Today’s blog was contributed by Oyihoma Saleh from the Global Prosperity group.
In the first part of this series, I introduced eight factors that can help development funders evaluate opportunities with the greatest potential to transform nonconsumption into self-sustaining markets. This follow-up piece shows how those factors work in practice, and how using this rubric can help funders ground their decisions in the realities that enable new markets to thrive.
To make this more concrete, we’ll evaluate one opportunity through the lens of the framework: solar energy in Nigeria. With millions of people lacking reliable access to electricity, solar offers a textbook illustration of how this approach can help clarify where market creation is most promising and where real constraints remain.
A simple three step process
Applying the framework follows a simple three-step process: Observation, Interpretation, and Weighted Scoring, which is then repeated across each of the eight factors.
- Observation involves identifying and gathering evidence of real-world signals that reflect the conditions within an opportunity.
- Interpretation examines what these signals reveal about the opportunity’s readiness for market creation.
- Finally, weighted scoring synthesizes these insights into a relative sense of importance, clarifying which conditions are most influential in determining an opportunity’s potential for success.
Each factor contributes differently to the emergence of new markets. Foundational factors such as nonconsumption and intensity of struggle carry the most weight, while enabling conditions such as policy and investor appetite play supporting roles. To capture this relationship consistently we suggest applying the following set of recommended weights to reflect each factor’s relative importance.
Categorizing and weighing the factors
| Category | Factor | Weight (%) |
| Foundational Elements | Size of Nonconsumption | 15 |
| Intensity of Struggle | 15 | |
| Market Value | 15 | |
| Projected Tax Contribution | 15 | |
| Inclusive Growth | Job Creation | 12.5 |
| Ease of Upskilling | 12.5 | |
| Enabling Environment | Government Policy | 7.5 |
| Entrepreneur & Investor Appetite | 7.5 | |
| Total | 100% | |
Using this weighting, opportunities can be scored to generate a composite assessment. Each factor is rated on a 1–5 scale, reflecting the relative strength of evidence supporting it. The score for each factor is then divided by 5, multiplied by its assigned weight and scaled to a 10-point system.
Now, back to solar energy in Nigeria.
Case example: Assessing the opportunity for solar energy in Nigeria
- Size of nonconsumption (15%)
Observation: In Nigeria, 85 million people lack access to electricity all together, and many more face daily blackouts, resulting in the nonconsumption of power for over 200 million people.
Interpretation: Nigeria’s vast electricity shortfall reveals a massive pool of nonconsumers, indicating strong solar market-creation potential.
Score: 5 / 5 (Weighted: 5/5 x 15% x 10 = 1.5)
- Intensity of struggle (15%)
Observation: Nigeria produces only 1,750 kWh of electricity per person—less than half the global average—and the grid delivers just about 4 GW at any time. As a result, Nigerians pay heavily for alternatives: roughly 23% of GDP per capita to obtain 1,000 kWh of solar power, compared to 0.2% in the U.S. Businesses face the same strain. A World Bank survey of 980 MSMEs found electricity and fuel shortages among the top barriers across the agriculture, retail, and manufacturing sectors.
Interpretation: Nigeria’s severe and costly power shortages signal an acute struggle that would accelerate adoption of a viable solar alternative.
Score: 5 / 5 (Weighted: 5/5 x 15% x 10 = 1.5)
- Market value (15%)
Observation: If electricity production in Nigeria were raised to 3,000 kWh per capita (from its current 1,750 kWh per capita) with 50% of that growth met through solar, the market opportunity would reach over $54 billion.
Interpretation: Nigeria’s unmet electricity demand translates into a massive, multi-billion-dollar solar opportunity, signaling strong room for scale and long-term market sustainability.
