Nigeria’s move to restrict the importation of solar panels, a policy aimed at promoting domestic manufacturing, risks exacerbating the country’s deep-rooted energy crisis. While import substitution may appear a viable route to industrial development, its application in this case is premature, poorly timed, and potentially self-defeating.
“In Nigeria, however, the middle class or the poor, two demographics that should be at the forefront of this transition, are being left behind.”
More than 90 million Nigerians, nearly half the population, lack access to reliable electricity. The national grid is chronically underpowered, plagued by transmission losses and an ageing infrastructure incapable of keeping pace with rising demand. In this context, the growth of solar energy, especially decentralised and off-grid solutions, has been one of the few bright spots. Small businesses and households have increasingly turned to solar systems as a cleaner, more reliable, and ultimately more affordable alternative to petrol and diesel generators.
A 2023 report by the International Renewable Energy Agency (IRENA) states that only about 5 percent of Nigerian households use solar energy as their primary power source, despite the country’s vast potential.
In other African countries, solar energy has emerged as a promising solution to address Africa’s energy deficiency. Evidence-based research shows a clear trend of increasing solar adoption across many African countries, particularly those with lower grid connectivity rates.
For example, Sierra Leone leads with 57 percent of households using solar as their main lighting source, despite only 17 percent grid connectivity; Mali shows 49 percent solar adoption, compared to 37 percent grid access; Uganda has 43 percent solar usage, significantly higher than its 28 percent grid connectivity, and so forth.
This trend is evident in many other countries, including Burkina Faso, Zimbabwe, and the Democratic Republic of Congo, where solar adoption rates are close to or exceed grid connectivity rates.
In Nigeria, however, the middle class or the poor, two demographics that should be at the forefront of this transition, are being left behind.
The proposed import ban, however, threatens to worsen Nigeria’s situation. Industry stakeholders warn that the price of solar systems could rise by as much as 150 percent if imports are curtailed without adequate local capacity to fill the gap. This would place solar systems beyond the reach of most Nigerians at a time when inflation, fuel price hikes and currency depreciation are already straining household incomes.
The government’s rationale is straightforward: to nurture a local solar manufacturing industry. But domestic capacity remains limited. Installed solar assembly capacity stands at roughly 131 MW, far short of the 1,531 MW the government hopes to achieve in the near term and minuscule compared to Nigeria’s estimated electricity demand of over 200,000 MW. Even under optimistic scenarios, local firms will be unable to meet demand for years to come.
The policy is also likely to distort the market. A handful of domestic assemblers, some with ties to entrenched interests in oil and gas, stand to benefit disproportionately. Without competitive pressure or clear quality benchmarks, consumers risk being left with costlier, potentially inferior products. Worse, a poorly regulated domestic monopoly could emerge, suppressing innovation and raising prices further.
There is also the broader message this sends to international investors. Nigeria’s renewable energy sector has attracted increasing interest from development finance institutions and private capital, thanks to its untapped potential and urgent demand. But policy inconsistency, especially abrupt shifts that favour narrow domestic interests, consequently risks undermining investor confidence. This is not the signal Nigeria should be sending at a time when global capital is increasingly oriented toward clean energy transitions.
There are alternatives. Rather than resorting to protectionism, the government should adopt a phased and pragmatic approach. It could maintain low or zero tariffs on high-efficiency solar imports in the short term while offering targeted incentives, such as tax relief or concessional financing, for local manufacturers. Partnerships with global technology leaders could accelerate knowledge transfer and improve quality standards. Skills development and supply chain investment should accompany any push to expand local production.
Most importantly, the policy framework must remain transparent and predictable. A blanket ban will only serve to undermine Nigeria’s energy access goals and climate commitments. What is needed is not isolation but integration of global expertise, local ambition, and sound industrial strategy.
Nigeria’s energy future hinges on aggressively scaling reliable, affordable, and clean power solutions, and solar energy undeniably stands as the nation’s most promising avenue to leapfrog decades of underinvestment and grid unreliability. However, this immense potential risks being squandered if policymakers prioritise short-sighted protectionist measures over a well-articulated long-term vision.
To truly harness the transformative power of solar, the government should instead focus on creating a stable and attractive investment climate through consistent policies and transparent regulations. This includes streamlining permitting processes, offering clear incentives for both local and international solar companies, and investing strategically in grid infrastructure to accommodate distributed renewable energy sources.
Furthermore, fostering collaborations between research institutions, local entrepreneurs, and global technology leaders will be crucial for driving innovation and ensuring the development of a skilled workforce within the solar sector.
By embracing a holistic strategy that prioritises quality, affordability, and technological advancement, Nigeria can pave the way for a sustainable energy future that empowers its citizens and fuels economic growth.
Source: businessday
