Powering Malawi’s Future: Evaluating Renewable Energy Incentives and Global Lessons

Malawi stands at an energy crossroads. With frequent blackouts, overdependence on hydropower, and limited electricity access, the country faces a growing energy crisis that threatens economic growth and development.

In 2016, the United Nations reported that around 90% of Malawi’s 17.5 million people are not connected to the national electricity grid which is ESCOM. Malawi’s total energy supply is sourced from biomass and accounts for about 89% as a vast majority rely on firewood. Due to power cuts and tariff increases by ESCOM, people connected to ESCOM result in using firewood and charcoal for their energy needs. A costly decision that is heavily resulting in widespread deforestation and environmental degradation. 

The solution is clear, renewable energy. Solar and wind energy are two strong candidates that can help ease off the heavy reliance on biomass.The shift towards renewable sources  of energy in Malawi remains slow and stagnant. The question remains, why? Simple, effective government incentives, strong policy frameworks and investment friendly regulations. 

This article explores Malawi’s renewable energy policies, compares them to successful global models, and proposes actionable solutions to accelerate the clean energy transition.

Problems with Malawi’s Energy Sources

To better understand the comparison with other models, let's lay the foundation.

Dependance on hydropower

• Climate Change and drought have made hydropower unreliable.

• Power Cuts affect business growth, tourism, education, health care and economic stability.

Biomass

• Relies on 3.2 million hectares of forests, which cover about 36% of the total land area of Malawi.

• Desertification which results in flash floods and reduced agricultural productivity which Malawians rely on.

• Not a long-term solution as forests decline over time and take time to recover.

Liquefied petroleum gas

• Extremely high cost

• Perceived lack of safety 

Solar energy 

• High installation costs and limited financing options

• Limited government incentives such as tax breaks and subsidies that encourage its adoption. 

• Limited expertise and technical know how.

Energy related policies in Malawi

National Energy Policy(2018)

The overall goal is to provide a guiding framework to increase access and make it affordable, reliable, sustainable, efficient, and modern.

Regulatory Framework for Mini-grids(2019)

It establishes structures for the regulation, development, and operation of mini-grids to ensure sustainability and relevance to society. The goal is to have more than 50 operational mini-grids by 2025.

National charcoal strategy(2017-2027)

It provides a framework for addressing the related issues of increased deforestation and increased demand for household cooking fuel.

Malawi National Electrification Strategy & Action Plan (2019)

It aims to achieve more than 60 % access to electricity by 2030 through grid expansion, mini-grids, and solar home systems.

Malawi Renewable Energy Strategy (2017)

It outlines the priorities and actions needed to achieve universal access to renewable electricity via grid and off-grid systems.

Global Renewable Energy Models: Lessons for Malawi

Kenya: Policy-Driven Solar Expansion

With its prime location on the equator, Kenya has more potential for solar than any other renewable electricity source, eight times as much as geothermal and 13 times as much as hydro.A study done by the Energy Regulations Commission in 2015, estimated the total megawatts (MW) produced in the solar sector to be over 20 with an expected growth of 15% annually. It has successfully expanded its solar sector by implementing clear regulations, financial incentives, and strategic partnerships.

A contributing factor was the 2012 Energy (Solar Photovoltaic Systems) Regulations which were designed to ensure that low quality solar products as well as inexperienced technicians do not infiltrate the market. The Government has also played an integral role in the advancement of solar energy. 

Progressive policies that have made solar energy accessible are tax exemptions on solar equipment as Kenya removed import duties and VAT on solar panels, batteries, and inverters, making them cheaper for households and businesses.

Through programs such as the Off-Grid Electrification Programs, the Kenya Off-Grid Solar Access Project (KOSAP), the government subsidizes solar mini-grids in rural areas. The program to increase modern energy services in underserved counties of Kenya through the implementation of stand alone solar systems and clean cooking solutions for households.

Public-Private Partnerships (PPP) which facilitate collaborations with international investors and companies to scale up solar farms and rooftop solar installations. The Government aims to support strategies for all sectors towards installing solar panels on household rooftops, industrial and commercial premises, large-scale solar farms, and mini-grids.

Lasty, other incentives such as the Kenya Green Bond Program which provides loans for solar startups and renewable energy projects and companies like M-KOPA and Sun King allow customers to pay in small installments via mobile money instead of large upfront costs.

