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					</table>Africa’s solar market has entered a new phase of scale and credibility, with the Africa Solar Industry Association (<a href="https://www.afsiasolar.com/" target="_blank" rel="noopener">AFSIA</a>) tracking more than 42,000 solar projects across the continent by the end of 2025, representing a total identified pipeline of 296 GW, of which 23.4 GW is already operational.
While only a fraction of this pipeline is currently operational, the scale signals long-term momentum.
For years, Africa was viewed as a marginal solar market accounting for less than 1% of global capacity, largely due to incomplete project tracking and weak official reporting. That perception has now been overturned. By incorporating new data sources, most notably Chinese photovoltaic module export data, the report sharply increases estimates of Africa’s installed solar capacity.
The data also highlights the pace of recent growth. Africa added around 14.8 GW of new solar capacity in 2025, compared to roughly 9.3 GW in 2023. Operational solar capacity reached 23.4 GW by the end of 2025, reflecting a 26% year-on-year increase.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-89324 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations.png" alt="Africa Solar annual installations" width="1516" height="806" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations.png 1516w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations-300x159.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations-768x408.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations-650x346.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations-624x332.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/01/Africa-Solar-annual-installations-600x319.png 600w" sizes="auto, (max-width: 1516px) 100vw, 1516px" /></a>
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Since 2021, Africa’s solar sector has grown at a compound annual growth rate of 49%, the highest of any global region. By comparison, global solar additions in 2025 were estimated at around 618 GW, within a range of 544 GW to 660 GW, underscoring Africa’s rapid expansion from a low base within a record-breaking global market.
Thirty-two African countries now generate more than 10% of their electricity from solar power, and 14 countries exceed 25% solar penetration in their electricity mix. Countries including Somalia, Chad, Tunisia, Tanzania, and the Democratic Republic of Congo recorded the fastest improvements in solar penetration rankings, reflecting both new capacity and structural reliance on solar generation.
Market Structure and Sectoral Shifts
The report segments Africa’s solar market into five core sectors: utility-scale solar, commercial and industrial (C&amp;I) solar, residential solar, mini-grids, and solar home systems with productive-use applications.
Utility-scale solar remains the most visible and fully documented segment, driven by national independent power producer programs, competitive auctions replacing feed-in tariffs, and growing integration with battery storage in grid-constrained systems. However, the report makes clear that utility-scale solar is no longer the fastest-growing segment on the continent.
A significant share of imported solar modules had previously been classified as “unidentified” due to the absence of centralized reporting. Based on installer and developer feedback across African markets, AFSIA now attributes approximately 85% of this unidentified capacity to C&amp;I systems and the remaining 15% to residential installations.
Growth in the C&amp;I segment is driven by high grid tariffs, frequent outages, diesel displacement, and the need for reliable power, particularly in manufacturing, mining, and commercial real estate.
Increasingly, these systems are deployed with battery storage to enable load shifting, backup power, and partial energy independence.
Residential solar continues to grow but remains smaller in scale compared to C&amp;I. Its expansion is closely linked to power reliability issues, the availability of net metering frameworks, declining system costs, and supportive import duty and value-added tax (VAT) regimes.
Mini-grids, largely government- or donor-led, remain well documented and play a strategic role in rural electrification, although their contribution in megawatt terms is limited.
Storage as a Structural Turning Point
Battery energy storage systems are identified as the defining technology trend for 2026. Utility-scale BESS costs declined to around $125/kWh by late 2025, while the levelized cost of storage fell to approximately $65/MWh.
These cost reductions have fundamentally changed project economics. Hybrid plus BESS projects in Africa are already delivering electricity at tariffs as low as $0.07/kWh, bringing dispatchable solar into direct competition with thermal generation.
Storage enables solar to provide grid services such as frequency regulation and reserve capacity, and allows near-baseload operation for mines, industrial facilities, island grids, and weak national systems.
As a result, standalone utility-scale solar without storage, while still expanding, faces rising curtailment risks and declining competitiveness in constrained grids.
Regional Patterns and Industrial Ambitions
North Africa, particularly Egypt, is positioning itself as a solar manufacturing and export hub, with integrated cell and module plants announced in 2025. East Africa leads in off-grid, C&amp;I, and productive-use solar, with Kenya emerging as a center for local technology manufacturing, refurbishment, and early deployment of solar-backed e-mobility infrastructure.
The southern region of , led by South Africa, remains the continent’s largest solar market and is entering a new phase characterized by wholesale electricity market reforms and large-scale BESS deployment, with several projects scheduled for commercial operation by late 2026.
West Africa is expanding utility-scale solar through national programs, while increasing solar penetration in electricity mixes in countries such as Benin and Chad. Despite growing interest from global manufacturers, most local manufacturing remains focused on module assembly rather than full vertical integration.
Capital Constraints and Policy Risks
The report is explicit that Africa’s solar challenge is not a lack of demand but resistance to capital deployment. Equity investors typically seek double-digit returns, while competitive tariffs depend on debt priced at single-digit interest rates with leverage levels of around 70% or higher.
Currency mismatch remains a critical risk, as cheaper USD- or EUR-denominated debt exposes projects to foreign-exchange volatility when power purchase agreements are denominated in local currencies. Local-currency debt reduces foreign exchange risk but remains limited and more expensive.
Policy consistency is another decisive factor, with stable frameworks for net metering, wheeling, competitive procurement, and predictable import duty and VAT regimes directly influencing market growth.
Persistent data gaps, grid absorption limits, financing scalability, and permitting delays continue to pose challenges. The report also raises the question of whether recent acceleration is structural or partially crisis-driven, noting that power shortages in countries such as South Africa have amplified demand.
Nevertheless, Africa Solar Outlook 2026 concludes that the continent’s solar sector has moved from the margins to a central role in the power sector, with future outcomes determined less by technology availability and more by financing speed, grid readiness, and policy stability.
In 2023, the Africa Solar Industry Association (AFSIA) <a href="https://www.mercomindia.com/africa-solar-capacity-grew-14-in-2022-to-nearly-1-gw" target="_blank" rel="noopener">reported</a> that Africa added 989 MW of solar capacity, a 14% year-over-year increase.

