Ethiopia is poised to become a global model for renewable energy transition, harnessing its abundant solar resources to deliver affordable and reliable electricity while driving sustainable development.
According to the latest Power Systems Transformation report by the Energy Transitions Commission (ETC), Ethiopia has the potential to cut energy costs by more than 50% through solar-led systems. This presents a transformative opportunity—not just for universal access, but also for industrialization, job creation, and climate resilience.
As the sun-rich “Horn of Africa” nation powers forward, Ethiopia’s energy vision is aligned with a greener, more inclusive future.
Ethiopia’s Solar Potential: A Regional Powerhouse
Ethiopia receives solar irradiance levels of 2,200–2,500 kWh/m²/year—surpassing even solar-rich countries like India and Mexico—positioning it as a regional leader in renewable energy. This high solar potential makes Ethiopia a strong candidate for achieving over 90% renewable electricity generation by 2040.
Dr. Araya Asfaw, Director of the Horn of Africa Regional Environment Centre, emphasizes: “Ethiopia’s energy future isn’t just about megawatts—it’s about integration. Solar by day, hydro by night, and wind filling the gaps creates a resilient, low-cost system.”
Grid Modernization: Leveraging the Eastern Africa Power Pool (EAPP)
The Energy Transitions Commission (ETC) identifies long-distance transmission infrastructure as a key driver of cost efficiency in regional power systems.
Ethiopia’s $1.8 billion investment in the EAPP interconnection—linking Kenya, Sudan, and Tanzania—enables the export of surplus hydropower and solar energy, helping to stabilize and integrate regional electricity grids.
According to Ethiopian Electric Power’s Strategic Plan (2021–2030, p. 23), Ethiopia is projected to generate $400–$600 million annually from electricity exports through interconnectors with Sudan, Kenya, and Djibouti—revenue expected to be reinvested into domestic solar energy and storage capacity.
Challenges: Supply Chain Constraints
Despite notable progress, several challenges persist:
- Fossil fuel subsidies remain significant, with $500 million annually still allocated to support diesel generators.
- Supply chain limitations exist, as Ethiopia imports approximately 80% of its battery storage systems from China.
- A shortage of skilled labor is evident, with only 5,000 trained technicians available to meet the demands of an estimated 50,000-job market.
Dr. Yohannes Hailu, Energy Policy Expert at UNECA, cautions: “Without developing local battery manufacturing capacity and implementing tariff reforms, Ethiopia risks prolonged dependency on imports.”
Private Sector Driving Renewable Energy Growth
Leading companies such as Safaricom and other Textiles are increasingly utilizing corporate Power Purchase Agreements (PPAs) for solar energy, resulting in a 40% reduction in their energy expenses.
Daniel Bekele, CEO of Ethio-Leather, emphasizes, “Renewables aren’t just environmentally friendly—they are the smartest business choice.”
The Path Forward
Critical actions outlined by the ETC include:
- Phasing out fossil fuel subsidies by 2027 to align with Nationally Determined Contribution (NDC) commitments.
- Establishing a $200 million battery manufacturing facility in Adama.
- Training 20,000 solar energy technicians through Technical and Vocational Education and Training (TVET) initiatives.
Global outlook:
Bruce Douglas, CEO of the Global Renewables Alliance, states, “Ethiopia’s solar energy transition serves as a model for Nigeria, the DRC, and other sun belt countries.”Sources: ETC, Ethiopian Energy Authority, IRENA, UNECA, EEP