Solar Energy
One Comment December 1, 2025

Somalia possesses some of the highest solar irradiation rates globally, making solar energy the most compelling solution to its high-cost, diesel-dependent energy sector. While the private sector has pioneered the use of hybrid mini-grids, scaling this success requires directly confronting several deep-rooted innovation and infrastructural challenges.

Regulatory and Institutional Challenges

The most significant barrier to large-scale, long-term solar innovation is the lack of a fully operational and enforced regulatory environment.

Incomplete Legal Framework

  • The NEA Gap: While the Electricity Act of 2023 established the National Electricity Authority (NEA), the authority is not yet fully operational. This means that key supporting frameworks

  • such as clear rules for grid integration, power purchase agreements (PPAs) for Independent Power Producers (IPPs), and standardized technical codes—are still pending.

  • Investor Risk: The absence of comprehensive and predictable regulations and technical standards creates market uncertainty. This deters major foreign direct investment (FDI) and makes large-scale utility projects difficult to finance, as international investors perceive higher risk.

2. Economic and Financial Barriers

High upfront costs and structural financial limitations restrict access to quality solar technology for both end-users and service providers.

High Initial Costs

  • Expensive Technology: High-quality components, particularly Battery Energy Storage Systems (BESS), have high importation costs. This is compounded by tariffs, complex procedures, and fluctuating currency rates, resulting in some of the highest electricity tariffs in Africa (averaging around $0.41/kWh).

  • Financing Constraints: Local banks have limited capacity for providing the long-term, low-interest loans necessary for solar infrastructure. Lenders are often hesitant due to high perceived risk, creating a persistent capital expenditure (CapEx) hurdle for both mini-grid operators and end-users.

Innovative Solution: PAYGo Models

  • Somalia’s advanced mobile money infrastructure has been crucial in overcoming the retail financing gap through Pay-as-you-Go (PAYGo) solar home systems. This innovation allows customers in rural, off-grid areas to pay for systems in small, affordable installments via their mobile phones, making clean energy accessible to low-income populations and increasing financial inclusion.

3. Technical and Quality Control Issues

Maintaining system reliability and performance is challenging due to the technical demands of solar-hybrid systems and a skills shortage.

Workforce and Knowledge Gaps

  • Lack of Expertise: There is a significant shortage of locally certified and trained technicians in modern solar PV, BESS integration, and advanced system maintenance. This lack of expertise often leads to technical issues like poor panel layout, battery overcharging, and inefficient system utilization, undermining the reliability of solar projects.

  • Quality Control: The market is flooded with low-quality, cheaper imported components, which have shorter lifespans and lower efficiency. The lack of standardized quality checks and enforcement mechanisms means consumers often receive poor value, eroding trust in solar technology.

The Need for Hybridization

  • Due to the intermittent nature of solar power, even the most efficient mini-grids still rely on diesel generators (DGs) as a backup. Innovation must focus on synchronizing solar PV, BESS, and DGs effectively. This hybridization is necessary to prevent generator “wet stacking” (running DGs at low load, which wastes fuel and damages the engine) and to ensure stable, 24/7 power.

The Way Forward

To successfully innovate and scale solar power, a coordinated effort is required:

  1. Finalize the Institutional Framework: The government must prioritize the rapid development and enforcement of technical and operational standards under the National Electricity Authority to de-risk the sector for serious investors.

  2. Incentivize Quality: Implement tax relief or subsidies on the importation of high-quality solar PV and BESS components to make reliable systems competitive with cheaper, low-quality alternatives.

  3. Invest in Local Skills: Establish and fund dedicated Technical Vocational Education and Training (TVET) programs to create a robust local workforce skilled in installation and modern hybrid system management.