More than 92 million Nigerians don’t have access to electricity, and most who do have access experience unreliable and intermittent electricity at best. As a result, millions of Nigerian households and businesses supplement their precarious access to power with alternative sources including expensive, loud, and environmentally polluting gasoline or diesel generators. This not only increases the cost of doing business in the country, but it also significantly decreases the quality of life of the average citizen. From schools and hospitals to homes and factories, the lack of access to electricity poses a significant challenge to growth and progress.
For decades, Nigeria has invested billions of dollars in improving access to power. Yet much of the country remains dark. There is, however, significant potential to firmly integrate solar power into Nigeria’s energy mix. So, why has Nigeria’s solar market not grown faster—and how can it be accelerated?
To answer these two questions, we have taken a different approach and have analyzed the sector through the lens of market creation. This lens reveals five primary barriers to adoption: 1) misunderstanding between infrastructure and innovation, 2) executing a push strategy, 3) designing modular business models instead of interdependent ones, 4) prioritizing discovery and democratization over distribution, and 5) intense competition from power generators.
This paper is divided into two main parts. The first section introduces theories and principles of market creation. We describe what market creation is, how it happens, and provide some examples of how markets have been created in Nigeria. By unpacking the process of market creation, we present a clear, realistic, and context-specific approach to innovation in the Nigerian context.
The second part of the paper will apply the principles of market creation to solar energy in Nigeria. Our hope is that stakeholders committed to the development of the solar energy market in Nigeria can apply these principles and accelerate the adoption of solar innovation across the country.
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