By Charles Kumolu

Nigeria’s energy transition ambitions are bold and necessary. With over 85 million citizens still living without access to electricity and a growing national demand for clean, affordable power, the government has rightly prioritized solar energy as a cornerstone of its Energy Transition Plan (ETP). 

However, despite the lofty targets and significant solar potential, a key group of stakeholders—local manufacturers—remain shackled by policies that inadvertently stifle the very progress the country seeks.

A central contradiction lies in the treatment of raw materials used for solar panel manufacturing. 

While fully assembled solar panels can be imported duty-free, the critical components needed for local production are still subject to import duties and levies. This policy asymmetry undermines the country’s localization goals, discourages investment in manufacturing, and places Nigeria’s energy future at the mercy of foreign supply chains.

For Nigeria to truly advance its energy transition goals, it must first unleash the potential of its local solar manufacturing sector—and that begins with removing import duties on essential raw materials.

Race against time

Nigeria’s Energy Transition Plan, launched in 2022, set a bold vision: achieve net-zero emissions by 2060 while lifting millions out of energy poverty. 

Solar energy is positioned as the linchpin of this transition, with ambitious targets for off-grid deployment and mini-grid development to reach rural and underserved populations.

But scaling solar deployment requires not just panels – it requires a thriving ecosystem of local suppliers, assemblers, and manufacturers who can respond quickly to market demand and innovate for local conditions.

 Unfortunately, these domestic players are currently operating in a high-cost environment, burdened by duties on imported materials such as photovoltaic cells, aluminium frames, tempered glass, and junction boxes – items essential for solar panel production.

Local companies like LPV Technologies are a case in point. As a pioneer in locally manufactured Solar Panels, LPV Technologies is working to close the energy access gap with locally produced solutions tailored to Nigerian needs. But like many in the industry, they face significant challenges due to current duty regimes. Despite their capacity to scale and generate jobs, high tariffs on raw materials place them at a competitive disadvantage against fully imported alternatives.

The result? Local manufacturers are priced out of the market, unable to compete with cheaper imported products, even though they represent a more sustainable long-term solution for energy security, job creation, and industrial growth.

Sustainability

Nigeria’s solar manufacturing base is largely driven by SMEs and large corporates, like LPV Technologies working under difficult conditions to create solutions for a country in desperate need of power. These businesses are already grappling with infrastructure deficits, high production costs, unreliable power supply, and limited access to financing.

Adding high import duties on raw materials to that list of challenges is akin to asking someone to compete in a race while dragging a weight behind them.

A duty-free regime for solar panel raw materials would offer critical relief to these businesses. It would lower production costs, make locally made panels more price-competitive, and allow for reinvestment into scale, innovation, and workforce development.

Without this support, solar manufacturing businesses may exit the market entirely, leaving the space open to imports and diminishing Nigeria’s capacity to build a sustainable, homegrown solar industry.

Reducing Dependence

A policy shift in favour of local manufacturers would also contribute to building a resilient and self-sufficient value chain. The global solar market is facing increased competition for materials, rising logistics costs, and disruptions in international trade. Nigeria cannot afford to remain heavily dependent on imported finished products for such a critical sector.

By empowering local manufacturers like LPV Technologies to produce solar panels at scale, Nigeria can reduce its vulnerability to external shocks and ensure that its energy transition remains on course – even when global supply chains falter.

Moreover, locally manufactured solar panels can be tailored to Nigerian environmental and usage conditions, durability in hot climates, adaptability for rural use, and modular designs for informal settlements—all features often overlooked by mass-produced imports.

Smarter classification

Understandably, the government faces a challenge: some of the materials used in solar panel production may also be used in other industries. A blanket exemption on these inputs may inadvertently open the door to misuse or revenue losses through improper classification.

However, this challenge is not insurmountable. With stronger verification mechanisms, better harmonized system (HS) code differentiation, and close collaboration with industry stakeholders, the government can ensure that exemptions apply strictly to raw materials used in solar panel manufacturing.

This targeted approach allows the state to support the solar panel industry without compromising its customs integrity or fiscal responsibility. Many countries have implemented such systems with success—Nigeria can do the same.

The key is to strike a balance between control and enablement. Policies must protect revenue and prevent abuse, but they must also empower legitimate players who are aligned with national priorities.

Technical skills

Nigeria’s demographic realities present both a challenge and an opportunity. With a median age of 18 and millions entering the labour force annually, job creation is an existential priority. The solar panel manufacturing sector, particularly, holds tremendous potential for employment.

A vibrant solar panel manufacturing industry will not only create direct jobs in factories, but also indirect opportunities in logistics, installation, maintenance, and distribution. It will also drive the development of technical skills and vocational training in green energy—a critical growth sector in the global economy.

Local companies like LPV Technologies are well-positioned to absorb and train this emerging workforce. By removing the import duty bottleneck, Nigeria can unlock this multiplier effect and begin building a workforce that powers both its energy transition and its economic revival.

Policy alignment 

Nigeria has no shortage of solar potential. From the sun-drenched Sahel to the power-starved communities of the South-East, solar energy offers a path to progress. What’s missing is policy coherence.

It is not enough to set ambitious energy targets if the policies on the ground make it harder for local manufacturers to contribute. 

Duty-free imports of finished panels may help in the short term, but they undercut the long-term goal of self-reliance and local value creation.

To support a truly sustainable transition, government policy must shift from being import-friendly to industry-friendly. That means enabling those who are building the future of energy—right here in Nigeria.

Powering the Future

The transition to clean energy is not just a global imperative—it is a national necessity. Nigeria’s energy future cannot depend solely on imports. It must be built from the ground up, powered by local businesses, local talent, and local innovation.

Removing import duties on solar panel raw materials is not a handout. It is a smart, strategic move to empower local industry, support MSMEs, create jobs, and achieve the nation’s clean energy ambitions.