AFSIA Tracks 296 GW Solar Projects in Africa, with 23.4 GW Operational as of 2025

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					</table>Africa added 989 MW of solar capacity in 2022, a 14% growth year-over-over, a report published by the Africa Solar Industry Association (<a href="http://afsiasolar.com/" target="_blank" rel="noopener">AFSIA</a>) said.
It added that the continent&#8217;s total solar capacity stood at over 10 GW at the end of last year.
Historically, solar energy development in Africa has been concentrated in a few key countries, such as South Africa, Morocco, and Egypt.
However, last year saw 30 countries installing more than 1 MW of solar capacity, with 16 countries adding more than 10 MW capacity and two countries installing more than 100 MW.
Angola (284 MW), South Africa (111.8 MW), Egypt (80 MW), Ghana (71.3 MW), and Mozambique (41.9 MW) were the top countries for solar capacity additions in 2022. Angola commissioned the 188 MW Biópio solar project and the 96 MW Baía Farta solar project.
C&amp;I sector
Most installed capacity still comes from large-scale projects, but it&#8217;s noteworthy that the commercial and industrial sector (C&amp;I) now accounts for nearly 30% of all installations in the continent.
The C&amp;I sector has seen a 61.5% year-over-year growth, and with recent announcements of significant financing deals and mergers and acquisitions in the sector, this trend will likely continue.
The C&amp;I sector will be crucial in South Africa&#8217;s future energy mix. While C&amp;I projects represent only 4.8% of potential future capacity across Africa, more than 5 GW of C&amp;I projects are currently under development, representing almost 50% of the total installed capacity across the continent. Out of the projects under development, 3.4 GW is based in South Africa alone.
Mini-Grids
Data across the continent show that mini-grids had a difficult year in 2022, with an 18% decrease in installed capacity compared to the previous year, installing only 5 MW. This segment is still heavily dependent on grants and subsidies as it tries to find commercially viable solutions.
The number of countries where mini-grids have been active is relatively limited, with Nigeria leading with close to 1.5 MW of new capacity, followed by Mali, Uganda, Kenya, and Mozambique.
Small-scale solar
On the other hand, small-scale solar home systems (SHS) had a successful year, with an estimated 20.7% increase in installed capacity.
The data for the full year 2022 is not yet available. Still, the estimated 67 MW of SHS for the year is a significant increase from the previous year, driven primarily by the major SHS players in the continent.
However, there is still more work to be done to reach the performance of 2019 and 2020, which saw 80 and 91 MW of SHS brought to market, respectively.
Last October, research published in Nature Energy said the immense benefits of a high renewable energy share in the African energy mix are indisputable, but the objective can be <a href="https://mercomindia.com/african-clean-energy-debate-acknowledge-wise-diversity/" target="_blank" rel="noopener">met</a> only by adopting a country and context-specific strategy instead of treating the continent as a monolith.
In a report last year, International Renewable Energy Agency and African Development Bank said a <a href="https://mercomindia.com/transition-renewable-energy-answer-report/" target="_blank" rel="noopener">calibrated</a> policy framework centered on renewable energy could help resolve many of Africa&#8217;s social, economic, health, and environmental challenges.

