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Africa’s solar power sector is set for substantial growth in 2025, with new installations projected to increase by 42%, according to the Global Solar Council. In 2024, the continent added 2,400 MW of capacity, though this was slightly below the previous year due to a slowdown in South Africa. However, delayed projects are expected to come online, pushing cumulative capacity to 23 GW by 2028. Despite growing energy demand – driven by power shortages and volatile fuel prices – high capital costs and financing constraints remain key barriers. Addressing these challenges could position Africa as one of the world's fastest-growing solar markets. (Bloomberg)
Why does this matter? The surge in solar power demand is set to benefit industries reliant on critical minerals, such as lithium, cobalt and copper – key components in solar panels and battery storage. Mining giants, including Rio Tinto, which operates in South Africa, could see increased demand for these resources. The solar boom brings a potential to drive job creation and economic growth in the region. Additionally, the social benefits of connecting more citizens to electric grid are substantial. In Sub Saharan Africa around 600 million people (53% of the region’s population) lack electricity access. Renewable energy presents a viable solution to improving energy access and supporting economic development.
The solar boom in Africa is regionally uneven. In 2024, South Africa (1,108 MW) and Egypt (700 MW) accounted for 75% of new capacity additions. However, smaller markets are emerging, with Ghana (94 MW), Burkina Faso (87 MW), Nigeria (73 MW) and Zambia (69 MW) showing significant year-on-year growth. North Africa tripled its new solar capacity in 2024, indicating a broader regional shift towards renewable energy diversification. This trend suggests that the continent's solar market is becoming more distributed rather than concentrated in a few dominant players.
Despite these gains, Africa still receives only 3% of global energy investment, even though it holds 60% of the world’s best solar resources. The weighted average cost of capital (WACC) in Africa is three to seven times higher than in developed economies, making projects more expensive and riskier for investors.
Although solar module prices have dropped from $0.27/W in 2022 to $0.09/W in 2024, other costs remain high due to currency instability, policy uncertainty and weak grid infrastructure. South Africa’s Eskom is deploying 500 MW in battery energy storage systems (BESS) to mitigate power outages, but continent-wide grid improvements are urgently needed.
Recent developments in global policy add uncertainty to Africa’s renewable energy equation. The Trump administration has terminated Power Africa, a decade-old US initiative that supported renewable energy projects across the continent. Established in 2013, the programme mobilised $29bn in financing, adding nearly 15,500 MW of generation capacity and benefitting 216 million people. The closure, part of sweeping cost-cutting measures at USAID, raises concerns about Africa’s energy future.
Conversely, Mission 300 – a new initiative has recently launched at a high-profile summit in Dar es Salaam. Spearheaded by the African Development Bank (AfDB) and World Bank, the project aims to provide electricity to 300 million Africans by 2030. The initiative has secured $58.2bn in funding, with half allocated to renewable projects and the rest supporting natural gas infrastructure. However, concerns persist over potential reliance on fossil fuels, high debt servicing and regulatory hurdles.
Africa’s energy system is at a pivotal moment. If Africa can attract investment and stabilise policy frameworks, it has the potential to become a global leader in solar power.