Green Economy

Rising Sun

New solar projects both large and small should help reduce dependence on oil and improve the quality of life in rural communities

Renewable technologies have become widely recognized as one of the sectors of the Nigerian economy with the most potential. Industry and government leaders see them as having the potential to solve several problems at once; by bringing inexpensive energy to new communities, green technologies can spur development and self-sufficiency while reducing emissions and creating new economic opportunities in regions that need it most. Solar projects on both large and small scales are at the centerpiece of these efforts, with additional hydro, biomass, and geothermal energy projects underway.

As of mid-2016, Nigeria had installed power generation capacity of 12,522MW, 85% of which was gas fired and 15% of which was hydro generated. This is well below the installed capacity of comparable countries; South Africa, for example, has installed capacity of 45,000MW for a population of less than one-third the size. Industry leaders have projected that more than 50,000MW are needed to fully meet Nigeria’s energy needs. The government’s larger plan is for renewable energy to become 30% of the nation’s total energy mix by 2030, and it has imposed new regulations aimed as strengthening the industry, introducing feed-in tariffs to incentivize renewables.


Solar energy occupies a unique place in the green economy because of its ability to be utilized via massive projects or via individual units for home generation. Nigeria has long struggled with energy shortages, especially in the more rural northern parts of the country, which have had to depend on fuel generators to meet supply. These same regions have the most solar potential; one World Bank analysis estimated that if 5% of central and northern Nigeria’s available land was used for solar thermal—technology that uses solar-heated salts to continue generating energy at night—it could generate 42,700MW of power. Nationwide, Nigeria averages more than six hours of sunshine a day, and analysts estimate that the total potential for all forms of solar power in country is over 400,000MW. The Nigerian government has begun to take the first steps toward bringing large-scale generation projects onto the grid, signing a series of deals to develop greenfield PV projects in the north and central regions of the country. In July 2016, the Nigerian government approved 14 different Power Purchase Agreements (PPAs) for solar projects, the first-such projects in the nation’s history. The deal comes to more than USD2.5 billion of investment, and includes projects ranging from 50 to 100MW in eight different states.

Small-scale projects are also underway, with industry participants optimistic that they could eventually provide a new level of reliable energy in rural homes. Providing access to such basic necessities as nighttime lighting and the energy needed to boil water would bring tremendous health and economic benefits to populations that have struggled to meet these basic needs. Recent years have seen the cost of rooftop-mounted solar systems drop significantly, and Nigeria has partnered with international organizations to help bring and install the technology in Nigerian villages. One Dutch start-up sells rooftop solar units for USD75 and takes payment via pre-paid mobile phone cards, allowing low-income customers to access the units without a bank account. If successful, these household units could replace much of the USD10 billion Nigerians spend every year on kerosene and diesel fuels for generators, reducing emissions and placing less pressure on Nigeria’s flagging oil industry.

While the solar industry has seen a number of promising steps taken in recent years, there are still several obstacles to overcome before it can begin to transform the Nigerian economy. Public awareness and understanding of the rooftop units is still low, and significant training and marketing efforts will be needed to take full advantage of these technologies. Wider structural issues of corruption and poor construction quality continue to plague government initiatives, affecting investor confidence.


Hydro, wind, and biomass make up the rest of the country’s renewable mix, and while not as significant as solar they all have their own advantages that will serve Nigeria well as it continues to build infrastructure. Wind potential is limited to coastal and northern regions, but a 10MW wind farm project is under construction in Katsina. Hydro, which already makes up 15% of Nigeria’s energy mix, is the most well-established of the three, and plans are underway to increase capacity by 5,690MW by 2020. Fiscal issues have impacted the construction of some major dams, but a series of smaller projects promises to bring improvements and the government is working on securing financing for several larger projects, including the 3,050MW Mambilla project. Biomass is the least developed of these three, but industry leaders see significant potential in its ability to make use of the 227,500 tons of daily waste produced by livestock.

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