EPILEPTIC ELECTRICITY SUPPLY: Nigeria is becoming Africa’s largest solar power market

More and more families and businesses in Nigeria are turning to solar power to meet their electricity supply needs making the country Africa’s largest small-scale solar power market attracting investments of $2.4 billion by 2025.

This comes as Sub-Saharan Africa’s renewable energy market attracted $13.5 billion in investment by 2025, marking the third consecutive year the region has secured more than $12 billion in green energy capital.

In its latest Sub-Saharan Africa Clean Energy Market Outlook, BloombergNEF (BNEF) said investment momentum in the region is driven by surging demand for distributed solar power systems, while high financing costs continue to limit utility-scale renewable energy projects in many countries, particularly Nigeria.

The report shows that while South Africa remains the dominant renewable energy destination on the continent, attracting $20.4 billion between 2023 and 2025, Nigeria ranks second with $5.4 billion, followed by Kenya with $4.3 billion, Senegal with $1.8 billion, Namibia with $1.2 billion, Angola with $993 million, the Democratic Republic of the Congo (DRC) with $874 million, and Tanzania with $776 million.

According to BNEF, despite a slight decline from the $13.8 billion invested in 2024, Sub-Saharan Africa continues to show resilience as investment shifts from large utility-backed projects to decentralized solar systems serving homes, businesses and commercial users.

Solar power remains the dominant technology in the region, accounting for $10.9 billion, or more than four-fifths of total renewable energy investment by 2025, he said.

“Solar power continues to be the technology of choice in Sub-Saharan Africa. Of the $13.5 billion invested by 2025, solar power accounts for $10.9 billion, a record annual solar investment in the region,” BNEF said.

The report attributed much of the growth to the rapid expansion of the small-scale solar market, where investment more than doubled in one year. It said small-scale solar investment increased from $3.4 billion in 2024 to $8.5 billion in 2025, making it the fastest growing renewable energy segment on the continent.

According to BNEF, “Small-scale solar investment is more than doubling year-on-year to $8.5 billion by 2025. The largest small-scale solar markets are Nigeria ($2.4 billion), South Africa ($1.5 billion) and Kenya ($840 million).”

The findings reinforce Nigeria’s position as the continent’s largest market for decentralized electricity solutions, with millions of households and businesses increasingly relying on rooftop solar and battery systems to cushion the impact of unreliable public electricity supplies and higher diesel and petrol prices.

BNEF observed that more than 99 percent of Nigeria’s $2.4 billion renewable energy investment by 2025 is directed at small-scale solar power plants, primarily because such projects are easier to finance than large-scale grid-connected power plants. The report states that “In Nigeria, the only other market with investments of more than $1 billion by 2025, more than 99 percent of the $2.4 billion invested was small-scale solar, as high capital costs and a lack of bankable buyers limited utility-scale deals.”

While utility-scale renewable energy investment across Sub-Saharan Africa remains large at $4.3 billion in 2025, it declined sharply from the $5.1 billion recorded the previous year as fewer large solar and wind projects reached financial completion.

However, corporate procurement of goods and services continues to be important as BNEF revealed that corporate-backed renewable energy investments will reach $10.5 billion from 2024, representing 94 percent of the renewable energy market in South Africa, while countries such as Zambia, Congo and Ghana are also seeing increasing private sector participation.

The report notes that South Africa continues to dominate renewable energy at utility scale due to its mature procurement framework, while Nigeria remains constrained by funding and policy constraints.

According to BNEF, Nigeria is undergoing a transition from diesel generators to solar power generation plus storage, placing the country as one of the fastest growing distributed solar markets globally.

The report said Nigeria currently has about 20GW of installed electricity capacity and estimates that figure will increase to 30GW by 2030, with renewable energy accounting for 30 percent of total installed capacity.

The report also projects rapid growth in cumulative solar power capacity in Nigeria, increasing from 2.4GW in 2026 to 7.8GW in 2030 before reaching 16.2GW in 2035.

BNEF stated that Nigeria’s long-term potential is still much higher, noting that the country is estimated to have a power grid of 50GW and accommodate about 250 million people, compared with Kenya’s projected 50GW power grid for a population of about 60 million, suggesting there is huge room for future expansion.

Despite the encouraging prospects, the report warns that Nigeria’s renewable energy transition continues to face major funding obstacles. According to BNEF, Nigeria’s benchmark interest rate of 27 percent makes local currency loans largely unsuitable for capital-intensive renewable energy projects, forcing developers to rely heavily on foreign investors and development finance institutions.

The report observes that high capital costs have created significant dependence on foreign project financing in much of Sub-Saharan Africa, although countries such as South Africa, Namibia and Senegal remain better positioned due to stronger domestic financial markets.

BNEF also links the growth of renewable energy to broader economic expansion across the continent. Nigeria’s economy is projected to grow by more than four percent in 2028, mainly supported by the services sector and oil and gas refining activities, including increased production from the Dangote Refinery.

However, the report notes that, unlike many countries in Africa, Nigeria’s economic growth has a weaker relationship with electricity demand because most economic activity is already powered by off-grid electricity systems.

In addition to investment flows, the report highlights the growing importance of Sub-Saharan Africa in the global renewable energy supply chain. The report notes that the region recorded the fastest year-on-year growth in China’s solar power imports between the first quarter of 2025 and the first quarter of 2026, with China’s share of global solar exports doubling from around five percent in 2025 to 10 percent in March 2026.

BNEF further attributed this surge to rising electricity prices, unreliable power grid supplies, and increasing demand for backup power systems across the continent.