Africa needs solar farms, not just solar islands

The downsides of a Chinese panel import boom

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Now back to Eat More Electrons…

I hate to be a wet blanket, but the recent excitement over Africa’s solar imports has me worried.

The (terrific!) think tank Ember released stunning data on African imports of Chinese solar panels showing a 60% surge in just 12 months. This has gotten a lot of play, mainly celebratory. The New York Times for instance reported positively on the trend while David Wallace-Wells in a reflective Times essay on the future of climate policy suggests that solar panel imports could end energy poverty while making both fossil fuels and the United States irrelevant.

I have concerns.

First, some throat clearing: Yes, I ❤️ solar.

Lest I be misunderstood or falsely accused (you know who you are) of technology tribalism: solar power is good. It’s a mature, proven technology. It can be very cheap at the margin. Africa does not have enough of it. I wish African countries had a lot more. And I’ve argued elsewhere that the World Bank could help the continent build lots more solar farms if it was honest about subsidies.

So the surge in solar panel imports is partly good news. At one level, Africa is finally tapping into its huge solar radiation potential. For individual consumers who suffer from an unreliable grid, installing panels on your own roof helps liberate you from a dysfunctional utility. For many businesses too, solar panels can help cut daytime power costs and keep things running when the grid goes out. Some can cut the cord entirely.

It’s also good news for the environment. Solar panels, especially in places like Nigeria and DRC, are very likely displacing diesel generators. This is positive for local air (and noise) pollution and a lower carbon footprint.

So lots of reasons to cheer the surge in Chinese solar panel imports.

Next, a clarification: The data show panel imports, not installation of solar farms.

I truly hope that I’m wrong here, but panel imports are likely mostly for rooftop or small systems, not utility-scale solar farms. (It’s possible that we’re just seeing a lag here, but solar farm construction is pretty quick, typically 12-18 months, so we’ll know for sure soon.)

Here are six African countries showing Chinese solar panel imports (from Ember) overlaid with solar capacity additions above 1 MW (from Global Energy Monitor).

And here is the same data aggregated for all of Africa.

Note: GEM data for H1 2025 is not yet available (it’s not zero).

Early conclusion: Panel imports from China are going way up, but solar farms of any meaningful size are not.

So what’s wrong with a bottom-up small-is-beautiful solar revolution?

Lots.

1. What’s better for (some) private individuals may not be so great for everyone else.

This is a classic collective action dilemma. Some consumers will save on bills and provide themselves more reliable power. But just as Lauren Gilbert explained why every diesel generator is a policy failure, so too is every grid-connected consumer who now needs solar panels as backup. If I was living in DRC or South Africa I too would feel let down by a failed power system. And I would do whatever I could to get power, the rest be damned. This is a perfectly rational response.

For those living with energy abundance in the US or Europe and thinking ‘wow, this is great,’ I have a different view. I too can romanticize about being a rugged individual living free and bucking the system. During the pandemic I raised my own chickens. But there’s a very good reason I don’t grow my own food, fetch my own water, or produce my own electricity: It’s far more efficient for me to pay someone else to do it at scale. Now that more people turn to a workaround to make up for a failed power system is not cause for celebration, but a grudging acceptance of second-best.

Grid-scale national power provides lower unit costs via economies of scale while shared infrastructure spread the costs over time and across geographies. All of these system-wide benefits are lost when consumers exit. The result is higher average costs and unfair burden sharing. Some individuals gain, but the overall economy is left worse off.

2. Consumer defections are especially bad for equity since tariffs effectively become a regressive tax on poor consumers.

One major reason everyone in Africa doesn’t have solar panels on their roof already is because it requires upfront investment. By definition, richer consumers can afford more so they are much more likely to add imported solar panels. Those that stay connected to the grid for nighttime or cloudy days are then freeriding on the system, leaving grid costs increasingly borne by those who can’t afford the part-time exit option. The overall result is regressive: shared costs shift from richer to poorer. This is not unique to Africa as the same dynamic is happening in California. But we should not pretend the solar import boomlet isn’t mostly benefiting the relatively better-off.

(If we get future data showing that the panel surge mostly benefitted new first-time connections or household system upgrades, rather than replacing diesel gensets or enabling grid exits, then I will retract this concern.)

3. Grid exits put even more pressure on distressed utilities.

Electricity is a public good and utilities provide public services. Until storage technology improves greatly, we should reject the sentimental notion that economies can thrive without utilities. We still need them. If we are entirely privatizing and decentralizing electricity – every home and business for themselves! – that’s a world that is much poorer and unequal than one with financially-viable utilities and shared costs for collective infrastructure. Let’s not surrender just yet.

But utilities will continue to bleed customers until their service is better than the alternative. That’s why utilities should be focused on service quality to keep their highest-paying consumers. They should jump into taking advantage of cheap panels too. Building large-scale solar farms and integrating them into the grid (balanced by other dispatchable sources) would make more sense than trying to regulate away consumer exits. Such an approach would benefit everyone. And a big step forward would be for utilities to embrace open competitive procurement, not falling back into signing unsolicited deals and keeping details secret.

4. A fragmented solar power system ultimately hurts long-term job growth by reinforcing low-productivity.

The bigger macroeconomic effect will be via the competitiveness of firms. How is, say, a Kenyan manufacturer running its own solar + storage system supposed to realistically compete with a Vietnamese peer paying $0.07/kWh for power that’s 99% reliable? It can’t.

Distributed solar can theoretically work for some companies, such as those that

• Don’t care when they get power, like a farm that can happily run an irrigation pump intermittently;

• Are not sensitive to prices, like a hotel that can pass higher energy costs on to their customers; or

• Serve a captive local market insulated from competition, such as a protected industry or non-tradeable services like retail.

Everyone else is stuck. Tough luck for companies that need 24/7 low-cost power. Or are highly price sensitive. Or hope to compete with foreign firms enjoying cheap grid power. Energy-intensive exports can forget it.

That’s why running an economy on cheap Chinese solar panels with no grid will mean an already low-productivity economy will become further mired in a low-productivity equilibrium. Millions of jobs will never be created. Countries that want industrialization and full employment (who doesn’t?) will need to do much better.

Giving up on utilities is giving up on industrialization

So, the surge in Chinese solar panel imports is definitely a good thing for lots of people who now have a better alternative to diesel generators. Some consumers will save money too.

But African countries cannot abandon utilities if they want jobs and growth. The continent’s industrialization plans require viable utilities if they are to become anything more than isolated pockets of activity. If countries want energy technology like solar to enable economic transformation, then we should all collectively be thinking about how cheap Chinese panels can best contribute to diversified national power systems as the foundation of a vibrant, expanding economy that serves everyone.

Africa needs big solar farms, not just little solar islands.

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Postscript: One of the best things about working at at think tank is being surrounded by smart people with a variety of views. As I was writing this, my colleague Jeff Haeni was also analyzing the Ember data and taking down four myths. Check it out.