Africa sees drop in power costs as renewable energy scales up

Nairobi. Electricity is becoming more affordable in Africa as renewable energy scales up. From mini-grids to solar home systems, falling generation costs are translating into lower tariffs, especially in off-grid and rural areas.

More Africans are spending less on accessing electricity than before, largely thanks to the accelerating shift toward renewable energy.

According to experts, the cost of generating and distributing energy is falling, and this is gradually translating to more affordable tariffs, especially in off-grid and rural areas.

“What we’re seeing is the cumulative effect of years of investment in renewables and policy innovation across the world,” Abraham Masiyiwa, a researcher at the Power Energy Futures Lab explained in a call.

“From mini-grids to utility-scale solar, the continent is not just adopting clean energy it’s actively shaping how affordable electricity is delivered in low-income contexts,” he added.

A July 2025 report by the International Renewable Energy Agency (IRENA) has confirmed the trend, showing that 91 percent of new renewable energy projects globally are now cheaper than fossil fuel-based alternatives.

According to the IRENA report, in 2024, solar photovoltaics were, on average, 41 percent cheaper than the lowest-cost fossil fuel alternatives, while onshore wind was 53 percent cheaper. This price advantage is driven by innovation, stronger supply chains, and economies of scale.

This is a major development for the continent, where high energy costs have long excluded millions from the grid. As renewable technologies become more affordable and widespread, electricity is reaching more homes and businesses at a lower cost per unit than ever before.

In 2024, the global weighted average cost of new onshore wind power dropped to just $0.034 per kilowatt-hour, while solar PV reached $0.043 per kilowatt-hour. These prices undercut even the cheapest fossil fuel options and highlight why renewables are now considered the most cost-competitive form of new power globally.

Utility-scale solar PV installations in Africa have mirrored this trend, with average installed costs dropping by 68 percent over the last decade, from $3 437 per kilowatt in 2015 to $1 093 in 2024, according to IRENA.

Over the same period, Africa’s average solar electricity cost fell from $0.225 to just $0.074 per kilowatt-hour, approaching parity with global markets.

Africa is home to some of the world’s richest solar and wind resources. IRENA notes that regions like Africa, Asia, and South America have strong learning rates and untapped renewable potential, meaning costs could fall even further in the coming years.

Onshore wind projects across the continent have also seen their levelized costs of electricity decline by 34 percent since 2010, dropping to $0.051 per kilowatt-hour in 2024.

However, according to Masiyiwa, “financing, not equipment, is the largest cost component,” reflecting the persistent capital-market challenges facing African developers.

The result is a shift in how electricity is accessed and paid for. In Kenya, South Africa, Morocco, and Egypt, large-scale renewable projects have become the dominant new sources of generation. This helps reduce reliance on costly fuel imports and enables more stable, predictable pricing.

In Nigeria and other countries, rural communities that once relied on diesel generators or kerosene lamps are now turning to solar mini-grids and solar home systems.

“These decentralized systems often provide power at a fraction of the previous cost, and with greater reliability.” Access to off-grid solar in Africa is surging. In 2024 alone, GOGLA (Global Off-Grid Lighting Association) affiliates sold 9.3 million solar kits and nearly 2 million appliances like fans, fridges, and water pumps, serving over 137 million people.

In Nigeria alone, nearly 120 solar mini-grids have been installed in recent years, powering tens of thousands of households. Developers say these grids can cut the cost of electricity by up to 60% compared to diesel generators, while also enabling businesses to operate more efficiently.

Even in more infrastructure-intensive systems like small hydropower, Africa is starting to benefit from global learning curves. Though average installation costs remain high at over US$ 4 000 per kilowatt, the highest globally costs are declining. Between 2010–17 and 2018–24, levelized hydropower costs in Africa fell significantly, thanks to efficiency gains in construction and equipment sourcing .

The economic impact of this shift is already visible. Families are saving money, small shops can stay open longer, and students have more hours of light to study. In agriculture, solar irrigation and cold storage are beginning to improve productivity. (bird story agency)