In a bright, spacious factory on the outskirts of Lagos, young engineers in overalls work their way along the production line, carefully inspecting the shimmery blue solar cells that turn sunlight into electricity.
Quality checks completed, the finished solar panels are loaded onto forklifts and taken to a warehouse – ready for delivery to buyers across Nigeria and in neighbouring West African countries. Each panel is labelled “Made in Nigeria”.
But for Emmanuel Agbola, operations manager at Nigerian solar company LPV Technologies, the company’s mission goes beyond quality control and meeting customer orders.
“We are looking at addressing the immediate power needs of Nigeria,” Agbola told Climate Home News in a quiet room away from the steady hum of machinery on the factory floor, where production began last year.
That is no small task. About four out of 10 Nigerians – more than 85 million people – still lack reliable access to grid electricity, according to Nigeria’s Rural Electrification Agency.
LPV Technologies is among a handful of startups making headway on the nation’s bold ambitions to build a domestic solar panel manufacturing industry, as solar becomes the go-to choice for Nigerian businesses and households fed up with frequent blackouts.
Nigeria’s national grid has collapsed about 22 times during the last two years due to transmission constraints, gas shortages and ageing infrastructure.
That is exactly why local solar panel manufacturing matters, according to Agbola.
“One of our slogans is ‘Make the sun pay for your bills’,” he said.
Solar transforms life for homes and businesses
Nigeria has become one of Africa’s fastest-growing markets for increasingly affordable solar systems, which are providing more reliable and cheaper electricity for homes and workplaces than the fragile power grid.
Nigeria’s rapid solar adoption is being met mostly by small-scale solar installations which have helped bring the country’s total cumulative solar capacity to about 6 gigawatts (GW), according to a report by research provider BloombergNEF.
But almost every panel installed on homes, factories and public buildings across the country is imported – the vast majority from China – something the government wants to change.
“We are preparing to produce in this country the solar technologies that the entire continent will use,” President Bola Tinubu told a group of Chinese investors in 2024.
“Nigeria is a huge market for solar panels. Africa is a major consumer of solar technologies. I do not see why these panels and batteries cannot be produced here,” he said.
Two years on, that ambition is starting to bear fruit.
Not far from LPV’s factory, in the Agege neighbourhood of Lagos, workers are putting the finishing touches to a new commercial-scale veterinary vaccine cold-storage facility.
Up on the roof, 100 of LPV’s “Made in Nigeria” solar panels have been fixed into position.
Once operational, the panels and attached battery storage will provide round-the-clock electricity for offices, laboratories and cold-storage rooms at the site, helping to keep millions of vaccine doses safely refrigerated even when the national grid fails.
“This will never go off – all year round,” said the civil engineer overseeing work at the site, pointing to the rooftop installation. “It’s off-grid – 24 hours, seven days; constant electricity to run these two cooling units.”
Government bets on local manufacturing
The Nigerian government wants solar power to play a central role in bridging the country’s electricity access gap, but it also wants the equipment that will drive that transition to be produced at home to create new jobs and reduce imports. That aligns with its wider Nigeria First industry policy.
Nigeria’s booming solar market is still overwhelmingly supplied by foreign-made panels.
Last year, it imported about 2.9 million panels worth more than 400 billion naira ($295 million). More than 70% of them came from China, making Nigeria Africa’s second-largest importer of Chinese panels after South Africa.
China dominates almost every stage of the global solar manufacturing supply chain and a series of government-led initiatives to kickstart local production have yet to make major headway.
More than a decade ago, the National Agency for Science and Engineering Infrastructure established the country’s first government-backed solar panel factory in Karshi, Abuja. While successive upgrades have increased its production capacity to about 50 MW annually, the facility still supplies only a fraction of Nigeria’s growing demand.
The government has since announced more ambitious projects, including a Renewable Energy Industrial Park in Nasarawa state, expected to manufacture solar cells, panels and batteries, and a solar module assembly plant under construction by the Energy Commission of Nigeria in Enugu. Neither project has yet begun commercial production.
Last year, the government also proposed restricting solar panel imports to encourage domestic manufacturing, though the idea was swiftly dropped.
Chinese imports dominate solar panel trade
The scale of Nigeria’s challenge is obvious during a visit to Alaba International Market in Lagos, one of Africa’s largest electronics markets and a solar retail hub where thousands of panels change hands every week.
One recent morning in June, cart pushers could be seen weaving their way between crowds of shoppers and traffic jams, their trolleys stacked high with loads of freshly imported solar panels.
Nigeria is Africa’s biggest oil producer and fossil fuel exports have been the cornerstone of the economy for decades. But in the bustling market, solar has become such a good business in recent years that traders call it “the new oil“.
Even so, few said they had ever seen panels made in Nigeria.
“Every panel we get is imported,” said wholesaler Ndubuisi Nwobodo, adding that it was the first time he had heard of panels being produced domestically.
At one of the market’s largest solar warehouses, manager Chidiebere Ani watched as workers unloaded another container of supplies from China. He said 95% of the warehouse’s stock of panels came from China.
China controls more than 80% of global manufacturing capacity, according to the International Energy Agency, spanning every stage of the supply chain, from polysilicon and wafers to solar cells and finished modules.
Meanwhile, production at the LPV factory in Lagos is running at about 180,000 panels per year, Agbola said.
“If we had 10 LPVs, we still won’t be able to meet [Nigeria’s] demand,” Agbola said.
Even then, Nigerian producers face a tough contest on price. Imported 550-watt panels retail for about 150,000 naira ($110), the same price that LPV Technologies charges wholesalers.
