Market News

LAGOS, Nigeria — Six days a week, merchants and customers pack the narrow streets of Lagos’ Alaba International Market. Cars, motorbikes and handcarts move goods through West Africa’s largest electronics bazaar.

Generators, televisions and refrigerators have long filled the shop fronts. Now, solar panels, inverters and lithium batteries compete for space. Brands like Deye and Felicity Solar are everywhere, alongside counterfeits in copycat packaging with names like Fidelity or Facility.

“Even tomato sellers have put signs up saying they collect solar batteries and all kinds of solar waste,” said Nnamdi Nkemka, the broad-shouldered owner of CNN Global Solar. When his shop opened in 2008, it was one of a handful of specialized dealers, down an alley in the belly of the market. Now, it’s among more than 200 solar shops and sits right on the main street, and has an adjoining warehouse.

“Most people selling electrical items are migrating to solar,” he said.

The grid serving Africa’s most populous nation is so weak that in order to keep the lights on and appliances running, most Nigerians produce power at home. Domestic generators powered by gasoline and diesel have for years been the go-to option. But solar equipment is gaining ground.

By the end of last year, small-scale solar power in Nigeria comfortably exceeded what the grid delivers. This year, the country has already added as much capacity as it did in 2024 and 2025 combined. High fossil-fuel prices and affordable, Chinese-made, solar technologies are accelerating the shift away from generators, driving consumers toward renewable energy whether they care about climate change or not.

Solar panels, batteries that store their energy, and inverters that make the power usable, are turning up on wedding registries, alongside bed linen and microwaves. In a country where crude oil has long shaped the economy, families are growing used to monitoring how much solar energy their panels generate — and battery-charge levels. In rural areas, solar mini-grids that power whole communities, not just single homes, are starting to emerge.

But even as booming demand transforms wealthier households and changes public spaces like Alaba, high upfront costs are limiting growth, said Cletus Ike Amakeze, chief executive officer of Ama Solar Ltd., who has been selling solar products for a decade.

The equipment needed to keep a three-person home running will pay for itself in as little as 16 months, BloombergNEF research shows — but, at $4,500, getting set up costs about seven times as much as buying a new gasoline generator. (It’s the generator’s fueling costs that bite, at roughly $200 a month.)

Outside a bank in the upscale Oniru neighborhood, a massive billboard advertises loans for home solar technology. Most Nigerian lenders offer similar loans. At borrowing rates of about 27% to 36%, though, they’re out of reach for most households. The bulk of the roughly $8.5 billion spent on small-scale solar across sub-Saharan Africa last year was paid upfront in cash, according to Nelson Nsitem, a BNEF Africa analyst based in London.

Still, what solar lacks in finance, it offers in flexibility. “You can always build with solar and scale up,” said Lande Abudu, an independent energy consultant based in Abuja, Nigeria’s capital city. Buyers can add capacity according to their means.

Solar has become “the obvious choice” for consumers, said Nsitem. “As the U.S.-Iran war pushed up global fuel prices, the cost of operating these generators has risen, making solar systems much more attractive overnight.”

‘People are creating’

On a Tuesday morning, Amakeze’s shop in Alaba is bustling. A dapper retailer in a black button-down shirt and dress shoes is picking out stock to take to Asaba, in Nigeria’s oil heartland. A mother wants a package to cover the basics her university-age daughter needs to study: light bulbs and a fan. She may add a TV later.

Olojo Drive, the market’s central corridor, still hosts a few generator shops, but most are now further inside, with solar tech dominating the main drag. Even well-known generator brands such as Sumec Firman, Mikano and Jubaili Bros Nigeria have expanded into solar, hedging their technology bets. Households that use solar often still need alternative power, if the capacity they’ve installed is lower than the load they plan to use — air conditioners are among the biggest energy gulpers. Some buy hybrid inverters that allow them to toggle between solar, a generator and the grid.

