Arnergy, a solar energy company founded in 2013 by Femi Adeyemo, is set to expand its operations in Nigeria following a significant $18 million funding round. The downside is that this investment comes at a time when demand for solar energy solutions is surging. National recent policy changes have greatly increased demand in the country. The funding will expand Arnergy’s ability to bring solar through pay-as-you-go systems to households and businesses across Nigeria. It further paves the way for future growth to Francophone Africa.
Arnergy had targeted multiple sectors including hospitality, education, finance, agriculture, and healthcare. Today, the company has fundamentally changed its approach to a highly collaborative, partnership-oriented approach. This strategy increases cooperation with commercial customers and brick-and-mortar retailers. Along the way, it has proven an impressive ability to create and maintain a sustainable market foothold.
Funding and Growth Strategy
Arnergy’s growth has been supported by a number of investments over the past several years. The company announced $9 million in Series A funding in 2019, led by Breakthrough Energy Ventures. Last month, the company capped that round with another $15 million in a Series B extension. Combined with existing grants for the current funding round, that brings the total to $18 million. This influx of capital will allow Arnergy to scale operations to better serve the burgeoning demand for solar solutions.
The company’s innovative lease-to-own product, Z Lite, is sweeping the industry. Last year, it was responsible for an astonishing 75% of the firm’s sales. Customers pay fixed monthly fees for 5 to 10 years. After that time, they have full ownership of the solar system. The low cost of this solution is why it’s becoming the most preferred consumer option to find energy you can depend on.
Femi Adeyemo, CEO of AHI‐Africa, pointed out the financial benefits of the lease‐to‐own approach. The short power supply he’s paying ₦200,000 ($125) a month on power bills! With our solution, he can save up to ₦96,000 ($60) monthly!”
Expansion Plans
Overall, Arnergy has experienced strong momentum with installations of solar home systems across Nigeria. To date, the company has deployed more than 1,800 systems in 35 states. This tremendous accomplishment includes 9 megawatts peak (MWp) of solar capacity and 23 megawatt-hours (MWh) of battery storage. The utility also expects to deploy more than 12,000 new automated systems by 2029. This is a significant step that amplifies their unequivocal intention to support and increase solar access nationally.
The rising demand for solar systems has been significantly influenced by the removal of Nigeria’s fuel subsidy in May 2023. This policy shift has inspired countless Nigerians to explore off-grid alternative energy solutions. As a direct result, Arnergy’s Naira revenues are projected to increase 4X by year’s end.
Arnergy is in the process of raising additional local debt. Their goal is to proactively engage with commercial banks and development finance institutions (DFIs) to mobilize finance for their projects. This ranges from market-based energy-as-a-service (EaaS) solutions designed specifically for multinationals with a foothold in Nigeria.
Advocating for Local Manufacturing
As the solar market changes, Adeyemo wants to ensure the right environment is created to support local manufacturing. Rather, he wants a smart mix that produces more at home and keeps the door open for imports that we need and will continue to need. We’re on fire for protecting and promoting American, local production. Alternatively, if we prioritize limiting imports over building our domestic capacity, we run the risk of damaging the industry and millions of Nigerians who now rely on solar as their primary power supply.
The need for distributed solar energy resources has reached unprecedented levels with the passage of several landmark policies. This trend underscores the vast growth opportunities that exist within Nigeria’s renewable energy industry. Adeyemo believes that developing the right infrastructure, ensuring policy stability, and improving access to capital are essential for fostering local manufacturing and supporting the solar industry’s expansion.
Leave a Reply