Nigeria has emerged as Africa’s largest small-scale solar market after attracting an estimated $2.4 billion in investment in 2025, driven by worsening electricity shortages, rising energy costs and growing demand for alternative power sources.
The development was contained in the latest Sub-Saharan Africa Clean Energy Market Outlook by BloombergNEF (BNEF), which reported that the region attracted $13.5 billion in renewable energy investment in 2025.
Although the figure represented a slight decline from the $13.8 billion recorded in 2024, it marked the third consecutive year that Sub-Saharan Africa secured more than $12 billion in clean energy investments.
BNEF said investment was increasingly shifting from large utility-scale renewable projects to decentralised solar systems serving households, businesses and commercial users, largely due to high financing costs and challenges associated with funding large-scale projects.
Solar remained the dominant renewable energy technology in the region, accounting for $10.9 billion, or more than four-fifths of total renewable energy investment in 2025.
The report said investment in small-scale solar more than doubled year-on-year, rising from $3.4 billion in 2024 to $8.5 billion in 2025, making it the fastest-growing renewable energy segment in Africa.
Nigeria topped the continent with $2.4 billion in small-scale solar investment, followed by South Africa with $1.5 billion and Kenya with $840 million.
BNEF noted that more than 99 per cent of Nigeria’s $2.4 billion renewable energy investment in 2025 went into small-scale solar projects, as high capital costs and a shortage of bankable off-takers continued to constrain utility-scale renewable energy deals.
The growth reflects the increasing dependence of Nigerian households and businesses on rooftop solar systems and battery storage to reduce reliance on the national grid and expensive diesel and petrol-powered generators.
The report also highlighted an ongoing shift in Nigeria from diesel generators towards solar-plus-storage solutions, describing the country as one of the fastest-growing distributed solar markets globally.
Nigeria currently has about 20GW of installed electricity capacity, with the figure projected to rise to 30GW by 2030. Renewables are expected to account for 30 per cent of total installed capacity by then.
BNEF further projected that Nigeria’s cumulative solar capacity could increase from 2.4GW in 2026 to 7.8GW by 2030, before reaching 16.2GW by 2035.
Despite the positive outlook, the report warned that high financing costs remain a major obstacle to Nigeria’s renewable energy transition. It noted that the country’s 27 per cent benchmark interest rate makes local-currency borrowing largely unsuitable for capital-intensive renewable projects, leaving developers heavily dependent on foreign investors and development finance institutions.
South Africa remained the continent’s largest renewable energy investment destination, attracting $20.4 billion between 2023 and 2025, while Nigeria ranked second with $5.4 billion. Kenya followed with $4.3 billion, ahead of Senegal, Namibia, Angola, the Democratic Republic of Congo and Tanzania.
BNEF said Nigeria’s renewable energy potential remained significant, given its population of about 250 million and substantial unmet electricity demand.
The report also noted that unreliable grid supply, rising electricity costs and increasing demand for backup power systems are driving the expansion of renewable energy across Sub-Saharan Africa.
It projected that Nigeria’s economy would grow by more than four per cent through 2028, supported largely by the services sector and oil and gas refining activities, including increased production from the Dangote Refinery.
However, the report observed that economic growth in Nigeria has a weaker relationship with electricity demand than in many other African countries because a significant portion of economic activity is already powered through off-grid electricity systems.
BNEF also highlighted the region’s growing role in global renewable energy supply chains, noting that Sub-Saharan Africa recorded the fastest year-on-year growth in Chinese solar imports between the first quarter of 2025 and the first quarter of 2026.
The region’s share of China’s global solar exports doubled from about five per cent in 2025 to 10 per cent by March 2026, reflecting rising demand for solar solutions amid persistent power supply challenges.
