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ECONOMIC ASSESSMENT OF RENEWABLE ENERGY ADOPTION IN NIGERIAN IRRIGATION SYSTEMS FOR CROP YIELD OPTIMIZATION
Abstract
This study examines the economic implications of adopting renewable energy technologies, with a focus hint solar-powered systems, within Nigeria’s agricultural irrigation sector to enhance crop yield efficiency. Through a systematic literature review and desktop analysis of case studies primarily from Abuja and northern Nigeria, the research integrates findings from publications spanning 2010 to 2025 to assess cost-benefit dynamics, productivity outcomes, and systemic adoption constraints. The methodological approach combines techno-economic modeling incorporating metrics such as levelized cost of energy with qualitative evaluations of policy frameworks, adhering to PRISMA guidelines for review synthesis. Empirical evidence demonstrates that solar-powered irrigation systems (SPIS) achieve significant water conservation (40-50% reduction) and markedly improve crop yields (30-50% increases for staples including maize and tomatoes). While initial investment costs remain substantial ($7,000-$12,000 for small-scale installations), long-term economic viability is evident through farm income growth (35% average enhancement) and payback periods of 3-5 years. Additionally, SPIS adoption contributes to climate resilience via reduced greenhouse gas emissions. Despite these advantages, structural barriers such as fragmented supply chains and inadequate financing mechanisms impede broader implementation. Policy recommendations emphasize the necessity of targeted interventions, including government subsidies, innovative financing models (e.g., pay-as-you-go systems), public-private collaboration, and capacity-building initiatives prioritizing smallholder farmers, particularly women and youth. The study concludes that accelerated renewable energy integration in irrigation is critical for advancing sustainable agricultural practices in Nigeria, aligning with Sustainable Development Goals 2 (Zero Hunger) and 7 (Affordable and Clean Energy) through improved food security and rural economic empowerment.
Chapter One
Introduction
1.1 Background to the Study
Nigeria’s agricultural sector serves as a foundational component of the national economy, contributing substantially to gross domestic product (GDP) and rural employment. Agricultural activities account for approximately 25% of GDP while employing more than 70% of the rural workforce, representing a critical economic driver in a country with a population exceeding 200 million (National Bureau of Statistics, 2024; Olisah et al., 2025). The sector has undergone significant transformation since pre-colonial subsistence farming, shifting toward commercialized production under colonial influence through cash crops such as cocoa, palm oil, and groundnuts. Following independence in 1960, agricultural dominance waned as petroleum revenues took precedence, resulting in a decline from over 60% of GDP in the 1960s to contemporary levels (Kefas et al., 2024).
Rain-fed agriculture remains the primary cultivation method, covering roughly 95% of farmland, leaving farmers highly vulnerable to climatic fluctuations. Erratic rainfall patterns, prolonged droughts, and increased flooding exacerbated by global climate change pose substantial risks to productivity (Ani, 2025). The Sudano-Sahel belt in northern Nigeria has been particularly affected, with annual rainfall decreasing by 20-30% in recent decades, leading to recurrent crop failures in staple crops such as millet, sorghum, and maize (Adadu & Eyoma, 2024). Although irrigation presents a viable mitigation strategy, conventional diesel-powered systems impose prohibitive costs, particularly after subsidy removals in 2023. Diesel expenses now constitute up to 40% of operational costs for smallholder farmers, with fuel consumption rates varying between 0.43 and 1.04 liters per hour depending on system pressure (Kefas et al., 2024). Additionally, these fossil fuel-dependent methods contribute significantly to greenhouse gas emissions, accounting for 15-20% of Nigeria’s agricultural emissions through CO₂, NOx, and particulate matter (Olisah et al., 2025).
