The Global Off-Grid Lighting Association (GOGLA) announced that total investment in the off-grid solar power sector will be $425 million in 2023, down 43% from the previous year. The industry needs to address early-stage funding gaps to meet development and climate goals.
According to figures released by GOGLA, total investment in the off-grid solar power sector will be $425 million in 2023, down 43% year-on-year.
The association reported PV magazine Leading off-grid installer Sun King has raised $330 million in equity as there were “material anomalies” that distorted the previous year’s figures. “However, it is good to note that to meet development and climate goals, the sector should experience growth, not stagnation,” GOGLA said.
A total of 85 companies secured investments in 2023, comprising $281 million in debt, $128 million in equity, and $15.5 million in grants. His investments in the so-called productive use of renewable energy (PURE) sector doubled in 2022, reaching $65 million. PURE refers to the use of energy that increases the profitability of small and medium-sized enterprises through increased income and productivity.
Total investments in startups and seed companies in the off-grid space will be $148 million and $24 million in 2023, with PURE transactions accounting for 34% of total startup investments, which is particularly relevant for this sector. GOGLA said it reflected “growing confidence” in the sector. From solar irrigation to cold chain technology.
GOGLA said off-balance sheet financing accounts for 75% of the total debt committed and therefore could be a viable financing mechanism for the sector, but remains primarily accessible to industry leaders. He added that it was a positive development and called for wider implementation to foster further growth and development. innovation.
GOGLA said it is essential to address early stage funding gaps.
“While the industry boasts viable business models, resilient companies, and innovative technology, challenges remain, including high inflation, interest rates, and climate and economic uncertainty. These obstacles Collective action is essential to overcome this crisis and reach the world’s poorest communities,” the spokesperson said.
According to another report by GOGLA, affiliates, defined as consumer electronics companies, which are believed to account for about 28% of the total off-grid solar market, sold 8.96 million solar energy kits in 2023. This number is about 500,000 fewer than in 2022. , but recorded the second highest number of the year.
The association attributed the year-over-year decline to structural decline in South Asia and lower sales or slower growth in core markets in sub-Saharan Africa. It added that this figure puts the industry “off track to achieve its projected contribution to universal energy access”.
“Despite showing great resilience during COVID-19 and the years that followed, the off-grid solar industry remains impacted by several macroeconomic factors,” said Sarah Malm, GOGLA Executive Director. “Sales are slowing down,” he said. “Affordability remains a huge issue for the people we serve, so we call on our development partners to double down on their support for the off-grid solar sector.”
GOGLA estimates that approximately 116 million people currently benefit from improved access to energy through off-grid solar energy kits. This kit is commonly used to power fans, refrigerators, televisions, and solar water pumps. GOGLA added that approximately 109 million tonnes of CO2e will be avoided through the use of the kit, which is equivalent to shutting down 28 coal-fired power plants for one year.
Earlier this year, a report from US-based impact measurement firm 60dB concluded that post-sales support is key to promoting off-grid solar power.
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