Introduction: Overview of Solar Energy Grants in Nigeria
Navigating government incentives for solar street lighting in Nigeria can be complex. Multiple programs, agencies, and policy instruments are in play – from solar energy grants in Nigeria to subsidies, tax breaks, and public-private partnerships. This 2025 guide breaks down everything you need to know about government incentives for solar street lighting in Nigeria. You’ll learn about:
- Government policies driving the shift to solar public lighting.
- Current grants, subsidies, and programs (REA, NEP, REF, etc.) and how they support solar projects.
- Eligibility criteria and what profiles are best suited for these incentives.
Nigeria stands at an energy crossroads. With an estimated 85 million Nigerians lacking access to electricity, the need for innovative lighting solutions is urgent. Street lighting is not just a matter of visibility; it’s about security, economic activity, and quality of life after dark. Yet traditional streetlights powered by diesel generators or unstable grids are costly and inefficient, especially after the removal of fuel subsidies drove up diesel and power costs in 2023.
Nigerians spend roughly $14 billion annually on generators and diesel fuel, a burden that weighs heavily on government budgets and local economies alike. In this context, solar street lighting emerges as a smart, sustainable alternative that can illuminate communities while slashing operating costs.
The federal government has made renewable energy a pillar of its development agenda, with President Bola Tinubu’s administration incorporating it into the Renewed Hope strategy for economic growth. Even the Energy Commission’s Director-General has envisioned Nigeria’s major roads being illuminated by solar-powered LED lights in the near future.
This vision is backed by concrete commitments: Nigeria pledged to achieve net-zero emissions by 2060, and plans to increase renewable electricity supply to 23% of generation by 2025 (up from 13% in 2021).
Let’s shine a light on the incentives that can make your solar street lighting project a reality in Nigeria.
Government Policies Driving Solar Street Lighting in Nigeria
Understanding these policy drivers is key to appreciating why incentives exist and how to align your project with national priorities:
1.National Renewable Energy Targets
Nigeria has set ambitious targets under its energy policy and international commitments. The government intends to raise renewable electricity generation to 23% by 2025 and 36% by 2030. Achieving this means aggressively deploying solar solutions, including public lighting. At COP26, Nigeria pledged carbon neutrality by 2060, underscoring the long-term policy commitment to clean energy.
2.Economic and Security Imperatives
Frequent grid outages and high diesel costs have made traditional street lighting unsustainable. The removal of petrol subsidies in 2023 pushed more communities to seek alternatives. Solar streetlights, which operate independently of the grid, offer a cost-effective solution for lighting streets, highways, and rural villages without incurring monthly electricity bills. They also improve safety at night, which aligns with national security and rural development goals.
3.Renewable Energy Policy Frameworks
The National Renewable Energy and Energy Efficiency Policy (NREEEP) lays out incentives to spur clean energy adoption. For instance, it calls for “free custom duty for two years on the importation of equipment and materials used in renewable energy and energy efficiency projects,” along with tax holidays and low-interest financing. In practice, the government has enacted fiscal incentives like VAT exemptions on renewable energy equipment (under the 2020/2021 VAT Modification Order) to make solar technology more affordable. These policies reduce upfront costs for solar street lighting projects by eliminating import duties and taxes on components.
4.Local Manufacturing Push
A recent policy development is Nigeria’s plan to boost local manufacturing of solar panels and batteries. In early 2025, the government even proposed a ban on solar panel imports to stimulate domestic production. While this plan is debated, it reflects a drive to build a sustainable local supply chain for solar solutions. In March 2025, the Rural Electrification Agency (REA) signed an agreement to establish a 1.2 GW solar panel assembly plant, with another 1 GW plant in the pipeline. Over time, this could lower costs and ensure easier access to equipment for projects like Streetlights (as locally made panels become available). Decision-makers should note that in the short term, import restrictions could affect procurement strategies, but government support (such as waivers during the transition or incentives for local sourcing) may accompany this policy.
5.National and International Funding Initiatives
Nigeria is actively leveraging international support (World Bank, African Development Bank, etc.) for renewable energy. The country’s participation in programs like the AfDB’s “Desert to Power” initiative (with a $700 million commitment) aims to harness solar power in the northern regions. The government’s Energy Transition Plan and Economic Sustainability Plan also emphasize off-grid solar as a solution for rural electrification and job creation. These policies and plans create multiple channels of funding and technical assistance for solar projects, including public lighting.
Programs and Government Incentives for Solar Street Lighting in Nigeria
One of the key drivers behind the spread of government incentives for solar street lighting in Nigeria is the range of programs available. These incentives come in various forms. These can range from direct solar energy grants in Nigeria to budget allocations, tax breaks, and subsidized loans.