That flexibility is reducing reliance on the grid, which in 2024 tripled tariffs for high-usage households to shore up the power sector’s finances. Many experts expect distribution companies to lose revenue as more of these customers shift away. But the grid defection threat solar poses in some countries hasn’t yet hit Nigeria. Residential customers account for only about 20% of supply at Eko Electricity Distribution Co., one of two distributors serving Lagos, according to Kolapo Joseph, group managing director of majority shareholder Transgrid Enerco.

“People are creating all kinds of systems where you can switch in and out,” said Lanre Shasore, a senior advisor at Sustainable Energy for All, an organization that works to accelerate the energy transition in emerging markets and developing countries. More accessible finance may change things, she said, but for now at least some of those who can afford it are “fuel stacking” — holding on to their generators even as they buy into solar.

Nigeria’s relationship with fossil fuels is a deep one. Crude oil exports account for more than two-thirds of the country’s export earnings, but until recently, the country had virtually no refining capacity. The government had to import refined fuel and kept pump prices artificially low through subsidies, which came to be seen as one of the few tangible benefits Nigerians enjoyed from their country’s oil riches.

When that subsidy was scrapped in May 2023, the price spike was immediate and sweeping. Lagos’ infamous gridlocked traffic thinned out, food inflation spurred cost-of-living protests and the cost of running generators soared. The following year, the Dangote Group launched its $20-billion mega-refinery, ending the fuel queues that had long plagued the country. Yet pump prices continued to rise, as the conflict in the Middle East tightened global supply.

Energy poverty

Solar costs, meanwhile, have moved in the opposite direction. The Chinese government earmarked solar and battery manufacturing as a strategic emerging industry in 2010, funding rural electrification at home and pushing companies to scale up production. As manufacturing costs fell, many solar companies went hunting abroad for buyers of their oversupply.

Among them was Guangzhou-based Felicity Solar. It was struggling to compete in China’s fierce price wars and sent Samuel Chen, who was then 24, to scout the promising but underserved Nigerian market. At the time, Nigerians were spending nearly $14 billion a year running generators, according to a 2016 analysis by the U.S.-based clean-energy organization RMI.

Chen spent his first months in Nigeria crisscrossing the country, from Abuja to Kogi and Lagos farther south, making more than 100 cold calls a day to potential distributors at a time when generators and fuel were still relatively cheap.

“During that period, I didn’t sell anything,” said Chen, who is now the chief executive of the company’s Nigerian unit. “To be honest, my salary was very low,” he added. “My Chinese friends kept talking about it and I kept quiet.”

Then Nigeria’s government scrapped the gasoline subsidy. Felicity’s solar sales jumped 250% in 2023 and have grown an average of 200% annually since.

Still, Felicity keeps its margins thin — as low as 3% some years, according to Chen — just enough to cover salaries and overhead. The business runs from a modest office in a low-cost residential area on Lagos’ mainland, which Chen visits several times a year.

Nigeria is very price-sensitive. Years of high inflation and sharp currency depreciation have eroded purchasing power, thinning the middle class and pushing millions more people into poverty. About 90 million Nigerians lack energy access — the highest level of energy poverty in the world.

Oluwaseun Aguda initially balked at the upfront cost of installing solar in his one-bedroom flat. Then he found that running his brand-new generator cost as much as 70,000 naira ($53) a week, even when he only switched it on in the evenings. He was already rationing its use in February this year, when the U.S.-Iran war broke out. Within days, gasoline prices had shot up by 40%.

“I looked at my future,” Aguda said. “There was no savings left.” By April, he’d borrowed cash from a friend to buy a three-kilowatt Felicity Solar system.

He has kept his generator for the one job his solar system can’t handle: pumping water, once a week, into storage drums, for a fraction of the amount he spent on fuel before switching to solar.

“I don’t struggle for power anymore,” he said. “That alone gives me peace of mind.”

Ibukun writes for Bloomberg.