Investor confidence in Nigeria’s clean energy sector reached a new high as Arnergy, the country’s leading solar startup, closed an $18 million Series B funding round to scale its solar solutions nationwide. This influx of capital comes amid accelerating demand for off-grid power following the removal of fuel subsidies in May 2023, which sent generator running costs soaring by nearly 500 percent. Arnergy’s innovative lease-to-own model has tripled its customer base in the past year, setting the stage for rapid expansion into underserved regions.
Demand for solar systems across Nigeria has skyrocketed over the last decade, driven by chronic grid unreliability and spiking petrol prices after subsidy removal raised pump prices from about ₦165 to over ₦1,000 per litre in some areas. Investors took notice, culminating in Arnergy’s recent $15 million Series B1 extension on top of last year’s $3 million tranche, bringing the round total to $18 million.
From Resilience to Cost Savings
When Arnergy launched in 2013, solar was pitched primarily as a reliability solution. Today, under CEO Femi Adeyemo’s leadership, the narrative has shifted to hard-dollar savings. Customers paying an average of ₦200,000 monthly for petrol-powered generators now see bills halved to roughly ₦96,000 with Arnergy’s systems, making solar not only cleaner but also more affordable than generators or even grid tariffs.
Arnergy’s Z Lite lease-to-own offering has become the engine of its growth strategy. While outright purchases accounted for 60–70 percent of revenue in 2023, lease-to-own rose to 75 percent last year. This shift reflects customers’ growing preference for predictable monthly payments over high upfront costs, especially as diesel and grid tariffs climbed in response to policy changes in April 2024. Arnergy tripled its lease portfolio between 2023 and 2024 and projects a 4–5 times increase in 2025.
To date, Arnergy has deployed over 1,800 solar installations across 35 states, delivering 9 MWp of solar capacity alongside 23 MWh of battery storage—a reduction of more than 23,000 tonnes of CO₂ emissions and the creation of over 1,200 direct jobs. The company aims to install more than 12,000 systems by 2029, using fresh funds led by CardinalStone Capital Advisers with participation from Breakthrough Energy Ventures, British International Investment, Norfund, EDFI MC, and All On.
Moving beyond Lagos, Arnergy is forging distribution partnerships and exploring dollar-denominated B2B2C deals to hedge against naira volatility. This push includes talks with banks and development finance institutions to back energy-as-a-service projects for large commercial clients, while eyeing expansion into Francophone Africa.
Policy Horizon and Local Manufacturing
Despite the upbeat momentum, Arnergy faces potential headwinds from a recently proposed ban on solar panel imports aimed at stimulating domestic manufacturing. CEO Adeyemo supports local production but cautions against premature restrictions that could stall the nascent industry. He advocates for a 3–5 year runway to build local capacity before curbing imports, ensuring the sector’s growth remains uninterrupted.
With capital efficiencies honed over multiple funding rounds, a proven lease-to-own model, and ambitious deployment targets, Arnergy is poised to lead Nigeria’s clean-energy transition. Its success underscores a broader shift in which sustainable power is no longer a luxury but a cornerstone of economic resilience and growth for millions of Nigerians.