Africa’s renewable energy market could more than double from 86.95 gigawatts (GW) in 2026 to 179.66 GW by 2031, representing a compound annual growth rate of 15.62 percent, according to a report by research and consulting firm Mordor Intelligence.
The report, Africa Renewable Energy Market Size & Share Analysis – Growth Trends and Forecast 2026-2031, identifies declining photovoltaic costs, expanding mini-grid programmes supported by concessional financing and emerging green hydrogen projects as key drivers of the sector’s growth.
Solar expected to lead growth
Hydropower accounted for 62.25 percent of Africa’s renewable energy market in 2025, but solar is projected to record the fastest growth over the forecast period.
Solar capacity is expected to expand at a compound annual growth rate of 27.84 percent between 2026 and 2031, supported by shorter construction timelines and lower upfront capital requirements.
The report notes that utility-scale solar auction tariffs in Egypt and Morocco fell below $0.03 per kilowatt-hour in 2025, while declining global solar module prices are further improving the economics of new projects.
South Africa’s seventh renewable energy auction, for instance, awarded 2.6 GW at an average price of $0.025 per kWh, representing a significant reduction from prices recorded during the country’s first auction a decade earlier.
Financing and mini-grids support expansion
Development finance institutions are also increasing access to affordable financing for renewable energy projects and supporting the development of off-grid assets.
The World Bank-backed Mission 300 initiative has committed $35 billion towards connecting an additional 300 million Africans to electricity by 2030, with solar mini-grids and household systems expected to play a major role.
Nigeria’s Distributed Access through Renewable Energy Scale-up programme has also expanded renewable energy access through solar systems and mini-grids, while concessional financing and guarantees are helping to reduce investment risks.
Green hydrogen emerging as another growth market
Beyond electricity generation, several African countries are positioning themselves as future suppliers of green hydrogen to international markets.
Morocco is pursuing large-scale renewable energy investments as part of its ambition to become a regional green hydrogen hub, while Namibia’s Hyphen project plans to deploy 7 GW of renewable energy capacity to produce hydrogen for export.
Grid constraints remain a challenge
Despite the strong growth outlook, infrastructure constraints could limit the pace of renewable energy deployment.
The report identifies renewable energy curtailment, where generation is reduced because transmission or distribution networks cannot absorb available power—as a major risk to projects.
Foreign-exchange volatility is another challenge for independent power producers, particularly where project revenues are exposed to local currencies while financing and equipment costs are denominated in foreign currencies.
The report therefore points to the need for stronger transmission infrastructure, reliable financing frameworks and measures to manage currency and grid risks if Africa is to fully realise its renewable energy potential.