Rwanda’s New Energy Policy

Rwanda's new energy policy, unveiled on February 17, updates the 2015 framework to address emerging challenges and technological advancements. It encourages private sector investment in electricity and clean cooking projects while aiming to diversify energy sources, including solar, wind, geothermal, and biofuels. Aligned with the UN Sustainable Development Goals and Rwanda’s Vision 2035 and 2050, the policy seeks to expand energy access and reduce reliance on imports.

The Policy aims to ensure conservation of water catchment areas in hydropower stations and implement multipurpose hydropower projects. The Policy recognises Rwanda's potential in solar energy due to its geographical location near the Equator, aims to enhance solar energy use by supporting hybrid solar storage technologies, it directs incentivising local production, and developing connection frameworks to integrate solar power into national and isolated grids. The Policy also encourages support and resource assessment in geothermal, methane gas, waste-to-energy, peat, and hydrogen energies. 

In the past 15 years, Rwanda has increased its electricity access by 68% points through incentives driven by collaborations between the government, international donors, and private solar companies. For instance, companies like Ignite Power and BBOXX have provided affordable pay-as-you-go (PAYG) solar home systems to rural households. The Rwanda Development Board (RDB) worked with investors to set up solar farms and decentralized grids in underserved areas.

The government has also provided subsidies and tax exemptions to reduce the cost of solar equipment and encourage private companies to invest. Lastly, Through partnerships with private solar firms, Rwanda established solar mini-grids in remote villages, where extending the national grid would have been too expensive.

Policy Recommendations for Accelerating Renewable Energy Adoption in Malawi

Based on Kenya’s policy-driven solar expansion and Rwanda’s public-private partnerships (PPPs) for rural electrification, Malawi can adopt the following strategies to accelerate its renewable energy transition. This can be by:

1. Strengthen Policy and Regulatory Frameworks

• Develop a clear, long-term renewable energy policy that includes updated incentives, tax breaks, and subsidies for solar and other renewables.

• Simplify licensing and approval processes for renewable energy projects. 

• Encourage certification of  technicians and solar products to reduce inauthentic product installation.

• 2. Encourage Private Sector Investment

• Create an investment-friendly environment by reducing bureaucratic barriers for private and foreign investors.

• Introduce public-private partnerships (PPPs) to expand off-grid solar projects, particularly in rural areas.For instance the Pay-as-go systems which can reduce the initial installment costs.

Public Awareness and Adoption

• Encourage the use of other energy sources such as wind and solar to reduce the reliance on hydropower.

• Implement public education campaigns on the benefits of solar and other renewable energy sources.

• Provide incentives for households and businesses to switch to clean energy, such as subsidies for solar panel installations.

4. Improve Financing and Access to Credit

• Establish a Renewable Energy Fund to provide low-interest loans and grants for solar companies and local entrepreneurs.

• Partner with international climate finance institutions to secure funding for large-scale renewable projects.

Conclusion: A Renewable Future for Malawi

Malawi receives around 5-7 hours of sunshine per day on average making it an ideal location for solar energy and the wind speeds in the Southern Region make it suitable for wind energy. As Malawi’s economy and population grows, so does the energy demand continue to rise.

Deforestation, air pollution, and greenhouse gas emissions threaten the country’s ecosystems and long-term sustainability, while energy insecurity and rising costs place an increasing burden on households. The reliance on biomass also delays the transition to cleaner, more efficient energy sources that could drive economic growth and improve living standards.

To secure a more sustainable future, Malawi must prioritize renewable energy development, particularly solar and wind power, which offer abundant potential. By implementing strong policy frameworks, encouraging public-private partnerships, and investing in clean energy infrastructure, Malawi can reduce its dependence on biomass and hydropower, improve energy access, and align with global sustainability goals. This shift toward renewables will not only protect the environment but also enhance energy security and economic resilience for future generations.

References

1. Rodl & Partner Solar power, the next frontier for Kenya’s renewable energy sector 2016.
2. Chisale Evaluation of barriers and solutions to renewable energy acceleration in Malawi, Africa, using AHP and fuzzy TOPSIS approach Vol 76 2023 Energy for Sustainable Development.
3. Africa Energy Summit National Energy Compact for Malawi. 
4. EPPSA State of Knowledge:Energy Access in Malawi 2022.
5. Kenya News Agency Country promotes solar energy in Public-private partnership 2023.
6. Africa Energy Portal A Breakdown of Rwanda’s New Policy on Sustainable Energy Generation 2025.
7. Esi Africa How Rwanda boosted its electricity access rate by 75% in 15 years 2024.