43% drop in global off-grid solar sector investment in 2023

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  • GOGLA, the global association for the off-grid solar industry, supported by GET.invest, has released the results from its 2023 Investment Database, showing that the total investment into the off-grid solar sector was $425 million, a 43% drop versus the previous year. 

The most significant decrease took place in the scale-ups segment, raising concerns that macroeconomic conditions are pushing the sector further off-track for contributing to universal energy access by 2030. An annual investment of $3 billion is needed for the sector to fulfil its contribution to SDG7,  a number which would be 7x the investment seen in 2023.

Key highlights

  • 85 companies received an investment of $425 million: $281 million in debt, $128 million in equity, and $15.5 million in grants.
  • Productive Use of Renewable Energy (PURE) deals are spearheading the industry’s funding increase, reaching $65 million, double the amount from 2022.
  • Compared to 2022, locally-owned companies received 2X financing and female-owned and managed companies saw a 400% increase.
  • Start-up and seed companies are on a positive trend, reaching respectively $148 million and $24 million in 2023. Those focusing on PURE are receiving substantial support, constituting 34% of the total investment in startups, and reflecting a growing confidence in this segment, with solar irrigation and cold chain technologies having benefited the most. 
  • Equity investments in household solar start-up and seed companies have recovered from the unusually low levels of 2022, but they have yet to reach the heights witnessed in 2021 ($46 million), 2020 ($62 million), and 2019 ($51.7 million). The downward trend of equity investment in household solar signals a concerning failure to nurture new companies focused on electricity access that will be crucial for achieving electrification goals.
  • Off-balance sheet financing offers significant promise as a viable financing mechanism for the sector. It accounts for 75% of the total committed debt amounts although it remains predominantly accessible to industry leaders. Wider adoption could catalyze further growth and innovation.

Link to the full report HERE 

Author: Bryan Groenendaal


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