Some of the challenges that are hindering the development of the sector includes:
- High initial capital costs.
- Low awareness of the potential opportunities and economic benefits offered by renewable energy.
- Lack of adherence to system standards by suppliers.
- Limited supply and high cost of capital.
- Lack of access to technological information (for entrepreneurs, consumers and financiers)
- Legal and regulatory barriers forms part of the challenges that SMEs are faced with.
In addition, lack of clear, up-to-date information about how to obtain the various licenses and clearances required to construct and operate renewable energy projects has also hindered the development of the sector, although the government has put in place mechanisms to address this challenge.
In order to support SMEs to realize opportunities in the renewable energy sector and grow the industry, the Nigeria CIC is focused on facilitating knowledge sharing and access to relevant, easy-to-understand information, working with policy makers to create an enabling regulatory framework, providing SMEs with business and technical advisory services, and facilitating access to finance from banks, investors and other sources of financing.