Africa’s Solar Capacity Grew by 14% in 2022 to Nearly 1 GW

The Africa Solar Industry Association (<a href="http://afsiasolar.com/" target="_blank" rel="noopener">AFSIA</a>) has pointed out the growing popularity of solar in its &#8216;Annual Solar Outlook Report,&#8217; which gives an overview of how African countries are faring in their transition to solar power.
While there is no dearth of solar resources at their disposal, Africa is still lagging in adopting solar, but things are changing now, and the continent is looking ahead for a brighter future.
Large Scale Solar Projects 
According to the report, out of the 37 countries have installed more than 1 GW capacity. The &#8216;Gigawatt Club&#8217; has only two African countries (South Africa and Egypt) with more than 1 GW installed capacity.
But more African countries are moving toward solar. Egypt and South Africa are well on their way to adding more capacities soon. Based on government and private sector announcements, a group of nine more African nations may soon join the &#8216;Gigawatt Club.&#8217;
Algeria is showing great potential with 4 GW of solar projects in the pipeline. With new officials and institutions in place, the process will gain momentum, and the gas-rich country will soon move forward with big solar projects, noted the report.
Another nation moving swiftly in this direction is Morocco, which has put a more transparent and efficient process to develop 2 GW of new projects in the coming years. Other countries making the right moves to shift to solar are Zimbabwe, Zambia, Angola, Namibia, Botswana, and Ethiopia.
The report says that the private sector mostly drives the solar sector in Zimbabwe, and more and more industrial groups are planning large solar projects that will be for their consumption and addition to the grid. On the other hand, Ethiopia and Botswana have adopted a more traditional approach of international tenders and are reaping the benefit of this approach through low tariffs.
In Zambia and Angola, the situation is different. The governments have adopted a conservative approach and have awarded contracts directly to developers without going through the tendering process. Finally, an international initiative will see Namibia and Botswana develop 5 GW of solar power projects. A group of 12 other countries is expected to join them down the road.
Hydrogen a Gamechanger
The positive trend seen in the African countries might be further accelerated by two specific developments in the solar industry. One is the decline in storage costs, and the other is the game-changing potential of hydrogen.
The report points out that the grids in Africa are weak and have a limit as to the solar capacity they can absorb at any point across the national infrastructure (maximum 30MW). But by bundling solar and storage technologies, the limitation could be bypassed, and more solar capacity could be added and connected to the grid.
The second development is the growing adoption of hydrogen, which holds a lot of promise for a cleaner global future and &#8216;green hydrogen&#8217; is the most logical choice to make, as opposed to its &#8216;brown&#8217; and &#8216;blue&#8217; alternatives. Thanks to its excellent irradiation, Africa is ideally positioned to play a pivotal role in the global hydrogen market.
Growing Demand for Solar Home Systems 
The report states that millions of households have benefitted from solar home systems, with manufacturers offering a plethora of projects ranging from 5W to 1 kW to cater to a wide range of needs across the continent.
This has helped the medical facilities located in remote areas in the continent. The solar home system can provide the perfect solution both technically and commercially. Complete kits including lights, vaccine fridges, medical equipment, and communication devices, all functioning on DC power, can now be connected to a simple 300 W solar home system and cost less than $1,000. In comparison, an equivalent AC-based system would cost nearly three to five times more.
Growth of C&amp;I Segment
According to the report, there are more than 6,200 large-scale, commercial and industrial (C&amp;I) and mini-grid projects across the continent, of which 2,400 are already in operation. The popularity of C&amp;I projects in Africa is not a surprise, and as of now, the wide majority of the C&amp;I projects have been delivered on a CAPEX basis. This has limited the number of projects that have been built so far, as only a small percentage of companies possess the required cash to make such an investment.
African C&amp;I projects are considered attractive investment opportunities as they are based on B2B negotiations that can be conducted and successfully closed quickly.
The challenge with financed C&amp;I is to generate large enough portfolios of projects to attract investment partners. This is now growingly made possible thanks to the rise of C&amp;I development players such as Daystar Power, Starsight, DPA, and Total.
Mini-Grids Set to Grow  
The AFSIA report says that 2021 looks promising for mini-grid developers once the effects and limitations of the COVID-19 pandemic become more manageable.
The continent has seen many attempts by the governments to foster the growth of mini-grid projects in the continent. Among the notable efforts, Togo floated a tender for 317 mini-grids across the country, backed with West African Development Bank financing. Benin is also moving ahead with mini-grid projects, with nearly 119 mini-grids awarded to bidders, which are at different development stages.
Other countries are also moving in the same direction, with Senegal launching a tender for 133 mini-grids recently. The country aims to have 1,000 villages supplied with mini-grids across the nation. Cameroon also has plans for mini-grids to play an important part in the national electrification strategy with a target of 688 sites.
In December last year, the African Development Bank <a href="https://mercomindia.com/african-development-bank-energy-access/" target="_blank" rel="noopener">approved</a> a $20 million concessional investment from the Sustainable Energy Fund for Africa (SEFA) to establish the COVID-19 off-grid recovery platform. The platform would support energy access companies that commercialize and deploy solar home systems, green mini-grids, clean cooking, and other decentralized renewable energy solutions through these partners.
Earlier, the African Union Commission and the International Renewable Energy Agency had <a href="https://mercomindia.com/africa-renewables-response-covid-pandemic/" target="_blank" rel="noopener">agreed</a> to promote renewable energy across the African continent and bolster Africa&#8217;s response to the COVID-19 outbreak.

Africa on Track to Make the Transition to Solar Power: Report

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