Off-grid solar investment boomed in 2022, but the sun did not shine on all companies equally

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This blog was published on April 5, 2023

GOGLA’s Investment Database finds that in 2022, 58 companies received total investment commitments amounting to $746m, $289m higher than in 2021. This represents a 63% growth in investment, largely driven by the success of some companies in their scale-up phase, and notably by the $330m investment in Sun King.

GOGLA Investment Database uses historic investment volumes to classify off-grid solar companies1: seed ($0 – $3m), start-up ($3 – $100m), and scale-up (above $100m)2.

1. Scale-up Trends

In 2022, the growth of total industry investment volumes was largely driven by Sun King’s equity raise. Debt commitments remained stable, with scale-up companies attracting a total of $244m.

Whilst bucking the sector trend of declining equity, the Sun King deal shows that some early investors in industry pioneers are seeing partial exits, and illustrates the ability of the off-grid solar business model to balance profitability, impact, and scale, with patient equity capital. The fresh equity is powering Sun King’s growth into new markets and product categories, helping them to expand and diversify. Sun King’s new equity partner is General Atlantic global growth equity fund, an exciting new entrant to the sector.

Other companies at the scale-up stage have chosen to grow by utilizing off-balance sheet debt financing. This is the case for d.light, which announced a large multi-currency debt facility last year.

Five of the seven companies in this segment recorded deals in 20223, with the average raised being $121m. However, not all the companies in the scale-up segment saw investment growth in 2022.

2. Start-up Trends


In total, start-up companies received $101m in investment in 2022, an increase of 9% compared to 2021.This growth has been driven by debt deals. The total debt attracted by start-ups has increased by 50% when compared to 2021, while equity attraction has shrunk by 40% compared with 2021. The drop in equity finance has stifled several start-up companies’ ability to scale and reach new geographies, putting climate, development, and electrification goals at risk.

The persistent lack of equity for start-up companies mirrors global trends and shows investors risk aversion after months of worsening macroeconomic factors, such as rising interest rates and volatile forex.

Nevertheless, there are good reasons for optimism. Having learnt lessons from the early years of market development, start-up entrepreneurs are basing their strategies on robust credit risk management and strong unit economics. This aligns with greater investor emphasis on profitability and margins over rapid growth and is leading to demonstrable benefits for the development of long-term, sustainable markets.

3. Grant Funding Trends4

The total grant funding into the sector in 2022 was $11m from seven donor agencies, with an average grant size of $450k. GOGLA Investment Database tracks venture-building grants but a parallel exercise on Results Based Financing5 (RBF) also revealed that up to mid-2022, the funds committed by RBFs had reached $211m since 2013, an average of $20M per year.

Whilst these donor funds are welcome and impactful, they only constitute around 5% of the $600m per year in donor funding needed to achieve SDG76.

4. Productive Use of Energy (PUE) and ”Beyond Energy” Trends

The Investments Database also tracked a 29% increase in investment into PUE companies between 2021 and 2022. This totaled $32m for 2022, with $25m in the form of debt, $5.1m equity, and $1.8m grant investments. An example is Koolboks, which raised a $2.5M seed round to scale solar refrigeration across Africa, to reduce food waste and support local enterprises.

Whilst difficult to quantify, several investments into traditional off-grid solar companies are also supporting the sale of PUE technologies, beyond energy solutions, and new product ranges, with several businesses now offering solar generators, inverters, e-bikes, financial services, and a range of appliances in addition to solar lanterns and home systems.

This diversification in business lines is a boost to the sustainability of many companies, unlocking greater impacts for consumers, fresh opportunities for investors, and new pathways to profitability. However, it has also led some industry players to move their primary focus from first-time electricity access to areas such as commercial solar and mobile phone sales.

5. Trends in Gender and Inclusion

The evolving investment landscape also saw positive signs in respect of more inclusive grant funding in 2022, where locally-owned companies received $9.8m of the $11m tracked. However, this was not true of overall investment. Female-led companies received only $9.5m of the total funding attracted by the industry, while locally owned companies received only $37m, a fraction of the total.


The all-time high investment in 2022 is a reason to celebrate. Large investments in industry pioneers, as well as exits and the recycling of capital to patient investors, demonstrates the viability of the off-grid solar business model.

However, while the sector has now attracted $3.1b historically in debt, equity, and grants, it still needs $23.3b needed to achieve basic universal electricity access (Tier 1), and $48.8b to achieve access for all that is sufficient to power large appliances, such as refrigerators (Tier 3).

The slowdown in equity finance outside of the Sun King raise, is also a concern. 300 million unelectrified people live in nascent and emerging, rather than mature, off-grid markets. More equity finance and new innovative financial mechanisms are needed to reach customers in early-stage markets and for the continued growth of the industry in both the short and long term.

Investment must also take into account the full needs of the evolving sector. Exciting and impactful new product ranges have been developed, with more innovations emerging each year these need financing. Yet so too do solar energy kits that are driving basic access to electricity. The IEA World Energy Outlook 2022 found that, for the first time since they began tracking it, the total number of people worldwide without access has started to rise. The challenge of attracting enough investment to achieve basic electricity access for all is not only unsolved, it is getting more difficult.

While the investment successes of 2022 must not be downplayed, without a radical step change in funding for the off-grid sector, the chance of achieving clean, modern energy for all by the end of the decade will still slip out of reach. Financial instruments that blend equity, grant, and debt capital, along with a patient approach to returns, are key to de-risking and incentivising companies to reach hundreds of millions more people with clean-tech solar solutions.

We call on development finance institutions, philanthropies, and climate/impact investors to come together in a concerted effort to ensure that no one is left behind in the clean energy transition.

GOGLA Investment Database captures the investment trends over the period 2012 – 2022 and was realized with support from GET.invest, a European programme supported by the European Union, Germany, Sweden, the Netherlands, and Austria.

GOGLA has recently launched a Finance and Investment Working Group for its members, an initiative that will discuss the potential ways to address the industry’s equity funding gap through different expert task forces.

Unlocking Solar Capital Africa in Kampala, Uganda on May 31st and June 1st will offer the opportunity to analyze investment risks and opportunities in the sector, take a look at disruptive technologies and explore successful public private partnership, while creating networking opportunities for those attending.


1.In 2022 $26M of investment commitments were reported with anonymous company recipients (8.8 m in grants, 14m in debt and 4m in equity), and have henceforth not been allocated to cumulatives of number of companies or company stages (seed, start-up scale-ups).

2. Historically, GOGLA Investments Database has tracked over 150 companies in the seed stage, around 40 companies in the start-up phase and seven companies in the scale-up phase.

3. GOGLA excludes deals that are not earmarked for energy access from the Investments Database.

4. RBF and End User Subsidies are not tracked in this database and will be published separately, as these are considered ‘revenue streams’ (linked to a sale), rather than investment

5. Results Based Financing grants are incentives for companies to serve harder-to-reach, underserved markets and involve payments to companies based linked to sales in a given geography.

6. GOGLA, World Bank 2022. Off-grid solar Market Trends Report

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