In Tanzania, farming is becoming harder each year. Rains no longer come on time. Droughts last longer. Floods sometimes destroy crops. For thousands of smallholder farmers, water is now the biggest challenge.

Jeremiah Ayo (70), a vegetable farmer in Meru District in Arusha, has seen farming change over his lifetime.
“When I was young, we could read the skies,” he says. “Now, we rely on luck.”

Before switching to solar, Ayo used open canals and diesel pumps for irrigation activities. Water was wasted, fuel was expensive, and pollution was high. Through a subsidized project, he paid only 20 percent upfront. The rest was covered by subsidies and flexible repayments over 22 months.

In 2023, he installed solar-powered drip irrigation. His chili harvest jumped from 6,000 kilograms to 10,000 kilograms. Today, he proudly calls himself an “ambassador of sustainable farming.”

But Ayo’s story is the exception, not the rule.

Solar-powered irrigation is often presented as the solution. It can provide reliable water, reduce fuel costs, and help farmers cope with climate change. But for most farmers who produce about 80 percent of Tanzania’s food, this solution remains out of reach because of high loan interest rates and high upfront costs.

It estimated that on average, a solar irrigation system costs between 6 and 8 million Tanzanian shillings. 

That is about 42 percent of a farmer’s yearly income. Even when loans are available, interest rates of 12 to 15 percent make repayment risky for farmers who earn money only after harvest.

“Farming income is seasonal, but loan payments are monthly,” explains  Agriculture Financing Expert from Dom Energy Solutions, Patrick Makoye. “One bad season can push a farmer into debt.”

More farmers are turning into modern irrigation systems

In Bariadi District, Simiyu region, maize farmer Handa Mbeho relied on a petrol generator that used 15 liters of fuel every day to irrigate his crops. Fuel shortages, high prices, and frequent breakdowns drained his income.

“I didn’t even know solar pumps were an option,” Mbeho says.

Later, the Water and Energy 4 Food programme (WE4F) introduced him to a pay-as-you-go solar system. With help from friends and relatives, he made the first payment and switched to solar. His fuel costs dropped sharply, and his income could rise up to between Sh500,000 to Sh750,000 a year.

Without that support, he says, solar would have been impossible.

Solar-powered mango farming nurturing growth, sustainability, and climate resilience.Photo/AshaamshaFoundation.

When financing works, lives change

In Chamwino District in central Tanzania, mango farmers show what is possible when financing is available. 

Suzana Machela and other members of Mphunzugulu AMCOS cooperative, formed in 2013, initially used diesel pumps, but rising fuel prices and maintenance issues made them unaffordable, leading to abandonment and low seedling survival rates of just 5 to 40 per cent. 

The AMCOS once depended on diesel pumps. Rising fuel costs forced many to stop irrigating, and seedling survival fell as low as 5 per cent.

In 2019,  World Resource Institute (WRI) partnered with Tanzania’s Traditional Energy Development Organisation (TaTEDO) to identify areas where decentralised renewable energy could help support agriculture. 

Through this initiative, Mphunzugulu AMCOS received funding and assistance to install new solar-powered water pumps with the capacity to irrigate 80 hectares and a drip irrigation system capable of covering 10 hectares.

“This solar project has truly transformed our lives,” Machela says. “We now have enough water for our farms, animals, and homes.”

The cooperative saves more than Sh2.3 million each year on fuel. But without external funding, the project would never have started.

Clean solar energy powering irrigation systems and strengthening community-based farming.Photo/ Amshaamsha Foundation.

A national financing gap

According to the Ministry of Agriculture, the sector employs about 75 percent of Tanzanians and contributes nearly 29 percent to the economy.

Across sub-Saharan Africa, only 13 percent of smallholder farmers can afford solar water pumps, even when credit is available. 

A CGAP survey of 375 solar pump customers in Tanzania, Uganda, and Kenya found 91 percent reductions in irrigation expenses (excluding financing) and higher incomes, with 81 percent reporting improved quality of life.

Solar pumps can multiply yields by up to 2.7 times and save Sh6.5 million annually versus diesel, reducing Carbon dioxide by 487 kilograms per pump.

The way forward

Experts emphasize that Tanzania requires innovative financing models to accelerate the integration of solar technologies into farming practices. 

According to Makoye, the country must adopt a mix of supportive mechanisms to make solar irrigation viable for smallholders.

“Tanzania needs better financing models to truly unlock solar farming,” the expert states. “This includes lower interest loans ideally capped at 8-12 percent longer repayment periods of 24 to 36 months aligned with harvest cycles, direct subsidies covering 30-50 percent of upfront costs, comprehensive tax exemptions on solar equipment imports, and flexible pay-as-you-go (PAYG) systems that allow farmers to pay in small, income timed installments.”

Dom Energy Solutions has observed these barriers firsthand while deploying solar pumping systems. 

Makoye adds that without such measures, high upfront costs often exceeding 40 percent of a farmer’s annual income will continue to exclude many from the benefits of reliable irrigation, higher yields, and reduced diesel dependency.

This view aligns with broader sector recommendations. Recent initiatives, such as those supported by the ELICO Foundation in Dodoma and Iringa regions, are testing credit and pay-for-irrigation models alongside PAYG options from providers like Simusolar. 

Meanwhile, the Finance Act 2025 maintains Value Added Tax (VAT) exemptions on key solar components, including panels, inverters, controllers, and batteries designed for solar storage, providing indirect relief on costs.

Tanzania government efforts and agriculture stakeholders have helped reduce interest rates in recent years, but many farmers still face strict conditions, short repayment periods, and lack of collateral.

According to the Ministry of Trade and Industries,  Tanzania will become home to an emerging solar panel production facility within the Kwala Industrial Park (also known as Sinotan Industrial Park), which highlights it as part of efforts to position the country as a hub for manufacturing and clean energy investments.

Tanzol, a company referenced in industry discussions on solar manufacturing in Tanzania, has been associated with completing a solar production plant featuring advanced lines, though specific details on design for the American market remain limited in public sources.

Initial investments in such industrial zones have reached multi-million-dollar levels, with broader incentives from the Tanzania Investment and Special Economic Zone Authority (TISEZA)   supporting projects over $20 million (Sh49.5 billion), according to PV KnowHow reports on solar manufacturing incentives.