Nigeria’s renewable drive threatened by China’s subsidy cut

China’s desire to stop tax rebates on solar panel exports and phase out incentives for making battery storage equipment could cause skyrocket cost of solar installations in Nigeria, Daily Trust can report. China’s new policy direction comes as Nigeria depends hugely on imported Chinese technology to grow its renewable energy and light up millions of […]

China’s desire to stop tax rebates on solar panel exports and phase out incentives for making battery storage equipment could cause skyrocket cost of solar installations in Nigeria, Daily Trust can report.

China’s new policy direction comes as Nigeria depends hugely on imported Chinese technology to grow its renewable energy and light up millions of underserved communities in the country.

In a recent joint statement between China’s finance ministry and the State Taxation Administration, the country said it will cancel value-added tax export rebates for photovoltaic products from April 1, 2026.

Besides, the ministry also said VAT export rebates for battery products will be cut to 6% from 9% between April and December and scrapped entirely from January 1, 2027.

According to the statement, consumption-tax rebate rules for these products will remain unchanged.

In another statement, the China Photovoltaic Industry Association, i said the move should help curb an excessive decline of export prices in the long run as China’s PV products face intensifying competition in overseas markets.

It noted that some Chinese exporters were using rebates as a price discount for foreign buyers.

It added: “Timely reduction or cancellation of export rebates for photovoltaic products can help promote a rational return of foreign market prices and reduce the risk of trade frictions.”

Observers fear that prices are expected to rise gradually on account of the removal of the export subsidy by China, especially now that Nigeria’s power supply faces a worrying decline paving way for increased dependence on solar energy as a veritable alternative source.

As Nigeria is currently witnessing expansion in renewable energy efforts, experts are also worried that the cut in export rebates by China may be an albatross as such a drive will add to the ballooning costs of  shipping, logistics, and import fees .

Reacting, Adetayo Adegbemile, executive director, Power-Up, emphasized that China’s policies are geared to benefit and offer advantage to their own businesses, discourage competition in the international markets for their products*

In a chat with Daily Trust, he said, “Everything is intertwined, and we need to seriously look at that consequences of such policy on our own market. There has been cries of local manufacturing of solar products as a way forward, and a number of factories are cropping up, what’s our own government doing to protect these factories and to also make them competitive with their Chinese partners?

“I personally led the advocacy of the Federal Government that led to the removal of VAT and 5% Import Duties on solar products, but it has also been difficult for the Renewable Energy stakeholders to implement universally, we should review this policy also to benefit local manufacturers.”

Kunle Stevenson, an energy expert, told Daily Trust that China’s decision to cancel the 9% VAT export rebate on photovoltaic (solar) products from 1 April 2026, while reducing the battery/storage rebate from 9% to 6% in 2026 and eliminating it entirely from January 2027 — is a significant supply-chain shift that Nigeria must treat as a strategic alert rather than a temporary price hike.

According to him, solar equipment and battery storage systems, which dominate Nigeria’s off-grid, mini-grid, and captive power solutions, will see landed costs rise by an estimated 5–15% (or more when combined with logistics and duties).

He added: “For Nigeria, it strengthens the urgent case for developing local solar assembly, component manufacturing, and eventually full value-chain capabilities. It should accelerate policy reviews on import duty rationalisation, targeted incentives for local investors in renewable manufacturing, and diversification of supply sources (India, Europe, Americas, or intra-African partnerships).

“In the broader power sector, this does not diminish the role of solar — it remains far cheaper than diesel for many applications — but it reinforces the need for a balanced energy mix.

“We must leverage our abundant gas resources for reliable baseload while aggressively pursuing renewables where they deliver the highest value. The net effect should be a push toward smarter, more self-reliant renewable deployment rather than panic.

“This policy change from Beijing is ultimately a wake-up call: Nigeria must move faster from being a consumer of green technology to a participant in its production.”

Also commenting, Chinedu Bosah, National Coordinator of the Coalition for Affordable and Regular Electricity (CARE), said the direct implication of China’s policy for Nigeria is that the prices for solar photovoltaic products will go higher and increasingly more unaffordable for many Nigeria.

He also said a complete setup of 5KVA is selling for between N4,000,000 and N4,500,000 and way beyond what most Nigerian workers can afford, let alone higher setups like 10KVA, 15KVA .

The situation is dire considering the recent collapse of power generation due to refusal of the gas company to supply gas to the power stations, he told Daily Trust.

He added: “We have witnessed an embarrassing situation wherein total generation nosedived to 2,900MW and to be rationed to over 200 million Nigerians. This has created a different degree of epileptic load-shedding and blackout across the country with its attendant negative implication for production, manufacturing, services, livelihood and well-being of the population.”

The Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yusuf, had recently cautioned against placing a ban on importation of solar panels into the nation.

He said Nigeria has one of the worst energy accesses with a per capita electricity consumption of about 160kWh, adding that the adoption of solar energy solutions would enhance energy security.

The proposed ban on the importation of solar panels would worsen the nation’s energy poverty, he said.