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Solar Overseas PV Markets

Demand analysis of emerging PV markets: Nigeria of Africa

August 11, 2020 PV InfoLink


Country profile

Nigeria has an estimated population of 200 million. The country holds the largest oil reserves in Africa. As a member of the Organization of the Petroleum Exporting Countries, its economy is subject to volatility in international oil prices. In 2019, increased oil output allowed Nigeria’s GDP to grow to 2.2%, the highest in recent years. However, as the global crude oil market collapsed due to COVID-19 pandemic, Nigeria is widely predicted to sustain massive economic decline this year. Its economic prospects are deemed negative, as indicated by the B2 and B- ratings assigned by Moody’s and Fitch, respectively.

Nigeria has a tropical climate with dry and rainy seasons. It is wet most of the year in the south, where the rainy season spans from May to October with an annual rainfall of around 177 mm. The rainy season in the north lasts from June to September with an annual rainfall of only 50 mm. The temperature ranges from 20 to 38 °C in the north, which lies in close proximity to the Sahara Desert, and from 24 to 30 °C in coastal areas.

Geographically, Nigeria lies in west Africa and close to the equator and borders with the Gulf of Guinea in the south and Cameron in the east. The geography of the southern Nigeria is marked by low hills, whereas that of the northern Nigeria is characterized by highlands. Nigeria receives a daily solar radiation of 1,700 kWh/m2. 

Renewable energy development

Under the National Renewable Energy and Energy Efficiency Policy (NREEEP), which was introduced in 2014, Nigeria commits itself to sourcing 20% of electricity generation from renewables by 2030—with PV, wind power, geothermal, hydropower, and biomass all to be developed.

However, the lack of electricity system and poor transmission network, coupled with limited penetration of grids due to a widely dispersed population, make power shortage a persistent problem in Nigeria. Although the government launched the NREEEP in 2014 to ease the nationwide electricity shortage and went a step further by promoting private investment in power plants, both moves have fallen short.

Having said that, Nigeria continues to use every possible means to solve the lingering power shortage. It drew on a USD 550-million loan offered by the World Bank in December 2019 to support the construction of off-grid systems and the installation of small-scale off-grid PV systems, then a USD 200-million one granted by the African Development Bank Group in March 2020 to solve the limitations in the electricity supply of the grid network. 

Of the cumulative installed renewable capacity in Nigeria in 2019, hydropower accounted for as high as 98% of the total, whereas the other sources comprised the remaining 2%.

Share of installed renewable capacity by source in Nigeria in 2019

Solar policies and outcomes

After the launch of NREEEP in 2014, Nigeria started to see PV projects mushrooming in 2016, with foreign developers partnering with the Nigerian government through signing memoranda of understanding and power-purchase agreements (PPAs), and draw up construction proposals. Each PV project ranges 50 to 300 MW in size, totaling 1 GW.

Despite ambitious development plans for PV, Nigeria only posted 28 MW of cumulative installed capacity in 2019. Years of political turmoil, warfare, and rising tensions with neighboring countries might have hindered the development of PV, holding back utility-scale projects in particular. 

Cumulative installed PV capacity

The Nigerian government is in the midst of negotiating with investors with delayed projects whether to cut PPA payments. Whether this will have any impact on the development of PV projects remains to be seen. 

Nigeria has a large, widely dispersed rural population, but the sparse deployment of grid networks has led to a chronic power shortage in rural areas. The government is addressing electricity needs in rural Nigeria by implementing off-grid projects, which are a pillar of the official plan for PV development. Moreover, off-grid PV projects are smaller in size and less sophisticated on the technical front than utility-scale ones, and are therefore easier to install in Nigeria.

Nigeria-China trade: module import and export

Nigeria imported 75 to 140 MW of modules from China each year between 2017 and 2019, according to PV InfoLink’s customs database. A preponderance of these modules might have been used in off-grid projects, since utility-scale projects executed from 2016 to date are still under construction.

Once utility-scale projects totalling 1 GW make further progress in Nigeria, China’s module exports to the country will grow by leaps and bounds.

Exports of Chinese modules to Nigeria during 2017–2019


Nigeria is harnessing its abundance of natural resources to ease the chronic power shortage nationwide. Although it implemented a renewables development policy in 2014 with an aim of generating 20% of electricity from renewables by 2030, the policy is not working well and grid-connected renewable systems, with the majority in the form of hydropower, remain modest in number. 

And while Nigeria has issued tenders for utility-scale PV and independent-power-producer projects since 2016, these projects are pending grid connection, probably as a result of political turmoil. The government is in talks with investors whether to cut PPA payments—and it is unclear whether doing so will have any impact on PV development. Moreover, off-grid PV, which plays a large part in the official plan for PV development, is being used to reduce power shortage in rural Nigeria. Smaller and less technically sophisticated than utility-scale PV, off-grid PV is relatively easy to install in Nigeria.


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