Productive solar technologies attract investors as financing for global off-grid solar sector collapses

Productive Use of Renewable Energy (PURE) technologies, particularly those in the solar irrigation and cold chain segment, saw increased investor interest last year, despite a 43% drop in funding. recorded in the global off-grid solar sector.

Global off-grid solar industry association GOGLA says PURE Technologies will raise $65 million in 2023, double the previous year, due to growing investor interest for this segment. Among the startups that raised funds in the sector last year was Figorr, which offers storage and transportation of temperature-sensitive products.

PURE technologies include devices and products such as solar-powered water pumps, refrigerators, cold rooms and agribusiness equipment that help improve or create income-generating activities, primarily in the agricultural sector.

Laura Fortes, senior investment access manager at GOGLA, told TechCrunch that technologies are generating interest because of their transformative impact on livelihoods through innovation.

“These solutions mitigate climate change, build resilience and provide increased income opportunities for beneficiaries, including smallholder farmers and health clinics. By replacing outdated diesel water pumps and fossil fuel-powered chillers, especially in the face of climate change, they strengthen the resilience and incomes of small farmers,” Fortes said.

In total, the off-grid solar sector raised $425 million last year in 158 deals, including $281 million in debt. Sun King, d.light, Engie Energy Access, M-KOPA, Zola and Bboxx represented 58% of total investments. This shows that most funding has gone to startups or scale-ups operating in Africa, where these companies provide products and solutions to address the lack of access to energy.

Globally, 75% of the population does not have access to electricity, of which 46% come from Africa. Yet equity investment in home solar startups has remained low, which GOGLA says reflects a worrying failure to nurture new businesses focused on electricity access, which will be crucial to meeting the goals of ‘electrification.

“2023 investment data shows that without more risk reduction instruments and concessional financing, off-grid solar energy will not reach the scale needed to meet global development goals. While there are already many examples of effective and catalytic blended finance structures, we need more to increase industry funding sevenfold,” Fortes said.