Opinion: Why off-grid solar needs a funding reset

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The off-grid solar sector is experiencing a major funding shortage, with investment in last-mile companies dropping sharply, so says Corentin Billiet. In today's opinion article he argues that serving certain communities isn't commercially viable without external support. The sector needs more subsidies, philanthropic capital and public funding.

• Mr. Billiet is an impact investor with over $20 million invested in energy, education, and the circular economy. He's a senior investment officer for ElectriFI, an EU-funded firm focused on increasing renewable energy access in emerging markets.

• He argues that achieving universal energy access requires a fundamental shift in how we approach funding and business models. The next chapter for the sector demands courage, creativity, and collaboration, and he believes it's ready for this challenge.

Opinion article 

By Corentin Billiet

Last month, I had the opportunity to attend two pivotal gatherings in Africa: the GOGLA and Acumen conferences. Both brought together some of the most engaged minds in the off-grid solar sector, and for the first time, I witnessed a candid, collective reckoning with the sector’s deepest challenge: funding universal access for the last mile.

The Funding Crunch: A Sector at a Crossroads

Over the past two years, equity investment in last-mile off-grid solar companies has dropped by approximately 40%. Investment amounts decreased from around $500 million in 2019 to about $300 million in 2023. This has significantly impacted the many companies focused on serving the most remote and vulnerable populations. The message from investors has been clear: without profitability, capital will continue to retreat from these businesses.

This trend is not about the commercial and industrial (C&I) solar sector, which continues to attract funding. The crisis is squarely centred on companies trying to serve the “last mile” — the poorest, most remote customers who cannot afford even the most basic systems at commercial rates. The collapse of a few large players, who raised significant funds but failed to achieve profitability, sent shockwaves through the investor community, leading to a widespread pullback.

The Elephant in the Room: Universal Access Isn’t Bankable

At both events, the sector finally addressed what many had privately feared: the current commercial models simply do not work for the poorest of the poor. The question was put bluntly — can we make money serving the very bottom of the pyramid? The answer, echoed by many, was no.

This acknowledgement is both sobering and liberating. For too long, the sector has operated under the assumption that universal access could be achieved through private investment alone. The reality is that reaching the last mile is not commercially viable without significant external support. Investors, by nature, require viable business models. If we are to reach universal access, we must be honest: subsidies, philanthropic capital and public support are essential.

A Turning Point: New Solutions and Renewed Optimism

Despite this acknowledgement, I left the events with a sense of optimism. The sector’s willingness to confront these challenges head-on is a necessary step toward real solutions. Among the ideas discussed:

• New funding vehicles that blend subsidies and philanthropic money, specifically targeted at last-mile access.

• A renewed focus on companies building viable models for customers who can pay, ensuring the sector remains attractive to investors.

• Innovation in products and delivery models, with an emphasis on quality and affordability.

• Localising manufacturing in Africa to reduce costs, create jobs, and strengthen local economies.

• A call for political commitment and government involvement, recognising that no country has achieved full electrification without strong public sector leadership.

Localising Manufacturing: A Game-Changer for Cost and Economic Growth

One of the most promising strategies discussed is the localisation of solar manufacturing within African countries. By shifting production closer to the end-users, companies can significantly reduce costs associated with import tariffs, shipping, and supply chain delays—factors that often inflate prices and limit affordability. Beyond cost savings, local manufacturing has the power to create thousands of skilled jobs, foster entrepreneurship, and stimulate broader economic development. This approach not only makes solar products more accessible but also builds resilient local industries that can adapt to regional needs and drive sustainable growth. Investing in local production is a business strategy and a catalyst for economic empowerment and energy independence across the continent.

The Crucial Role of Political Commitment and Government Leadership

Equally important is the recognition that universal electrification cannot be achieved without strong political will and government involvement. History shows that no country has successfully electrified its population without decisive public sector leadership, clear policies, and targeted investments. Governments play a critical role in creating an enabling environment—through regulatory frameworks, subsidies, infrastructure development, and public-private partnerships—that can unlock private sector investment and ensure equitable access. 

Political commitment sends a powerful signal to investors and communities alike, aligning national priorities with sustainable energy goals. For the off-grid solar sector to thrive and reach the last mile, governments must be active partners, championing universal access as a fundamental pillar of economic and social development.

Looking Forward: A Vision for the Sector

The community’s consensus is clear: the path to universal access requires a fundamental shift in how we think about funding and business models. We must support viable companies, encourage innovation, and advocate for the subsidies and public funding necessary to reach the most vulnerable.

This is not just my opinion — it is the collective voice of a sector learning from its past and charting a more realistic, hopeful course for the future. If we embrace these lessons, I am confident that we can continue to drive progress, attract new investment, and, ultimately, deliver on the promise of energy for all.

The next chapter will require courage, creativity, and collaboration. But after this, I believe the sector is ready to write it.

The article was first published on the EDFI Management Company website