Investors flock to productive solar technologies as funding for global off-grid solar sector declines

Investor Interest in Renewable Energy Technologies Soars Despite Funding Slump

In a surprising turn of events, the Productive Use of Renewable Energy (PURE) technologies, particularly in the solar irrigation and cold chain segment, have seen a significant increase in investor interest last year. This comes despite a 43% funding slump recorded in the global off-grid solar sector.

According to the global association for the off-grid solar energy industry, GOGLA, PURE technologies raised a whopping $65 million in 2023, double the amount from the previous year. This surge in funding can be attributed to the growing investor interest in the segment, with startups like Figorr, which offers storage and transportation of temperature-sensitive products, securing investments.

PURE technologies encompass a range of appliances and products such as solar-powered water pumps, refrigerators, cold rooms, and agri-processing equipment that enable improved or new revenue-generating activities, primarily in the agriculture sector.

Laura Fortes, GOGLA’s senior Access to Investment manager, highlighted the transformative impact of these technologies on livelihoods through innovation. She emphasized how these solutions not only mitigate climate change but also enhance resilience and offer increased income opportunities for beneficiaries, including smallholder farmers and health clinics.

Despite the overall funding slump in the off-grid solar sector, the total investments reached $425 million last year across 158 deals, with a significant portion being debt. Key players like Sun King, d.light, Engie Energy Access, M-KOPA, Zola, and Bboxx accounted for the majority of investments, with a focus on providing energy access solutions in Africa.

However, GOGLA expressed concerns over the lack of equity investment in household solar startups, particularly in regions like Africa where access to electricity remains a challenge for a significant portion of the population. Fortes emphasized the need for more de-risking instruments and concessional financing to scale up the off-grid solar sector and achieve global development goals.