Lagos — The renewable energy sector in Nigeria presents a wealth of growth opportunities. Nigeria plans to increase the share of renewable electricity generation to 23% in 2025 and 36% by 2030.
Under the Renewable Energy Master Plan (REMP), the country planned to increase the cumulative installed capacities of small hydropower, solar PV, biomass, and wind power to 2GW, 500MW, 400MW, and 40MW by 2025, respectively.
Against this backdrop, renewable power capacity in the country is expected to reach 1.7GW in 2035, registering a compound annual growth rate (CAGR) of 18.9% during 2024-35, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, “Nigeria Power Market Outlook to 2035, Update 2025 – Market Trends, Regulations, and Competitive Landscape,” reveals that annual power generation in Nigeria is expected to increase at a CAGR of 17.5% during 2024-35 to reach 1.8TWh. Within the renewable energy sector, solar PV technology stands out as a significant investment prospect. There has been a noticeable increase in solar PV capacity additions in the country over the past few years. A primary catalyst for this surge is the REMP.
Attaurrahman Ojindaram Saibasan, Senior Power Analyst at GlobalData, comments: “Nigeria relies heavily on thermal sources for its power generation. The nation possesses one of the largest natural gas reserves globally and the most extensive in Africa, which has led to the increasing prevalence of thermal power generation within the country.”
A significant challenge that power generators encounter is the absence of a guaranteed fuel supply, resulting in the underutilization of assets. Following privatization, there was a lack of infrastructure to foster an environment conducive to the effective execution of fuel supply agreements, which are essential for establishing bankable power purchase contracts.
To overcome this challenge, the country has placed focus on renewables, especially solar PV, to cater to a part of its electricity requirement. Nigeria, Africa’s most populous nation, is experiencing rapid urbanization, which is driving an increase in household electricity demand for lighting, cooking, refrigeration, cooling, entertainment, and various appliances. Power-intensive industries such as cement, food processing, and textiles are also significant consumers of electricity.
Due to the unreliable supply from the grid, many businesses resort to operating diesel or petrol generators, indicating that the actual energy demand is considerably higher than what grid consumption data suggest. Renewable power capacity with energy storage will help overcome this issue.
Saibasan adds: “The primary catalyst for the adoption of solar PV technology in Nigeria is the serious issue of energy poverty and the inconsistency of electricity supply. Consumers’ preference for solar PV arises from the demand for dependable power.”
Innovations in solar technology, coupled with novel financing models such as Pay-As-You-Go (PAYG), have propelled the growth of distributed solar power (DSP). These developments enhance the viability and scalability of solar initiatives, positioning them as compelling investment prospects.
Saibasan concludes: “DSPs in Nigeria possess considerable potential, bolstered by the nation’s rich solar resources and escalating energy requirements. The Rural Electrification Agency is actively executing an expansive strategy that incorporates both energy service company-led and utility-led models. This approach is designed to expedite the electrification process via grid expansion and the deployment of green mini grids.
“The primary focus is on electrifying market clusters, manufacturing centers, educational institutions—including schools and universities—and healthcare facilities, utilizing solar PV and hybrid solar PV-diesel systems.”
