Renewable energy market in Africa: Opportunities, progress, challenges, and future prospects

Abstract

The transition to renewable energy is crucial for addressing Africa's rising energy demand while fostering sustainable development. With abundant renewable resources such as solar, wind, hydropower, and biomass, Africa is uniquely positioned to play a key role in the global low carbon energy transition. This study investigates the role of renewable energy in supporting Africa's Nationally Determined Contributions (NDCs) and its alignment with the Paris Agreement's climate goals. Using a combination of empirical methodologies, including market analysis and cost-benefit evaluations, we assess the potential of renewable energy to reduce greenhouse gas emissions, alleviate energy poverty, and promote economic growth. Our findings show that harnessing just 25 % of Africa's renewable energy potential could significantly reduce energy poverty, contributing to a sustainable, low-carbon future. Furthermore, we highlights the declining costs of renewable energy technologies, driven by innovation, economies of scale, and market dynamics, making renewable energy increasingly competitive with traditional energy sources. This has led to lower consumer energy prices, improved market attractiveness, and enhanced profitability for renewable energy investments. By examining the socio-economic impacts of renewable energy adoption, the study provides key insights into the market dynamics, investment potential, and policy implications for accelerating Africa's renewable energy transition. Our findings suggest that targeted investments in renewable energy could drive a just transition, improve energy access, and foster long-term socio-economic development across the continent.