Energy reliability in Nigeria presents a striking picture of stark contrasts. On one hand, an enthusiastic and dynamic community of entrepreneurs and businesses is poised to innovate and expand the energy landscape; on the other, more than 92 million Nigerians are still grappling with the harsh reality of living without reliable electricity. As the nation sets its sights on achieving a net-zero emissions target by 2060, solar energy emerges as a promising beacon of hope. This clean and decentralised energy source not only holds the potential to transform lives but is also becoming increasingly accessible and affordable, paving the way for a brighter, more sustainable future.
However, solar energy’s potential won’t be realised by market demand or innovation alone. Regulation will shape its trajectory, either enabling scale or holding it back.
“Experts emphasised that such policies, without an enabling industrial framework, could reverse the gains made in the clean energy sector.”
The progress so far: Signals of commitment
In recent years, Nigeria has made commendable strides toward building a regulatory environment that supports clean energy adoption.
- The Electricity Act 2023
This Act breaks the monopoly of the national grid, allowing states to regulate their electricity markets. This decentralisation creates space for localised innovation and more agile renewable energy frameworks.
- National Integrated Electricity Policy & Strategic Implementation Plan (NIEP-SIP), 2024
The policy outlines Nigeria’s roadmap to achieving universal energy reliability with a strong emphasis on decentralisation and distributed renewables.
- VAT (Modification) Order, 2024
The Order exempts select clean energy items—such as electric vehicles, EV solar charging systems, and biogas equipment—from VAT. Although core off-grid solar components were not included, it signals the government’s intention to use fiscal policy as a tool to drive energy transition.
- The Climate Change Act, 2021
This Act establishes the National Council on Climate Change and requires a national carbon budget every five years, providing legal backing to Nigeria’s net-zero commitment.
A controversial detour: The proposed solar import ban
In early 2024, the Federal Government, through the National Agency for Science and Engineering Infrastructure (NASENI), proposed a ban on the importation of fully assembled solar panels. This move, aimed at promoting local manufacturing, was met with strong pushback from the Renewable Energy Association of Nigeria (REAN) and other stakeholders. Critics warned that Nigeria lacks the current manufacturing capacity to meet demand, and the ban could jeopardise ongoing projects and rural electrification efforts.
Following widespread backlash and media attention, the government paused the proposed ban. Experts emphasised that such policies, without an enabling industrial framework, could reverse the gains made in the clean energy sector.
But the gaps are still glaring
Despite progress, structural challenges continue to frustrate solar scale-up:
- Regulatory grey zones between federal and state agencies
- Weak enforcement of equipment standards
- Importation delays and FX volatility
- Financing bottlenecks for developers and end-users
Industry experts such as Arnergy’s CEO, Femi Adeyemo, stress that Nigeria’s grid alone cannot meet national electricity demand in the near term. Off-grid solar solutions are therefore essential and must be explicitly supported through coordinated policy measures.
What proactive regulation could look like
Proactive regulation means anticipating roadblocks and clearing them before they derail progress. This includes:
- Clarifying federal vs state regulatory boundaries
- Expanding tax and duty waivers for core solar components
- Strengthening enforcement of product standards
- Introducing risk-sharing mechanisms and blended finance instruments
- Promoting transparent data reporting and market planning
The states are the new powerhouses
Under the Electricity Act, state governments now have the legal authority to develop and regulate their electricity markets. States like Lagos, Ekiti, and Kaduna are already making moves. This presents real opportunities for solar companies such as Arnergy to engage subnationally, co-create regulations, and pilot scalable models tailored to local realities.
Conclusion: Aligning regulation with reality
Nigeria doesn’t need to start from scratch. The solar path is well-established globally, and Nigeria has already taken important steps forward. What’s needed now is regulation that is clear, consistent, and commercially attuned to the realities on the ground.
With the right policies, Nigeria can unlock solar at scale and deliver reliable, clean energy to households, schools, clinics, and businesses across the country. Companies like Arnergy, already working at the intersection of innovation and impact, stand ready to power this transition—one smart, scalable solution at a time.
Culled from Business Newspaper