Solar energy has emerged as a sustainable alternative for irrigation given Nigeria’s abundant solar resources, averaging daily irradiation from 3.5 to 7.0 kWh/m² (Ani, 2025). Solar-powered irrigation systems (SPIS) have gained traction since the early 2010s, supported by initiatives such as the Rural Electrification Agency (REA) and international collaborations. In Abuja’s Karshi village, for example, small-scale farmers utilizing SPIS have demonstrated the capacity to meet daily water demands of 10,000 liters with 258 W pump systems powered by 110 W photovoltaic panels (Ani, 2025). These systems enhance efficiency by reducing evaporation losses by up to 49% through precision irrigation techniques like drip delivery (Adadu & Eyoma, 2024).
Economically, SPIS adoption yields measurable advantages. Techno-economic analyses indicate a performance ratio of 74.62%, supplying over 90% of irrigation requirements at a levelized cost of energy (LCOE) of approximately 0.17 €/kWh significantly lower than diesel-based alternatives over a 20-year operational lifespan (Kefas et al., 2024). In northern Nigeria, farm incomes have risen by 35% due to improved yields and reduced energy expenditures, with water costs declining to $0.05/m³ (Mohammed et al., 2025). Hybrid systems incorporating solar, wind, or biomass further enhance reliability, particularly in regions like Sokoto, where wind potential reaches 97 MW/year (Olisah et al., 2025). The integration of AI and IoT technologies has amplified these benefits, with soil moisture sensors and predictive analytics achieving 40% water savings and 30% yield increases in Nigerian case studies (Akanbi et al., 2025).
Policy frameworks increasingly support renewable energy adoption in agriculture. Nigeria’s Renewable Energy Master Plan (REMP) targets 30% renewable electricity by 2030, emphasizing agricultural applications (Energy Commission of Nigeria, 2022). Programs such as Horti-Nigeria and REA subsidies have facilitated pilot projects, though inconsistent implementation and limited domestic manufacturing threaten cost efficiency (Ojeleye et al., 2025). Gender disparities also influence outcomes, as women comprise 60-80% of agricultural labor yet face barriers to technology access, a gap that targeted interventions could address (Ojeleye et al., 2025).
The socioeconomic implications extend beyond irrigation, touching on broader food security and rural development. Nigeria imports over $5 billion in food annually, a dependency that optimized irrigation could reduce by enabling year-round cultivation of high-value crops (Ani, 2025). Agricultural waste, estimated at 61 million tons annually, presents additional renewable energy opportunities, while solar micro-grids for processing and storage have reduced post-harvest losses by 20-30% (Olisah et al., 2025). Despite challenges such as high initial costs ($7,004-$12,331 lifecycle expenses) and fragmented supply chains, scalable financing models from sub-Saharan Africa, including pay-as-you-go systems, offer viable solutions (Ojeleye et al., 2025). Renewable energy adoption in irrigation aligns with Nigeria’s broader sustainable development objectives, fostering climate resilience and economic diversification away from petroleum dependence.
1.2 Statement of the Problem
Despite the abundant solar resources and demonstrated benefits of solar-powered irrigation systems (SPIS) in Nigeria, adoption rates remain critically low. Only about 5% of the country’s irrigable land estimated at three million hectares is currently under any form of irrigation, with an even smaller fraction utilizing renewable energy sources like solar (International Water Management Institute, 2025; Ojeleye et al., 2025). This persistent underutilization perpetuates vulnerability to climate-induced risks, inefficient resource use, and stagnant agricultural productivity among smallholder farmers who dominate the sector.
The high upfront capital costs of SPIS pose a significant barrier, ranging from $500 for basic portable pumps to $7,000–$12,000 for comprehensive lifecycle systems suitable for one-hectare plots (Ani, 2025; Kefas et al., 2024). These costs are prohibitive for smallholders with limited savings or collateral, particularly when compared to cheaper, albeit less sustainable, diesel pumps (Ojeleye et al., 2025). Compounding this issue is the limited access to affordable credit and innovative financing models, such as pay-as-you-go schemes, which leaves many farmers dependent on expensive diesel fuel, a resource that can consume up to 40% of operational expenses (Kefas et al., 2024).
