China's Subsidy Cut Threatens Nigeria's Solar Energy Growth

China's Ministry of Finance announced a cancellation of value-added tax (VAT) export rebates on photovoltaic products effective April 1, 2026, and a reduction of battery storage rebates from 9% to 6% starting in April 2026, with a complete elimination by January 1, 2027. This policy change raises concerns for Nigeria, which heavily relies on Chinese technology for its renewable energy initiatives aimed at providing electricity to underserved communities.

Adetayo Adegbemil, Executive Director of Power, emphasized that this shift will significantly increase the costs of solar installations in Nigeria, potentially by 5-15% when factoring in logistics and import duties. Energy expert Kunl Stevenson highlighted the need for Nigeria to develop local solar manufacturing capabilities to mitigate the impact of these changes.

Chinedu Bosah, National Coordinator of the Coalition for Affordable Regular Electricity, noted that the rising costs of solar products could make them increasingly unaffordable for Nigerians, reinforcing the urgency for a balanced energy mix that leverages local resources.