Africa Renewable Energy Market to Add Over 120 GW by 2031 as Solar Power Drives Growth in South Africa and Nigeria: IEA

The Africa renewable energy market is entering a period of accelerated expansion, with sub-Saharan Africa expected to add more than 120 gigawatts (GW) of renewable electricity capacity between 2026 and 2031, according to the International Energy Agency’s (IEA) Renewables 2026 report.

IEA’s Renewables 2026 report indicated that the growth will almost double Africa region’s existing installed renewable capacity, with solar photovoltaic (PV) technology accounting for more than 80 percent of new installations.

South Africa and Nigeria will lead the renewable energy market, contributing more than 40 percent of new capacity, followed by Kenya, Ethiopia and Angola.

The IEA has upgraded its renewable energy forecast for sub-Saharan Africa by 54 percent, or 33 GW, compared with its previous outlook. Rising demand for reliable electricity, declining solar equipment prices and the expansion of distributed generation are supporting market growth.

Sub-Saharan Africa is forecast to add more than 120 GW of renewable electricity capacity during 2026–2031, representing a significant acceleration compared with 2020–2025.

Solar PV will account for more than 80 percent of new renewable installations, equivalent to over 96 GW based on the regional forecast.

South Africa and Nigeria will contribute more than 40 percent of capacity additions, supported by government renewable energy programmes, private-sector investment and growing demand for distributed electricity generation.

Kenya, Ethiopia and Angola will also contribute to renewable capacity growth through solar, wind and hydropower projects.

Distributed solar PV will account for nearly two-thirds of all new solar capacity across sub-Saharan Africa during 2026–2031.

Residential rooftop systems, commercial and industrial solar installations, and off-grid electricity projects will drive this expansion.

Nigeria, South Africa and Kenya will lead distributed solar deployment, although smaller African markets are also expected to increase installations.

Consumers are investing in solar power because of unreliable electricity grids, high electricity tariffs, rising diesel generation costs and declining solar panel and battery prices.

The expansion is increasingly driven by household and business investment rather than exclusively by government electricity procurement.

South Africa will remain the leading utility-scale solar market in sub-Saharan Africa, accounting for 48 percent of regional utility-scale solar PV capacity additions through 2031.

The country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) will support solar development.

Corporate power purchase agreements and electricity wheeling arrangements through Eskom will also encourage private renewable energy investment.

Deregulation of private distributed electricity generation is supporting residential, commercial and industrial solar installations.

However, transmission bottlenecks and limited grid connection capacity continue to constrain the development of large renewable energy projects.

Nigeria will be one of Africa’s largest renewable energy growth markets during 2026–2031.

The removal of fuel subsidies has improved the economics of solar installations compared with diesel-powered electricity generation.

Mini-grid regulations and the introduction of net billing are also supporting distributed solar projects.

Solar electricity is becoming increasingly attractive to households and businesses seeking alternatives to unreliable grid supply.

Utility-scale renewable energy development will depend on improved financing conditions, electricity transmission investment and stronger electricity procurement frameworks.

Nigeria’s National Integrated Resource Plan provides a framework for future electricity capacity expansion.

Sub-Saharan Africa is forecast to install approximately 10 GW of new onshore wind capacity between 2026 and 2031.

South Africa will account for roughly half of the region’s wind capacity additions, supported by REIPPPP projects and corporate electricity procurement agreements.

Wind development will also continue in Senegal, Ethiopia and Kenya.

However, the market faces significant grid connection challenges, particularly in South Africa’s Eastern Cape and Western Cape provinces, where some of the country’s strongest wind resources are located.

Limited transmission capacity and dependence on development finance are restricting wind deployment outside South Africa.

Hydropower will remain an important component of Africa’s renewable electricity market despite solar PV becoming the dominant source of new capacity.

Sub-Saharan Africa is forecast to add approximately 9 GW of hydropower capacity during 2026–2031.

Angola and Ethiopia will account for 50 percent of the region’s new hydropower capacity.

Major projects include Angola’s Caculo-Cabaça hydropower station and Ethiopia’s Koysha hydroelectric project.

However, the IEA has reduced its regional hydropower forecast by 2 GW compared with its previous outlook.

The revision reflects the earlier commissioning of the Grand Ethiopian Renaissance Dam in September 2025 and delays affecting several large hydropower projects in Ethiopia and Nigeria.

The IEA has increased its sub-Saharan Africa renewable energy capacity forecast by 33 GW, or 54 percent, compared with its previous assessment.

The upward revision is primarily driven by distributed solar PV, whose forecast has been increased by 42 GW.

The improved outlook reflects faster consumer-led solar adoption and better accounting for distributed installations that were previously underestimated.

However, the utility-scale solar forecast has been reduced by nearly 7 GW due to electricity offtaker risks, financing constraints, and limited transmission infrastructure.

The hydropower forecast has also been lowered by 2 GW.

These revisions demonstrate that distributed solar is becoming the principal growth driver in Africa’s renewable electricity market.

Africa’s domestic solar manufacturing industry is beginning to expand, led by Nigeria.

Nigeria is expected to have approximately 500 megawatts (MW) of annual solar module assembly capacity in 2026.

The IEA forecasts that Nigeria’s annual solar module assembly capacity will exceed 1 GW by 2031.

Domestic manufacturing initiatives could support local solar equipment supply and industrial development.

However, the IEA expects these early-stage manufacturing investments to have a limited impact on Africa’s dependence on imported solar equipment during the forecast period.

Africa’s renewable energy expansion faces several structural barriers despite strong solar and wind resources.

Transmission bottlenecks and insufficient grid capacity are among the largest obstacles to utility-scale renewable projects in South Africa and Nigeria.

Weak electricity utility revenue collection, government offtaker risks and procurement uncertainty are affecting project financing.

Distributed solar developers also face limited access to local-currency financing, foreign exchange volatility and uncertainty surrounding equipment import policies.

In several African markets, the absence of clear regulatory frameworks for grid-connected battery storage is delaying renewable energy integration.

The IEA estimates that sub-Saharan Africa could achieve 46 percent higher renewable capacity additions than its main forecast if governments accelerate electricity grid investment, renewable procurement and financing reforms.

South Africa’s Transmission Development Plan and Independent Transmission Infrastructure Procurement Programme could help unlock additional solar and wind projects.

Nigeria could accelerate deployment through competitive utility-scale renewable procurement, clearer licensing regulations, improved electricity wheeling rules and stronger battery storage frameworks.

Expanded access to local-currency financing could also support faster distributed solar adoption across the region.

The accelerated scenario highlights the potential for significantly higher renewable energy investment if regulatory and infrastructure constraints are addressed.

The IEA’s latest forecast indicates that Africa’s renewable electricity market will increasingly depend on distributed solar PV, private-sector investment and electricity access initiatives.

South Africa and Nigeria will remain the largest growth markets, while Kenya, Ethiopia and Angola will provide additional opportunities for renewable energy developers.

Solar power will dominate new installations, supported by declining equipment costs and demand for alternatives to expensive or unreliable electricity supplies.

However, faster renewable energy deployment will require significant improvements in electricity transmission infrastructure, financing availability, procurement regulations and battery storage integration.

Africa’s renewable energy market has the potential to expand substantially beyond current forecasts if these constraints are addressed.