The off-grid solar industry transforms lives. With the right support, the off-grid solar market can scale to provide affordable, clean and reliable access to electricity to the 840 million still living without. While, total investment in the sector grew by 20% in 2018 (compared to 2017), reaching USD 352 million, additional investments are still needed for the sector to grow. Findings from the 2018 Off-Grid Solar Market Trends Report, shows that there is still need for funding of up to USD 5.7 billion until 2022. To achieve that, the industry must perform for investors and consumers and meet the needs of all those we work with.
The GOGLA Consumer Protection Code aims to safeguard impacts of the off-grid solar sector and respecting rights of consumers. The Code aspires to help companies within the sector provide investors and other stakeholders with a framework to promote good practice. SunFunder – a solar finance business – was the first investor to endorse the GOGLA Consumer Protection Code. In this interview, Avi Jacobson, Senior Investment Officer at SunFunder, talks about the importance of committing to the Code, the positive signals it helps companies send to investors and the future of the Code within the off-grid solar sector.
1) What does success look like to you, as a company?
Success to us is when our investments enable our borrowers to deploy more solar systems to power homes and businesses that lack reliable electricity. To date, our financing has directly impacted over 5 million people with increased access to clean energy and mitigated more than 450k tons of CO2e annually. This reflects the long-term relationships, scalability and trust that we have always tried to build in the sector. In the next few years, we aim to work with our borrowers to improve energy access for millions more people. The ultimate measure of success is sustainable energy for all: we also have a role in attracting new investors to the industry, both through our own funds and by helping off-grid solar companies build their own track record.
2) What do you think are the most important next steps for the off-grid solar industry to scale successfully?
For now, the onus is on the sector, its extraordinary enterprises and financing partners like SunFunder, to prove that they can operate sustainable business models. Attracting commercial investment will be critical for the industry to scale. Traditional commercial investors are looking for off-grid solar companies with proven business models. They will flock to the industry when leading enterprises can offer predictable returns in a similar form to what they already buy. SunFunder’s role is to ensure growth capital is invested through appropriate financing products so that solar companies can develop sustainably.
There are important intermediary steps to lay the foundations for getting there: more early-stage equity and catalytic capital. Companies need both of these to build more track record and reach profitability. SunFunder actually hosted a roundtable on catalyzing capital for energy access and climate change in May and we shared key points in a blog here.
Image: Avi Jacobson