GOGLA’s latest Investment Data shows global off-grid solar funding in 2024 totaled $300 million, down from $425 million in 2023. (Photo Credit: GOGLA) 
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2024 Off-Grid Solar Funding Fell 30 Percent To $300 Million

Despite the sharp decline in off-grid solar funding last year, GOGLA points to financial innovation as helping the sector grow

Anu Bhambhani

  • GOGLA says global off-grid solar investments dropped by 30% YoY in 2024, to $300 million  

  • Start-up funding went down by 70% YoY, while scale-ups raised 77% of the total funding, showing their market maturity  

  • The average investment size declined, but more early-stage companies received funding 

Global off-grid solar investments in the year 2024 declined by 30% year-on-year (YoY) to $300 million, down from $425 million in the previous year, according to the Global Off-Gird Lighting Association (GOGLA).  

The average transaction size for the overall investment in 2024 declined to $2 million from $5 million in the previous year. However, the number of companies receiving funding for the 1st time increased from 24 to 53, as per GOGLA’s latest Investment Data, available on its website.

Of the total volume garnered through 158 deals, 77% or $229 million was collectively raised by scale-up companies, pointing to their role as mature players in the business as they raise capital at scale and repay debt with internally generated cash flows. The most notable activity in this segment last year was ENGIE Energy Access’ acquisition by Ignite (see Ignite Power To Acquire ENGIE Energy Access).

On the other hand, start-up investments of $48 million declined by 70% YoY owing to equity crunch, leading to ‘triggered consolidation and tough exits,’ state the analysts. They explain that this contraction highlights the difficulty faced by early-stage companies in accessing capital. It was also a period of adjustment as the remaining start-ups in the space demonstrate greater financial discipline and operational resilience, according to the report.

A total of $21 million was raised by 67 seed-stage companies, maintaining last year’s level, comprising $9 million in grants and $7 million in equity funding. Half of all the funding in this category went into Productive Use Renewable Energy (PURE), led by agricultural applications, even as it fell by 63% YoY.

It mirrors the broader trends in the African venture capital landscape, GOGLA says, where funding reportedly went down by 25% YoY. Owing to this funding contraction, some companies exited the market while some remain in financial distress.

Senior Manager Access to Finance at GOGLA, Laura Fortes, says that despite the decline in overall investments in off-grid solar last year, a positive trend is emerging, that of new financial tools and support systems being introduced to help companies grow, including the presence of patient equity funds.

Additionally, the World Bank’s Mission 300 (M300) initiative is preparing Results-based Financing (RBF) schemes to address the affordability gap (see Off-Grid Solar May Power 400 Million Globally By 2030, Says World Bank).