Technical skill gaps and inadequate after-sales support further hinder adoption. Rural farmers often lack training in SPIS installation, maintenance, and optimization, leading to system underperformance or abandonment (Adadu & Eyoma, 2024). These challenges are exacerbated by fragmented supply chains, poor rural infrastructure, and weak extension services, which make spare parts and technical assistance scarce (Ojeleye et al., 2025).
Traditional irrigation methods, predominantly manual or diesel-powered, result in significant inefficiencies, including 30–50% water losses from evaporation, runoff, and over-application (Ani, 2025; Adadu & Eyoma, 2024). In regions like Abuja and northern Nigeria, such inefficiencies contribute to 30–40% yield losses during dry seasons, worsening water scarcity and reducing outputs for staple crops such as maize and tomatoes (Adadu & Eyoma, 2024).
Policy inconsistencies and institutional barriers further obstruct progress. Despite frameworks like Nigeria’s Renewable Energy Master Plan, which targets 30% renewable electricity by 2030, implementation gaps, regulatory uncertainties, and insufficient subsidies or incentives slow deployment (Kefas et al., 2024; Ojeleye et al., 2025). Additionally, gender and youth disparities limit access, as women who perform 60–80% of agricultural labor often encounter additional social and economic constraints (Ojeleye et al., 2025).
These interconnected challenges sustain a cycle of low productivity, food insecurity, and environmental degradation, undermining Nigeria’s potential to achieve sustainable agricultural growth and climate resilience through renewable energy adoption in irrigation.
1.3 Objectives of the Study
The main objective is to assess the economic viability of renewable energy adoption in Nigerian irrigation for crop yield optimization. Specific objectives are:
- Evaluating the cost-benefit analysis of solar-powered systems compared to traditional alternatives.
- Analyzing the impact on crop yields and farmer incomes through case studies.
- Identifying policy and financing mechanisms to overcome adoption barriers.
1.4 Research Questions
- What are the economic costs and benefits of adopting SPIS in Nigeria?
- How does renewable irrigation affect crop yields and farmer incomes?
- What barriers hinder adoption, and what mechanisms can overcome them?
1.5 Significance of the Study
This study carries significant implications for Nigeria’s agricultural sector, economic growth, and sustainable development. The research conducts a rigorous economic assessment of renewable energy adoption, with a specific focus on solar-powered irrigation systems (SPIS), to generate evidence-based insights that could facilitate the widespread implementation of these technologies among smallholder farmers. The findings have substantial policy relevance, providing actionable data for institutions such as the Rural Electrification Agency (REA) and the Federal Ministry of Agriculture and Rural Development to refine subsidy structures, financing mechanisms, and extension programs.
Economically, scaling SPIS adoption has the potential to contribute an estimated USD 19 billion to Nigeria’s GDP by improving agricultural productivity, reducing operational expenditures, and enabling year-round cultivation. Given that agriculture accounts for nearly a quarter of GDP and employs more than a third of the workforce, optimizing irrigation through renewable energy could substantially increase output, curb annual food imports exceeding $5 billion, and enhance foreign exchange reserves.
From an environmental perspective, the study emphasizes SPIS as a viable strategy for mitigating climate change by displacing diesel-powered pumps, which contribute 15-20% of Nigeria’s agricultural greenhouse gas emissions. Transitioning to solar irrigation could yield millions of tons in annual CO₂ reductions, aligning with Nigeria’s Nationally Determined Contributions (NDCs) under the Paris Agreement.
Socially, the research underscores opportunities for inclusive development, particularly for women and youth, who comprise the majority of the agricultural labor force yet face systemic barriers to technology adoption and land ownership. Targeted interventions such as gender-responsive financing, cooperative models, and skills training could enhance equity, alleviate rural poverty, and generate employment in solar installation, maintenance, and agro-processing.
