Arnergy, a cleantech company in Nigeria, has seen significant growth in its solar energy business over the past decade, driven by the decline of grid reliability and increasing fuel costs. The company has recently raised $15 million in a Series B funding round, bringing its total funding to $18 million. With the cost of gas prices increasing by almost 500%, Arnergy’s pitch has evolved to focus on the cost savings benefits of solar energy, rather than just providing uninterrupted power.
Arnergy’s lease-to-own model, Z Lite, has become a major success, with clients paying set monthly costs for 5-10 years before purchasing the system. This model has seen a significant increase in popularity, with lease-to-own accounting for 60-70% of revenue in 2023, compared to just 25% in the previous year. The shift is attributed to the affordability of the lease-to-own option in relation to electricity rates, which was previously more expensive than operating diesel or gasoline generators.
The company’s founder and CEO, Femi Adeyemo, notes that the business no longer just positions solar energy as a way to get uninterrupted power, but as a way to save money each month, whether using the grid, gasoline, or diesel. Arnergy’s technology can clearly demonstrate to clients that it can save them money, making the economics of adoption more attractive.
The company’s success is also attributed to the elimination of Nigeria’s long-standing gasoline subsidy in May 2023, which has led to a boom in popularity for solar systems. With the increase in gas prices, power generators are now much more expensive to operate, making solar energy a more viable option. Overall, Arnergy’s growth is a testament to the increasing demand for solar energy in Nigeria’s power-starved economy, and its ability to adapt to changing market conditions.