Nigeria's energy sector is undergoing a significant transformation, driven by a surge in demand for solar energy and a renewed focus on local production. Several key developments are shaping this landscape, including substantial investments in solar startups, government policies aimed at boosting domestic manufacturing, and collaborative efforts to expand renewable energy access across the country.

Anergy, a Nigerian clean tech startup backed by Bill Gates, is at the forefront of this shift. The company recently secured $15 million in Series B funding, adding to the $3 million it raised previously, bringing its total investment to $18 million. This funding is earmarked for expanding its lease-to-own solar systems, which allow customers to pay in installments over five to ten years, making clean energy more accessible and affordable. According to Anergy’s CEO, Femi Adeyemo, the company initially positioned solar as an alternative for uninterrupted power, but now emphasizes the cost-saving benefits compared to traditional power sources like petrol, diesel, and grid electricity.

The demand for solar energy has surged in Nigeria following the government's removal of fuel subsidies, which led to a 500% increase in petrol prices. This has made power generators less attractive due to high fueling costs, creating an opportunity for Anergy to provide reliable solar alternatives. Anergy has seen significant growth, tripling its lease customer base between 2023 and 2024 and projecting a four to five-fold increase this year. Naira revenue has also surged, and is on track to quadruple sales by the end of 2025. However, the company faces challenges, including currency devaluation impacting dollar revenue and a new government policy banning the import of solar panels.

In response to the rising importation of solar panels, which amounts to almost N200 billion annually, the federal government is pushing for local manufacturing. The Managing Director/Chief Executive Officer of the Rural Electrification Agency (REA), Abba Aliyu, announced plans to manufacture solar panels locally. Lagos State is expected to lead this initiative, with an existing PV solar panel manufacturing assembly plant in Ikotun expanding its capacity from 10 to 100 megawatts, thanks to collaboration with REA. Additionally, there are plans to sign a joint development agreement with Green World for a $150 million lithium battery assembly plant in Lagos.

The Minister of Science and Technology, Uche Nnaji, has affirmed the government's commitment to supporting local solar panel production through the National Agency for Science and Engineering Infrastructure (NASENI). However, the REA has advised that the ban on solar panel imports be delayed until local production capacity can meet the demand. Despite this policy shift, stakeholders have expressed concerns about the ban, cautioning that it may pose operational challenges for businesses investing in solar energy solutions.

Lagos State is also taking proactive steps to enhance its renewable energy infrastructure. The Lagos State Government signed a Memorandum of Understanding (MoU) with the REA to expand solar power generation and distribution across the state. Governor Babajide Sanwo-Olu, represented by Deputy Governor Obafemi Hamzat, emphasized that this initiative aligns with the administration’s vision for a safer, greener, and more sustainable energy future. The partnership aims to reduce reliance on fossil fuels and tackle electricity challenges hindering economic growth in Lagos.

Sanwo-Olu highlighted the paradox of excess energy generation in private hands with minimal distribution across communities, noting that there are approximately 4.5 million generators in Lagos. The new initiative with REA seeks to bridge this gap by delivering structured, sustainable, and community-driven electrification systems. Commissioner for Energy and Mineral Resources, Biodun Ogunleye, reinforced the administration’s clean-energy vision, stating that the partnership with REA would mark a turning point in reducing dependence on fossil fuels, creating green jobs, and building an inclusive energy economy.

REA CEO Abubakar Ndiye pledged the agency’s readiness to deliver a lasting impact, revealing ongoing efforts to localize the production of renewable energy equipment, positioning Lagos as a key manufacturing and innovation hub. The MoU between Lagos State and REA aims to accelerate decentralised solar projects in rural areas.

These efforts are crucial, considering the high costs and environmental impact of relying on fossil fuels. A recent report by Sustainable Energy for All (SEforALL) revealed that Nigerians spend an estimated $10 billion (N7.6 trillion) annually on fuel and generator maintenance. The cost of electricity from petrol generators is 83 per cent higher than grid-supplied electricity, presenting a major economic constraint. Lagos emits 39 million tonnes of carbon dioxide equivalent (tCO2e) annually, underscoring the urgent need for a transition to cleaner energy sources.

Overall, Nigeria's energy sector is at a pivotal moment, with significant investments in solar energy, a push for local manufacturing, and collaborative efforts to expand renewable energy access. These initiatives are essential for addressing the country's energy challenges, reducing reliance on fossil fuels, and fostering sustainable economic growth.