Economic possibilities through off-grid energy

In an era where Nigeria’s economic performance has largely underperformed, the off-grid renewable energy sector stands out as an example of hope, demonstrating what can happen when the right policies, regulations, and private sector leadership meet. Within challenges ranging from high inflation, a depreciating naira, youth unemployment, and very high electricity costs, this sector is quietly proving that with the right steps, Nigeria’s development trajectory can change.

“While challenges remain, ranging from foreign exchange constraints to insecurity in parts of the North that hinders deployment, the off-grid energy success story in Nigeria offers important lessons.”

Under President Muhammadu Buhari’s administration (2015–2023), one of the most transformative efforts came through continuity rather than reinvention. The administration built on the National Renewable Energy and Energy Efficiency Policy (NREEEP) developed during the Goodluck Jonathan era. This policy laid the foundation for the sustained development and deployment of renewable energy technologies, particularly solar, across both on-grid and off-grid applications.

Remarkably, the policy provided tariff waivers for solar components such as panels, batteries, and bulbs, while easing customs bottlenecks through priority port clearances. These provisions removed significant barriers to entry for investors and start-ups in the solar value chain, enabling local companies to scale.

One of the radical regulatory achievements came in 2016 when the Nigerian Electricity Regulatory Commission (NERC) introduced the Mini-Grid Regulation. It allowed operators to install mini-grids up to 1mw without licensing requirements, provided cost-reflective tariffs, and encouraged private ownership and community engagement. With this, over 100 new mini-grid projects sprang up across Nigeria, powering rural schools, health centres, and micro-enterprises. Communities once left behind by the national grid were suddenly brought into the economic fold.

According to the Rural Electrification Agency (REA), by early 2025, the mini-grid programme has connected over 1 million Nigerians to electricity for the first time. This figure includes thousands of micro, small, and medium-sized enterprises (MSMEs) whose productivity has doubled or tripled simply because they no longer rely on expensive diesel or kerosene for power.

Moreover, the Nigerian Electrification Project (NEP), executed by REA in collaboration with the World Bank and the African Development Bank, has taken the initiative further. NEP has funded solar hybrid mini-grids, stand-alone solar systems, and productive-use appliances across hundreds of off-grid communities. The project targets over 250,000 MSMEs and 1 million households, and it is making significant strides toward this goal. Over 1,000 sites have already been commissioned.

Of note is that this project is data-driven. REA’s Nigeria Off-grid Energy Access Mapping (NOEAM) platform, launched in 2023, offers real-time data on energy access, enabling developers and investors to make better-informed decisions. This level of transparency is rare in other sectors of Nigeria’s economy and should be encouraged.

Read also: All On, USADF renew $10m deal to expand off-grid energy in Nigeria

Another commendable initiative is the Solar Power Naija programme launched in 2020 under the Economic Sustainability Plan, which aims to install 5 million new off-grid solar connections. As of Q1’2025, REA reports that over 1.5 million solar home systems have been deployed, impacting more than 7 million Nigerians. The Central Bank of Nigeria’s Solar Connection Intervention Facility also helped provide low-interest financing to businesses along the solar value chain – manufacturers, assemblers, distributors, and service providers -stimulating job creation and local production.

These efforts have not gone unnoticed by the international investment community. Also of note, All On, a Shell-backed investment company, has invested in dozens of renewable energy start-ups across Nigeria. It has funded productive-use applications such as solar fridges, irrigation, and cold chains that directly enable food security and small-scale industrialisation in rural areas. All On’s portfolio includes companies like Arnergy, Lumos, and ColdHubs, each solving critical access and productivity issues.

Similarly important is the role of inclusive policy-making. The National Content Development for Power Sector Regulation has ensured that local players, not just foreign developers, benefit from sector growth. It mandates the use of Nigerian labour, materials, and service providers. Critically, the regulation includes gender inclusion, requiring minimum quotas for women’s participation in projects.

While challenges remain, ranging from foreign exchange constraints to insecurity in parts of the North that hinders deployment, the off-grid energy success story in Nigeria offers important lessons.

It underscores that continuity in policy matters. Success in the energy space did not emerge from sudden disruption but from building on a pre-existing framework. The Tinubu administration, which has now marked two years in office, would do well to preserve and enhance this policy trajectory.

Also, it confirms that public-private partnerships can work if driven by data, regulation, and result-oriented leadership. In contrast to Nigeria’s petroleum downstream sector, which is still mired in subsidy opacity and refinery delays, the off-grid space has shown what happens when the private sector is empowered and the government plays an enabling role.

Likewise, it reveals that Nigeria’s economic problems are not due to a lack of ideas, but a lack of consistent execution and political will. If what happened in the off-grid space could happen in agriculture, health care, or manufacturing, by enabling SMEs, removing bottlenecks, and providing easy capital, Nigeria’s economic future could change dramatically.

The question for this administration is this: Will it learn from the successes of the off-grid revolution and replicate them across other key sectors? Can we see similar regulatory clarity in housing, urban transportation, and agribusiness?

These questions are important as Aso Rock has decided to go off the National Grid to off-grid energy.

As of now, the off-grid energy space provides a working model for development, one where policy, capital, innovation, and governance come together to deliver real impact. It is proof that a functional Nigeria is not a dream, but a choice. A choice that must be made urgently, before the country’s mounting challenges outpace its potential.