Score: 5 / 5 (Weighted: 5/5 x 15% x 10 = 1.5)
- Projected tax contribution (15%)
Observation: Nigeria’s VAT and duty exemptions on solar equipment aren’t lost revenue, they’re strategic investments to grow the formal solar sector. Lowering upfront costs expands the number of registered firms, workers, and taxable activity. If the Stand-Alone Solar industry scales as projected, annual VAT and income tax revenues could reach about ₦6.8 billion by 2025, with an additional ₦4.5 billion in corporation tax and ₦2.3 billion in employee income taxes.
Interpretation: Nigeria’s tax incentives for solar are poised to pay off, as sector growth would expand the formal economy and generate meaningful, recurring VAT and income tax revenues.
Score: 4 / 5 (Weighted: 4/5 x 15% x 10 = 1.2)
- Number of jobs created (12.5%)
Observation: Our research estimates that an increase in electricity production to 3,000 kWh per capita, with 50% of growth met through solar, will create approximately 538,500 new jobs in the country.
Interpretation: The scale of job creation—over half a million roles—signals that solar can catalyze broad, economy-wide employment and inclusive prosperity.
Score: 5 / 5 (Weighted: 5/5 x 12.5% x 10 = 1.25)
- Ease of upskilling (12.5%)
Observation: Many solar jobs such as installation, sales, maintenance and distribution, require only 2 weeks to 6 months of vocational training. Programs like Solar Power Naija and private centers (e.g., Rubitec Solar, Blue Camel) already offer fast-track certifications. With these low entry barriers, workers can be upskilled quickly, making solar far easier to train for than specialized sectors like oil and gas.
Interpretation: Solar roles can be filled quickly through short, accessible training programs, lowering execution risk and enabling rapid workforce expansion.
Score: 4 / 5 (Weighted: 4/5 x 12.5% x 10 = 1)
- Government policy (7.5%)
Observation: Nigeria has made solar a priority through NREEEP and the Rural Electrification Agency’s Nigeria Electrification Project, which deploys $550 million from the World Bank and African Development Bank to expand off-grid access. Duty and VAT exemptions since 2019 have lowered costs and supported adoption. However, proposed 2025 import restrictions on solar panels, intended to promote local manufacturing, risk slowing the renewable-energy transition.
Interpretation: Government support for solar has been strong and well-funded, though proposed import restrictions introduce uncertainty that could slow near-term expansion.
Score: 4 / 5 (Weighted: 4/5 x 7.5% x 10 = 0.6)
- Entrepreneur and investor appetite (7.5%)
Notes: Nigeria’s solar sector is seeing strong entrepreneurial momentum, with local firms like Lumos and Arnergy alongside global players such as Bboxx and Husk Power. Between 2021 and 2022, the country attracted nearly 20% of all off-grid solar investment in Sub-Saharan Africa, including Daystar Power’s $38 million raise before its acquisition by Shell. More than 300 solar SMEs are now registered with REAN, and investor appetite is reinforced by blended-finance vehicles like the $75 million Nigeria Electrification Project fund backed by development finance institutions.
Interpretation: Nigeria’s solar market is attracting active entrepreneurs and steady investment, indicating solid private-sector readiness to grow the sector.
Score: 4 / 5 (Weighted: 4/5 x 7.5% x 10 = 0.6)
Taken together, the solar opportunity in Nigeria scores 9.15 out of 10, indicating exceptionally strong conditions for market creation. The scoring shows that the foundational elements—large nonconsumption, acute struggle, and sizable market value—are especially strong, and are reinforced by promising indicators of inclusive growth such as job creation and ease of upskilling. The main constraints emerge in the enabling environment, where policy uncertainty and a still-developing investor landscape temper an otherwise compelling case.
The purpose of this framework is not to reduce complex opportunities to a single score, but to help funders apply market creation thinking with greater discipline. By grounding decisions in the underlying conditions that enable new markets to emerge, funders can more confidently identify where their capital will be most catalytic. When used in this way, these eight factors serve as practical guardrails for judgment, helping direct resources toward opportunities that not only reach nonconsumers, but also help build the engines of broad based prosperity.
