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At first glance, the 2024 off-grid solar investment numbers may raise concern: The $300 million raised marks a 30% drop in total funding and a 70% decline in start-up capital. But look closer, and a more nuanced — and promising — picture comes into view.
A new wave of support is emerging, powered by financial instruments designed to help companies grow and scale. New patient equity funds are launching, the M300 initiative is preparing Results-Based Financing (RBF) schemes to address the affordability gap, the Green Climate Fund is stepping up its engagement, and blended finance structures are poised to draw new investors into the space.
Off-grid solar companies are projected to electrify nearly half of the world’s population currently without access to electricity — communities sidelined from development and economic opportunity. With 2030 fast approaching, the next five years will be the defining push.
This recent article applied the Gartner Hype Cycle to the off-grid solar sector — and it fits. Like many emerging technologies, the sector surged with early excitement, hit a reality check due to tough unit economics and operational friction, and is now moving into a phase marked by stronger business models and rising demand.
The funding contraction mirrors broader trends in the African venture capital landscape, where funding fell 25% year-on-year. This contraction has pushed some companies out of the market, whilst others remain in financial distress and may need to restructure before attracting new capital. It’s a reminder that while off-grid solar companies are resilient, they need fit-for-purpose capital strategies to be viable and take advantage of the thinning competitive landscape.
For investors, this is a strategic entry point: fundamentals are improving, successful companies are demonstrating scale and repayment capacity, and the addressable market remains vast and underserved in Africa — the world’s youngest and most dynamic continent.
In 2024, scale-up companies raised $229 million — 77% of all off-grid solar investment.
These companies are showing what sector maturity looks like. Sun King and d.light are turning to securitizations and off-balance-sheet structures to raise capital at scale while managing risk. They’ve achieved significant economies of scale and are repaying debt with internally generated cash flows and delivering early exits to funders — milestones that speak directly to investor confidence.
It’s also been a year of bold moves on the M&A front, most notably Ignite’s acquisition of ENGIE Energy Access — creating a major new player in the space.
Start-up investment dropped to $48 million in 2024 — a 70% fall, against the backdrop of a prolonged equity crunch. This contraction has triggered consolidation and tough exits, compounded by macroeconomic headwinds and a continent-wide funding winter.
Make no mistake — companies have had to adapt quickly, learning hard lessons on currency risk, portfolio quality, and the value of capital discipline. While these pressures have limited the sector’s short-term ability to scale impact, a new wave of resilient start-ups is emerging. These are companies that have weathered the volatility, showing operational grit, financial discipline, and a talent for navigating complexity.
Take Yellow Malawi and RDG Collective, for example. Both secured $3.25 million in debt through Acumen’s Hardest-to-Reach (H2R) initiative, leveraging innovative multi-currency structures to manage forex risk while expanding clean energy access in underserved communities.
67 seed-stage companies raised $21 million — maintaining the funding raised the previous year, a sign that the pipeline of early-stage innovation remains active and investable. Grants continue to play a foundational role ($9 million), and $7 million in equity funding signals confidence in these companies’ long-term potential.
A more coordinated capital stack is emerging — where grants, equity, and technical assistance providers are working together to build pathways from early promise to commercial viability.
Half of all seed-stage investment went into Productive Use Renewable Energy (PURE), and 62% of these companies are locally owned — a sign of strong market insight and on-the-ground execution.
Agricultural applications remain one of the sector’s most promising frontiers. In 2024, investment in Productive Use Renewable Energy (PURE) fell by 63% — a sharp drop largely due to the absence of the larger equity deals that drove the 2023 surge.
This year’s activity was primarily smaller and grant-led, with seed-stage ventures dominating the landscape. Of the 49 companies reporting PURE-related deals, 39 received grants — underscoring the nascent stage of most businesses in this space.
Technologies like irrigation, milling, and cold storage are enabling food production, processing, and preservation — while creating new livelihoods. These solutions, from ag-energy systems to ICT connectivity, are essential to building rural resilience, creating jobs and strengthening livelihoods, and driving climate adaptation.
$900 million in Results-Based Financing (RBF) has been committed to the off-grid solar sector historically — with more than half pledged in just the past two years. These programs are now moving into implementation and disbursement. The largest to date, DARES Nigeria, has allocated $300 million specifically for off-grid solar and recently announced the companies selected to deliver the subsidy. Likewise, the Energy Access Scale Up Project in Uganda also demonstrated strong results, reaching 200,000 sales in record time. Other schemes are preparing to launch in Mozambique, Madagascar, and other high-need markets.
The affordability gap remains wide — estimated at $9 billion — but it also defines the sector’s biggest opportunity. With the right design, RBFs can dramatically expand the addressable market by making quality solar solutions affordable to millions more households and businesses currently priced out of access. Well-structured subsidies reduce end-user costs, unlock scale, improve unit economics, and draw in commercial capital.
Initiatives like M300 are poised to accelerate this shift — ensuring subsidy flows reach the companies and communities with the highest potential for impact and transforming affordability into a growth engine for the sector.
Impact at the household level remains the sector’s true north star — and demand is holding steady. More than 50 million off-grid solar products were sold in both 2022 and 2023, and over 90% of PAYGo customers report improved quality of life. Meanwhile, companies are diversifying into smartphones, solar generators (inverters), and financial products to expand impact and improve profitability.
At the same time, companies are getting smarter about credit risk. Technical assistance, new AI-driven tools, and clearer benchmarks are helping firms strengthen portfolio quality, improve customer targeting, and boost repayment rates. Operational discipline is deepening across the sector — and more companies are reaching breakeven. Together, these shifts point to a growing foundation of financial resilience.
2024 marked a turning point — not just a dip, but a realignment toward resilience and results. Behind the slowdown are companies that have adapted to tougher conditions, proven their ability to scale, and built models that balance financial strength with inclusive impact.
Momentum is real. With donor commitment, smarter subsidies, and rising demand across underserved communities, the opportunity to drive lasting change has never been greater. Companies are ready — but they cannot do it alone.
This is the moment for investors, donors, and governments to act with urgency and alignment — turning ambition into delivery, and potential into progress.
GOGLA Investment Database captures the investment trends over the period 2012 – 2024 and was realized with support from GET.invest, a European programme mobilising investment in renewable energy, co-funded by the European Union, Germany, Norway, the Netherlands, Sweden and Austria.
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View or download previous Investment Data reports, going back to 2019.
Find a comprehensive overview of the methodology applied by GOGLA and partners to collect, process and analyse the sales and impact data shared here.
Photography by Jeffrey Michael Walcott, Julia Gunther, current and previous GOGLA members
Photography by Jeffrey Michael Walcott, Julia Gunther, current and previous GOGLA members
