Energy and climate experts have urged the Federal Government to deepen investments and introduce stronger policy incentives for large-scale solar installations nationwide, noting that such efforts could unlock an estimated $2.5 billion carbon market opportunity for the country.
In separate interviews with Nairametrics, experts emphasized that solar expansion remains the most viable route to reducing emissions, achieving the nation’s net-zero target by 2060, and positioning Nigeria as a major player in the fast-growing global carbon credit market, valued at over $100 billion annually.
They argue that widespread solar deployment would not only cut dependence on fossil fuels but also generate thousands of green jobs, improve rural electrification, and boost Nigeria’s participation in international carbon trading.
Solar energy as Nigeria’s entry point into the carbon economy
According to Dr. Sunday Okoro, an Abuja-based renewable energy consultant, solar energy represents Nigeria’s fastest route to monetizing emission reductions through international carbon trading mechanisms.
“Every ton of carbon dioxide avoided through solar generation can be quantified and traded as carbon credits,” Dr. Okoro explained.
“Nigeria stands to gain significantly if it mainstreams solar projects in residential, commercial, and industrial sectors,” he added.
He noted that an enabling policy environment comprising tax incentives for solar adopters, simplified licensing, and clear carbon credit certification rules would attract private investment and deepen Nigeria’s carbon market participation.
Similarly, the Managing Director of SolarTech Renewables Ltd, Mrs. Aisha Bulila, pointed out that Nigeria’s exceptional solar potential remains largely underutilized.
“We are sitting on one of the highest solar irradiation belts in the world, yet our installed capacity is less than 2% of national demand.
“If we scale up installations, we can drastically reduce reliance on diesel generators and qualify for significant carbon revenue,” she said.
Policy execution and the need for scale
Nigeria’s Energy Transition Plan (ETP) outlines a roadmap to achieve net-zero emissions by 2060, but experts say implementation remains slow, particularly in rural electrification and off-grid solar.
- Data from the Rural Electrification Agency (REA) indicates that the country needs at least 5 million off-grid solar systems to serve unpowered and underserved communities.
- Experts estimate that deploying just half of that target could generate millions of certified emission reductions (CERs) annually—each tradable for foreign exchange and investment inflows.
Mr. Ibrahim Danjuma, a policy analyst with the African Clean Energy Initiative, said Nigeria’s carbon market potential will remain underexploited until renewable energy projects are fully integrated into the national emissions accounting system.
“The voluntary carbon market can bring in billions if Nigeria quantifies its avoided emissions. But that requires data transparency, project validation, and robust monitoring systems. Solar expansion is the easiest entry point,” Danjuma said.
He noted that while the Nigeria Carbon Market Activation Plan, inaugurated in 2023 provides a framework for domestic carbon credit certification, implementation must now be backed by practical incentives and large-scale renewable projects to attract investors.
Carbon finance as a driver for renewable investment
Industry players agree that carbon finance could be the missing link between renewable viability and commercial scalability.
- According to Temidire Fajuyi, a clean energy investor, carbon finance could be the game-changer that makes solar not just environmentally viable but commercially irresistible.
- He added that this strengthens the business case, attracts foreign capital, and drives faster adoption.
- Experts further note that Nigeria’s renewable energy transition could yield multiple economic benefits spanning job creation, foreign exchange inflows, and energy security, while positioning the country as a regional hub for climate-smart investment.
“The global carbon market is expanding rapidly,” Dr. Okoro warned. “If Nigeria doesn’t accelerate its solar adoption and integrate emissions accounting, we risk missing out on a $2.5 billion opportunity.”
Addressing integrity and verification challenges
Despite its potential, experts caution that the credibility of Nigeria’s carbon market will depend on integrity and transparency.
The global carbon trade has faced scrutiny for “phantom credits” projects that claim emission reductions without a measurable impact.
Dr. Adaobi Eke, a climate finance consultant, emphasized the need for robust Measurement, Reporting, and Verification (MRV) systems to ensure that every carbon credit issued reflects real, quantifiable savings.
“The world is willing to pay for high-quality credits, but integrity is non-negotiable. Nigeria’s registry must meet international standards, or buyers will look elsewhere,” she said.
Dr. Eke recommended that Nigeria’s carbon registry adopt internationally recognized protocols such as Verra’s Verified Carbon Standard (VCS) and Gold Standard certification, both of which ensure high-integrity credit issuance.
FG’s regulatory push and investment momentum
The Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), has begun to acknowledge the growing commercial potential of solar adoption.
- NERC recently proposed a regulation that would allow solar power users to sell excess electricity back to the national grid, an initiative expected to improve investment returns and grid stability.
- According to NERC, Nigeria imported over 4 million solar panels in 2023, valued at about $200 million. By early 2025, solar panel imports reached N125.29 billion, reflecting a sharp increase in renewable adoption across rural and peri-urban areas.
- The regulator also confirmed that Nigeria added 63.5 megawatts (MW) of new solar capacity in 2024, bringing the country’s total installed solar capacity to 385.7 MW. While modest, analysts view this as a sign of rising momentum driven by both public and private sector participation.
Renewed political commitment to carbon markets
In a policy shift signaling stronger climate finance ambition, President Bola Tinubu recently approved the National Carbon Market Framework, operationalized the Climate Change Fund, and restored the National Council on Climate Change (NCCC) to the federal budget line.
According to Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications (Office of the Vice President), the framework aims to establish and manage Nigeria’s participation in carbon markets, unlocking between $2.5 billion and $3 billion annually over the next decade.
The move, announced ahead of the 2025 UN Climate Change Conference (COP30) in Brazil, aligns with the administration’s commitment to position Nigeria as a leading destination for carbon finance and clean energy investments in Africa.
Earlier in April, Tinubu confirmed that Nigeria’s Carbon Market Activation Policy would serve as the foundation for mobilizing up to $2.5 billion in high-integrity carbon credits by 2030. The plan also seeks to incentivize local renewable energy developers through simplified carbon registration and international credit trading access.
While Nigeria’s clean energy policies and frameworks are taking shape, experts insist that implementation speed will determine whether the country captures its carbon finance potential or lags behind regional competitors like Kenya and South Africa.
