Techno-economic evaluation and investment decision framework for residential rooftop solar PV systems in Nigeria: a lifecycle cost and LCOE analysis

Residential buildings in Nigeria increasingly face an unreliable electricity supply due to grid instability, making rooftop solar photovoltaic (PV) systems a necessary, cost-effective, and sustainable energy alternative. This study presents a techno-economic evaluation and investment decision framework for residential rooftop PV systems in Nigeria, using lifecycle cost (LCC) and levelized cost of electricity (LCOE) analyses. A real discounting approach was used to estimate the LCC and LCOE for 17 rooftop PV systems over a 25-year service life in Ibadan, Nigeria. Primary data were collected using structured questionnaires administered to PV system users through purposive and snowball sampling. Given the dataset size, mean, correlation, and regression analyses are used to explore the relationships among system capacity, lifecycle cost, and unit electricity cost. A quadrant-based investment framework was developed to classify PV systems into cost–performance categories using sample-mean thresholds for LCC and LCOE. The LCOE values are based on estimated lifetime energy generation. Results show that initial capital costs account for approximately 45–50% of total lifecycle costs, while replacement costs constitute a significant share of long-term expenses. The estimated LCOE values range from ₦ 16. 40/kWh ($0.011/kWh) to ₦ 68. 12/kWh ($0.045/kWh), with a mean of ₦37.33/kWh ($0.025/kWh). Systems with 1–5 kW capacity mostly fall into the low LCC–low LCOE quadrant, indicating optimal investment performance. Larger systems (e.g., 10 kW) tend to have higher lifecycle costs but lower unit electricity costs, indicating strong long-term investment potential. Correlation and regression analyses indicate a weak, statistically insignificant relationship between system capacity and LCOE, implying that cost-efficiency depends on multiple system-specific and operational factors beyond system size. The proposed investment decision framework provides an indicative guide for identifying economically viable PV system configurations. These findings support renewable energy planning by providing evidence-based insights into the cost-efficiency and investment focus of rooftop PV systems, aiding Nigeria's move toward decentralized, sustainable energy.