Below is a detailed breakdown of current solar energy grants in Nigeria, subsidies, and relevant programs that can financially support your solar street lighting project:
1.Rural Electrification Agency (REA) Initiatives
The REA is the federal agency at the forefront of off-grid electrification, and it plays a major role in funding and facilitating solar street lighting, especially in underserved areas. In 2023 alone, the REA installed more than 18,300 solar streetlights across Nigeria to illuminate communities, businesses, and even military barracks.
Funding for these projects often comes from the federal budget and international partners. For example, the Nigeria Electrification Project (NEP) – a World Bank and AfDB-funded program managed by REA provided $550 million in its first phase and secured an additional $750 million for new off-grid electrification projects starting 2024 . NEP offers Performance-Based Solar Energy Grants in Nigeria to mini-grid developers and Output-Based Grants (subsidies) to solar home system providers, indirectly supporting public lighting, as many communities mini-grid projects include streetlights as part of their deliverables.
Key takeaway: If your solar street lighting project is part of a broader mini-grid or rural electrification scheme, REA and NEP are critical avenues for support. Engaging with REA can help identify whether your target community can be included in ongoing programs or upcoming funding rounds.
2. Rural Electrification Fund (REF)
The REF is a fund administered by REA specifically designed to provide solar energy grants in Nigeria and subsidies for rural electrification projects. By law, REF can support projects proposed by both public and private entities. In fact, “REF provides capital subsidies to qualified rural electrification schemes developed by public and private sector entities focusing on mini grids, solar home systems, and grid extension.” This means a private solar developer, a state government, or a community cooperative could all potentially apply for REF grants if they have a viable solar street lighting project (often as part of a wider energy access project).
Key takeaway: To tap into REF, keep an eye on announcements from REA for any new funding calls. Applicants usually need to provide feasibility studies, implementation plans, and some cost-sharing. Successful proposals can receive substantial solar energy grants in Nigeria that offset the capital cost of solar streetlights.
3. Federal Government Budgetary Allocations
Apart from REA’s dedicated programs, solar street lighting is also being funded directly through federal ministries and agencies as part of capital projects. In 2024, the Nigerian government allocated over ₦22.7 billion to solar power projects, a significant portion of which was dedicated to solar streetlight installations across multiple states. For example, the Federal Ministry of Agriculture funded solar streetlights in rural Kebbi State (₦573 million paid in March 2024), and REA funded solar lighting in several markets in Lagos State (₦508 million disbursed in March 2024).
By April 2024, the Ministry of Agriculture also financed solar streetlights in Kano (over ₦712 million for installations in Gwarzo and Bagwai LGAs) . Further projects included solar lighting in flood-affected areas of Lagos and high-output solar streetlights in the Northeast, funded by the Ministry of Works and REA, respectively. In sum, substantial sums have been directed to solar streetlights in regions like Sokoto, Niger, Ogun, Kano, Bauchi, Ekiti, Kebbi, Ondo, and others.
Key takeaway: If you represent a local government or community, one way to access support is through federal constituency projects or ministry programs. If you are a contractor or supplier, these budgeted projects represent business opportunities and interested contractors are encouraged to engage with the REA and other agencies to contribute to these initiatives.
4. State and Local Government Programs
While this guide focuses on federal incentives, note that some state governments in Nigeria have their own solar programs or can leverage federal schemes. States like Lagos, Kaduna, Cross River, and others have procured solar streetlights to light up cities and rural areas as part of their budgets or via public-private partnerships. For instance, Lagos State’s Light Up Lagos initiative includes solar streetlights on major roads.
5. Tax Incentives for Renewable Energy Projects
To encourage investment in solar infrastructure, the Nigerian government provides tax incentives that can significantly improve the financial viability of solar street lighting projects for private sector participants. Key incentives include:
- Import Duty and VAT Exemptions: Renewable energy equipment enjoys special status in Nigeria’s tax code. Solar panels, batteries, inverters, and related components are exempt from import customs duties (for a specified period) and now exempt from the 7.5% VAT. Practically, this means when you import solar street lighting kits or components, you should not be paying VAT on them – a direct cost saving of 7.5%.
Bonus Read: How Nigerian Cities Are Saving 60% on Lighting Costs.
- Tax Holidays (Pioneer Status): Companies that invest in qualifying sectors, including renewable energy and solar manufacturing, can apply for Pioneer Status through the Nigerian Investment Promotion Commission (NIPC). If granted, this confers a tax holiday on corporate income tax for an initial 3 years, extendable up to 5 years. For a solar street lighting project, this might apply more if you’re manufacturing or assembling equipment locally, or if you set up a special project company for large-scale deployment.
- Capital Allowances and Depreciation: Even outside of pioneer status, capital investments in renewable energy equipment often qualify for accelerated depreciation or enhanced capital allowances under Nigeria’s tax laws.
- Financing Incentives: The government, often in collaboration with development banks, offers low-interest credit lines for renewable energy projects. For example, the Bank of Industry (BoI) and the Development Bank of Nigeria have had green energy financing schemes.
