The solar energy sector in Cameroon operates within a fiscal framework designed to promote clean energy adoption and enhance electricity access. This framework is characterized by two principal exonerations: a long-standing exemption from Value Added Tax (VAT) put in place by the Financial Law, and a more recent (2024), time-bound exemption from Customs duties and taxes.
Impact of Fiscal Exonerations (Past Two Years)
The foundation of Cameroon’s solar incentive structure lies in the exoneration of VAT (0%) on solar and wind equipment/materials, a measure adopted through the 2012 Finance Law. This established solar technologies as essential goods for the national economy.
More recently, addressing Customs duties, the 2024 Finance Law introduced critical measures by exempting customs duties and taxes on the importation of materials and equipment intended for solar and wind energy production. This exemption was granted for a period of 24 months, starting January 1, 2024.
The key objective of combining VAT and Customs duty relief is to facilitate investment, reduce the costs of renewable energy equipment, and ensure these fiscal advantages are passed on to the final consumer.
By lowering the cost barrier for equipment which is often subject to high customs taxes (up to 30% without exemption), the government aimed to accelerate the energy transition, increase the share of renewables in the energy mix to 25% by 2035, and mitigate greenhouse gas emissions by 32%. The overall policy goal is to accompany the significant investments needed for alternative energy solutions.
However, the practical implementation of the 2024 Customs duty exoneration faced immediate challenges. Despite the law intending this exemption to be automatic, the Customs Administration (DGD) reportedly demanded a preliminary application from importers, a requirement deemed illegal as it was not stipulated in the Finance Law itself. This administrative hurdle threatened to undermine the intended economic benefit and was seen as detrimental to operators in the solar sector.
The Way Forward Beyond 2025: Extension of Incentives
The 24-month customs exoneration granted by the 2024 Finance Law is set to expire at the end of 2025. The question of whether these critical fiscal advantages will be renewed in the 2025 Finance Law and stabilized long-term is crucial for maintaining investment momentum in the solar industry.
The Cameroonian government’s strategic planning, outlined in the recently developed National Energy Compact, strongly indicates an intention not only to renew these incentives but also to make them permanent and broader.
Specifically, the government commits to:
- Extension and Stabilization: Prorogating, extending, adapting, and stabilizing the existing fiscal and customs advantages contained in the 2012 and 2024 Finance Laws for the duration of the Compact. Actions to extend these provisions are scheduled for 2026.
- New Legal Frameworks: Adopting a dedicated Code des mini-réseaux (Mini-grid Code) by the end of 2026 to facilitate the deployment of renewable energy mini-grids by mobilizing private financing. This new framework is expected to include specific compensation measures for private developers in case the national grid arrives in their service area.
- Specific Renewable Energy Law: Elaborating and adopting a specific law on the promotion and development of renewable energies by 2027. This law is intended to set legal rules and specific incentives required for mini-grids and standalone solar installations.
Furthermore, the government is committed to capitalizing investment incentives arising from the new Ordinance n° 2025/002 of July 18, 2025, favoring investors in renewable energy and clean cooking.
In essence, while the expiration date for the Customs relief looms at the end of 2025, official government policy outlined in the National Energy Compact strongly suggests that these benefits will be legislatively extended and stabilized. Failure to extend these measures would contradict the state’s stated objectives and jeopardise the achievement of universal energy access by 2030. The future path appears geared toward incorporating these specific tax benefits into permanent, sector-specific legal instruments to ensure predictability for private investors.
