Energy Sustainability and Tax Savings: Comparative Insights from Nigeria and the United States

ABSTRACT : This article analyzes the interplay between energy sustainability initiatives and tax-policy instruments in Nigeria and the United States. It elucidates how tax incentives—ranging from import-duty waivers and Pioneer Status incentives in Nigeria to Investment Tax Credits (ITC), Production Tax Credits (PTC), and their successor Clean Electricity Credits in the United States—facilitate the reduction of investment costs, enhance project viability, and catalyze the deployment of renewable energy. Case studies encompass Nigeria’s Ashama Solar Power Station and associated mini-grid solar ventures, as well as U.S. community solar and net-zero energy building projects. The analysis underscores contrasting policy regimes: Nigeria’s flexible yet administratively fragmented incentives in contrast to the United States’ structured, codified, yet politically volatile tax-credit framework. The pivotal argument posits that tax policy can effectively drive sustainable energy investment—but its impact is contingent upon clarity, institutional capacity, financial market sophistication, and policy stability. Drawing lessons from both contexts, the article proposes pathways for Nigeria to formalize incentives and develop financing mechanisms such as tax equity, and for the United States to preserve policy certainty and equitable deployment as it navigates political fluctuations.

KEYWORDS: Energy sustainability · Tax incentives · Renewable energy · Nigeria · United States · Investment Tax Credit · Production Tax Credit · Ashama Solar · Community solar