Policy uncertainty seen as hurdle to investment
Nigeria has plentiful affordable labour and – with a population of roughly 240 million – room for market growth as the falling price of panels makes them accessible to more people.
Chinese firms increasingly see opportunities to build manufacturing partnerships with local businesses, said Susan Li, the founder of Chinese solar company Solar Run Energy.
“We have to grow the industry together,” she said, cautioning that foreign investment in the sector would hinge on stable government policies and a steady exchange rate.
Last year’s short-lived proposal to ban panel imports, which was scrapped a month after it was floated, highlighted such investment concerns, said Wangari Muchiri, founder of Kenya-based RE.Think Energy.
“[One minute] solar imports were banned, and then they were not banned,” Muchiri said.
“If investors come in and there is already a clear path such that everyone knows how tariffs and customs duties are handled, then businesses can plan for those costs,” she explained. “But when policies keep changing, the risk becomes much higher.”
Li said she believed that “as time goes by, [policies] will become more stable”.
Nigeria’s challenges to scale up production
While Nigeria is making its first panels, it does not yet have the industrial capacity to produce vital solar cell components such as polysilicon, wafers and ingots.
At LPV, Agbola said having to import the components – up to 17 of them – eats into the company’s profit margins.
“When we combine [the cost of importing components] with other fixed-cost elements and we want to do our pricing, it becomes a big challenge for us in the market,” he said.
Because cells are the main component in a solar panel, LPV’s senior brand and marketing manager Kabir Okehi said it would be “a huge relief” to produce them domestically and avoid the high shipping logistics costs associated with imports. It also takes imported solar cells between six weeks and two months to get to Nigeria.
Many of the materials used in solar manufacturing – including silica, aluminium and steel – are available in Nigeria, but the country still lacks the technical know-how to turn them into higher-value components, experts say.
“What is missing in our local production is knowledge transfer,” said Mustapha Abdullahi, director-general of the Energy Commission of Nigeria, a government body responsible for strategic national energy policy planning and coordination.
He said Nigeria is still learning about the technologies needed to make solar cells domestically, with research institutes experimenting with materials such as graphene and production methods that could eventually support upstream manufacturing.
“We’re still in the pilot stages, doing reverse engineering to see how things are done,” he told Climate Home News.
Companies struggle to access startup capital
Another major challenge for homegrown solar manufacturing is finance, Abdullahi said, adding that several Nigerian companies have expressed interest in manufacturing solar panels, but many struggle to secure the capital needed to establish production lines.
The government has tried to bridge that gap by connecting local companies with international financiers, while offering incentives to prospective investors, he said.
Last year, Nigeria announced a partnership with Chinese solar giant LONGi to establish a 1,000 MW manufacturing facility in the country. The agreement, Abdullahi said, is intended to accelerate technology transfer and help Nigeria expand domestic production far beyond its current assembly capacity of roughly 300 MW of solar panels annually.
That is equivalent to 545,000 panels – of about 550 watts each – per year.
Production will need to increase nearly ten-fold, Abdullahi estimated, to meet projected future demand.
As new investments and joint ventures start to yield results, that might be possible, he said.
“Nigeria can even be the solar panel hub globally, not just for Africa, and compete well even with China,” he added.
China as a partner, not a rival
But Nigeria should not be aiming to compete with China, rather learning from it as it seeks to build up its solar industry ecosystem – from assembling imported components to eventually making more of them locally, said Godson Ikiebey, a renewable energy specialist at PwC Nigeria.
China did not become the world’s solar manufacturing giant overnight, Ikiebey said. It developed a long-term industrial strategy, invested heavily in manufacturing capacity and steadily climbed the value chain.
“For now, it’s good to have the ambition, but the ambition does not yet match the action,” Ikiebey added.
China dominates global solar manufacturing not simply because it produces panels cheaply, RE.Think Energy’s CEO Muchiri said, but because it controls technology, supply chains and economies of scale built over decades.
Rather than trying to recreate that system from scratch, Nigeria should join forces with Chinese companies to accelerate technology transfer while developing its own workforce and manufacturing base, she said.
Building an African solar industry should also extend beyond Nigeria, with different countries potentially specialising in different parts of the value chain, fostering regional trade. “This is going to be a big opportunity to look at a regional expansion rather than just one country,” she added.
Bringing such plans to fruition will take time and the goals should be realistic, Chinese investor Li said.
Items such as frames and screws could eventually be produced in Nigeria, but more sophisticated components like solar cells would still need to be imported because their production requires highly automated factories and a stable electricity supply, she said.
“You grow step by step. If you look at the long term, if you grow the seed and water it today, you will get the harvest tomorrow,” Li said.
Clean energy jobs for the future workforce
When President Tinubu described his government’s solar hub plans to Chinese investors, he touted the country’s large, young workforce.
“The labour is cheaper. Our youths are vibrant and skilled. Our people are brilliant and adapt to new technology,” he said.
LPV’s factory in Lagos offers a glimpse of that vision.
A graduate in petroleum engineering, Ibeimo Biobele, 28, had no experience in solar manufacturing when she arrived at the factory a year ago as a member of the National Youth Service Corps – Nigeria’s mandatory one-year national service programme.
Like many university-leavers, Biobele faced an uncertain job market.
More than 93% of Nigerians work in the informal economy, according to the National Bureau of Statistics, meaning there are few skilled jobs for graduates like Biobele.
Today, she works on the production line assembling panels and hopes more such jobs will become available for young Nigerians in the years to come.
“If we had more factories like this, more young engineers would have opportunities after school,” she said.
This article was made possible with support from Surge Africa and One World Media.
Main image: A man carries a solar panel on his head while unloading a truck in Lagos, Nigeria (Photo: Mansur Ibrahim/Climate Home News)
