest annual increases recorded anywhere in Africa.

However, investment in transmission and distribution has not kept pace.

As a result, additional generation capacity does not automatically translate into reliable electricity reaching homes and businesses.

Nigeria currently has about 14 gigawatts of installed generation capacity, according to Awolaja’s research, but only around 5 gigawatts reaches the national grid reliably.

This gap is one reason distributed solar systems have become increasingly important.

Rather than waiting for new transmission lines or additional grid capacity, households, businesses and communities can deploy solar systems directly at the point of consumption.

Solar as a Business, Not Charity

Awolaja credited All On, an impact investment firm, with helping to reshape Nigeria’s renewable-energy market by demonstrating that solar could be treated as a commercially viable business rather than simply a charity project or corporate social responsibility initiative.

That shift, he said, helped catalyse the country’s current solar industry.

Nigeria has also had an important regulatory foundation for distributed renewable energy for several years.

According to Awolaja, the country introduced mini-grid regulations and duty exemptions for imported solar equipment as far back as 2015, creating what was then one of the more comprehensive mini-grid frameworks in Africa.

Nigeria subsequently strengthened its climate-policy framework through legislation, although implementation has remained a major challenge.

Awolaja recalled an example involving a Nigerian energy expert who travelled to Brazil to study its mini-grid regulations.

According to him, the Nigerian framework was already more advanced in some respects than the system being developed by Brazilian officials at the time.

The irony, he said, was that Nigeria had created progressive rules on paper but had not fully implemented their potential at home.

States Take a Bigger Role

The country’s electricity market has also undergone a significant structural change under the Electricity Act 2023, which gave states greater authority to establish and regulate their own electricity markets.

Fagbuji said the new framework had helped unlock more than $1.3 billion in commitments for distributed renewable energy.

The investments are being channelled through programmes including the Nigeria Electrification Project and the Distributed Access through Renewable Energy Scale-up programme.

The growing role of states could accelerate renewable-energy deployment by allowing local governments to develop electricity solutions tailored to their specific needs.

For states with weak grid connections, distributed solar and mini-grids could provide an alternative route to expanding electricity access.

The Industrialisation Dilemma

Nigeria’s solar boom therefore presents policymakers with a difficult balancing act.

On one side is the urgent need to keep importing solar equipment to meet the country’s enormous electricity deficit.

On the other is the long-term economic opportunity to manufacture those products domestically, create jobs, develop technical expertise and reduce exposure to foreign supply chains.

The country cannot afford to sacrifice energy access while pursuing industrialisation.

But it also cannot remain permanently dependent on imported equipment if it wants renewable energy to become a major engine of industrial development.

The emerging consensus among industry stakeholders is that Nigeria should pursue a gradual transition.

Rather than immediately banning imports, policymakers could use targeted incentives, tax measures, concessional financing, local-content requirements and industrial infrastructure to make domestic production increasingly competitive.

As local manufacturing capacity grows, restrictions on selected imports could eventually become more realistic.

For now, however, imported solar equipment remains indispensable.

With millions of Nigerians still lacking reliable access to electricity, the immediate priority is keeping the lights on.

The longer-term challenge is ensuring that the technology powering those lights is increasingly made in Nigeria.

The country’s solar revolution may have started with imported panels and batteries, but its ultimate success could depend on whether Nigeria can turn that growing demand into a domestic manufacturing industry.