Off-Grid Solar Companies Closed $64M in 2014: The Start of a Bigger Trend?
Friday, December 12, 2014
Early-stage investments in off-grid solar companies operating in developing countries reached $63.9 million in 2014, according to a tally from Greentech Media.
The diverse range of investments came from venture capitalists, impact investors, commercial banks and other large energy companies looking to expand into new emerging markets.
The numbers were boosted by two large deals: $20 million in debt and grants to Kenya’s M-KOPA Solar, and $23 million in venture funding closed by Tanzania-based Off-Grid Electric.
M-KOPA and Off-Grid Electric are representative of the new wave of solar companies attracting capital. Both companies use mobile payment platforms that give customers the ability to pay for electricity as they need it, rather than investing in an entire solar system.
It’s not just the falling cost of solar helping them expand operations. The pay-as-you-go model is enabled by the ubiquity of mobile phones, the growth in mobile payment methods like M-Pesa, the rising cost of kerosene and the falling cost of LED lights.