6. International Grants and Partnerships
Beyond the government incentives for solar street lighting in Nigeria, don’t overlook programs by international bodies that work in concert with Nigerian authorities. The World Bank, African Development Bank, USAID, EU, and others have initiatives supporting Nigeria’s renewable energy and rural electrification. For instance, some Nigerian municipalities have received grants for solar streetlights via the World Bank-assisted NEP or through climate finance programs.
Also, the UNDP, GIZ (Germany), and UKAID have in the past funded pilot solar street lighting projects in Nigerian villages and IDP (Internally Displaced Persons) camps. Keeping an ear out for these opportunities (often announced through REA or the Ministry of Power) can add another layer of support to your project.
Bonus read for project managers: How to Access Government Grants for Solar Streetlights in Southeast Asia?
Eligibility Criteria and Who Can Apply: Government Incentives for Solar Street Lighting in Nigeria
Here’s who typically qualifies and how to position yourself or your organization:
Federal, State, and Local Government Bodies
Government-to-government support is common. Federal programs (like those run by REA or ministry projects) often target local governments, state initiatives, or federal institutions.
Eligibility tip: Governments and their agencies usually qualify by default, but to access the incentive, they must identify needs, apply or lobby through the proper channels (e.g., submit requests to the Ministry of Power or REA, or include the project in budget proposals). If you are a state or local official, ensure you prepare documentation on the community impact and readiness of your solar streetlight project – this strengthens your case for inclusion in federal programs.
Private Renewable Energy Developers and Contractors
Many government incentives for solar street lighting in Nigeria are aimed at the private sector to encourage their participation in rural electrification. Private companies can directly apply for solar energy grants in Nigeria like REF. As noted, public and private entities are eligible for REF subsidies as long as they propose qualified projects.
Similarly, the Nigeria Electrification Project’s grants for mini-grids and solar home systems are accessed by private developers (who then roll out services to communities). Private contractors also benefit from the bidding opportunities when the government funds solar streetlight projects (the government pays the contractor to deliver the project).
Eligibility tip: If you’re a private company, you often need to be a registered entity in Nigeria with relevant experience. For REF or similar grants, expect to show past projects, technical capacity, and ability to operate and maintain the streetlights or associated power systems. Also, to claim tax incentives, ensure your company is properly registered with tax authorities and, if seeking pioneer status, with the NIPC.
Community Cooperatives or NGOs
In some cases, community-based organizations or NGOs can apply for programs (especially under REF or donor-funded initiatives) on behalf of their communities.
Eligibility tip: Communities should ideally be legally organized (e.g., as a cooperative or have a recognized development association) to sign agreements and receive funds. Showing community buy-in (like willingness to maintain the streetlights or contribute a token amount) can also help in qualifying for certain grants.
Educational and Health Institutions
Nigeria’s Energizing Education Programme (EEP) and similar schemes have targeted federal universities and teaching hospitals for solar power and streetlighting. If you are involved with a public institution, you could be eligible for specific programs. For example, under EEP Phase 1, several universities got solar hybrid plants with streetlights on campus funded by government and African Development Bank.
Who Doesn’t Qualify for Government Incentives for Solar Street Lighting in Nigeria?
It’s also important to note who generally cannot directly access these government incentives for solar street lighting in Nigeria. Individual homeowners or small businesses, for example, cannot directly apply for a government grant to put a solar streetlight on their property – these incentives are aimed at public or community lighting, not personal use.
Applicant Profiles & Preparation
Generally, the profile of a successful applicant (be it a company or community) includes having a clear plan for the solar street lighting project, demonstrating the capability to execute or at least maintain it, and aligning the project’s goals with government priorities (e.g., rural development, safety, innovation).
Read: Navigating Government Incentives for Solar Lighting in the Philippines.
Before applying for any incentive, prepare the necessary documentation. This may include:
- a project proposal or business plan,
- cost estimates,
- technical specifications of the solar street lighting systems,
- evidence of land or site availability (for larger installations),
- community or stakeholder support letters,
- and corporate documents if you’re a company (CAC registration, financial statements, etc.).
Each program will have specific requirements, but having these basics ready will put you ahead.
Do you want a step-by-step guide to help you apply for solar street light subsidies or solar energy grants in Nigeria? Read Part 2 of this guide to have a detailed breakdown of the process.
Conclusion
Transitioning to solar street lighting and securing government support can be daunting, but you don’t have to go alone. DEL Illumination Co., as a leading solar street light manufacturer and project partner, has extensive experience in Nigeria and across Africa helping clients bring these projects from idea to reality – while maximizing the incentives available.
Contact DEL Illumination Co. if you have any questions! Our team is available 24/7 to answer your inquiries about government incentives for solar street lighting in Nigeria.
