Source:sun-connect.org
The growth is driven by market leaders but equity scarcity threatens energy access and climate goals. New financial instruments are needed to reach millions of unelectrified people.
GOGLA, the global association for the off-grid solar industry, supported by Get.invest, has released the latest results from the Investment Database, showing a record investment of $746M in 2022, a 63% growth versus the previous year. The record investment in the off-grid solar industry is encouraging. However, it remains far from the $23.3B needed to achieve the SDG7 goal of clean, modern electricity for all. Today, more than 730 million people still live without access.
Key highlights
- Total accumulated investment in the sector is now $3.1B to date.
- This year’s numbers are led by Sun King’s series D investment of $330M. Large investments in industry pioneers, as well as exits and the recycling of capital to patient investors, demonstrates the viability of the off-grid solar business model – with impact and scale working together.
- Several off-grid solar companies are now offering greater diversity in their product range, which is helping to boost sustainability, create more opportunities for investors and develop new pathways to profitability. Investment in the emerging productive use segment of the market grew by 29% to reach $32M.
- However, whilst funds raised by start-ups have grown by 9% compared to 2021, equity investments have decreased by 40%. This is limiting some companies’ ability to scale and reach new geographies and putting climate, development and electrification goals at risk.
- Financial instruments that blend equity, grant and debt capital, along with a patient approach to returns, are key to de-risking and incentivising companies to reach hundreds of millions more people with clean-tech solar solutions.