Furthermore, this study advances progress toward multiple Sustainable Development Goals (SDGs), including SDG 2 (Zero Hunger) through increased agricultural yields, SDG 7 (Affordable and Clean Energy) via renewable energy access, SDG 13 (Climate Action) by reducing emissions, and SDG 5 (Gender Equality) through equitable adoption strategies. Academically, the research enriches the discourse on techno-economic feasibility in sub-Saharan Africa, offering a replicable framework for neighboring countries. Ultimately, these insights may catalyze public-private partnerships, attract investment, and position Nigeria as a regional leader in climate-resilient agriculture.
1.6 Scope of the Study
The study focuses specifically on evaluating the economic viability of solar-powered irrigation systems (SPIS) within Nigeria’s agricultural sector, particularly among small-scale farming operations in select regions including Abuja’s Karshi district and northern states. Using secondary analysis of published case studies, project reports, and techno-economic modeling data (2010-2025 timeframe). This scope intentionally excludes conventional hydropower infrastructure and non-solar renewable energy alternatives to maintain analytical precision regarding photovoltaic applications in crop production optimization scenarios.
1.7 Limitations of the Study
This research primarily utilizes secondary data from existing studies and reports extending through 2025, potentially introducing methodological biases or limitations stemming from incomplete datasets. Key contextual factors such as regional variations in solar irradiance, soil composition, and socioeconomic conditions across Nigeria remain underrepresented due to insufficient primary fieldwork data collection. The study’s applicability may further be constrained by dynamic external variables including evolving renewable energy technology costs, post-2025 policy shifts regarding subsidies, macroeconomic fluctuations, and global supply chain disruptions. Notably, the analysis of social inclusivity is potentially compromised by inconsistent gender-disaggregated data availability and insufficient youth-specific indicators in certain referenced sources.
1.8 Definition of Terms
- SPIS: Solar-Powered Irrigation Systems.
- LCOE: Levelized Cost of Energy.
- Techno-economic analysis: Evaluation of technical performance and economic viability.
References
Adadu, Y. A., & Eyoma, A. F. (2024). Assessing the impact of solar-powered irrigation systems on water availability for crop production in Abuja. IOSR Journal of Humanities and Social Science, 29(12), 1-10. https://www.iosrjournals.org/iosr-jhss/papers/Vol.29-Issue12/Ser-4/A2912040110.pdf
Akanbi, M. B., Adedotun, K. J., Banjoko, I. K., & Raji, A. K. (2025). Optimizing water resource management in agriculture using AI-powered solar irrigation systems. Journal of Science Innovation & Technology Research. https://africanscholarpub.com/ajsitr/article/download/530/513/1012
Ani, V. A. (2025). Design of a solar water pumping system for efficient irrigation systems for crop production. Frontiers in Sustainable Food Systems, 9. https://doi.org/10.3389/fsufs.2025.1546320
Kefas, E. B., Durkwa, L. M., & Abba, M. U. (2024). Advancing sustainable agriculture: Renewable energy integration and policy implications for irrigation in Nigeria – A systematic review. Water Harvesting Research, 7(1). https://journals.birjand.ac.ir/article_3030_b6b645b63d8cbee1e2738b381a315786.pdf
Mohammed, J. M., Abdulkadir, S. A., Abdullahi, A. S., et al. (2025). Harnessing AI-powered smart irrigation systems to boost agricultural production and combat climate change in Nigeria: A comprehensive literature review. International Journal of Hydrology, 9(4). https://medcraveonline.com/IJH/IJH-09-00411.pdf
Ojeleye, O. A., Oke, A. O., Minh, T. T., & Tilahun, S. (2025). Creating an enabling environment for solar irrigation ownership in Nigeria. CGIAR. https://cgspace.cgiar.org/bitstreams/c96bae28-1469-4c0c-8379-ceb91524c017/download
Olisah, N. C., Anabaraonye, B., & Odoh, C. C. (2025). The role of renewable energy in enhancing climate smart agriculture in Nigeria. Journal of Environmental Science and Agricultural Research. https://oaskpublishers.com/assets/article-pdf/the-role-of-renewable-energy-in-enhancing-climate-smart-agriculture-in–nigeria.pdf