Green energy startup Arnergy secures $18 million to deploy 12,000 solar systems by 2029

Nigerian solar energy firm Arnergy has secured $18 million in fresh funding to expand its reach across the country as demand for clean and affordable power solutions continues to rise. The investment marks a significant step in the company’s bid to scale operations, with plans to deploy over 12,000 solar systems nationwide by 2029.

The growth comes as electricity costs and fuel prices climb sharply in Nigeria. Arnergy’s founder and CEO, Femi Adeyemo, says the country’s economic conditions have shifted public interest toward solar power, once seen as a backup option.

“When we started the business, we used to position solar as a way to get uninterrupted power, not necessarily to save money,” he said. “Now it is because we can clearly show customers how our systems save them monthly whether using petrol, diesel, or even the grid.”

Nigeria removed its long-standing petrol subsidy in May 2023, sending fuel prices soaring by nearly 500%. As a result, generators, long favoured for their reliability despite environmental concerns, have become too expensive for many households and businesses to operate.

In response, more Nigerians are choosing solar energy systems through financing options like Arnergy’s lease-to-own model. This allows customers to pay a fixed fee over several years, eventually owning the system outright. The company says this model is now its fastest-growing offering, overtaking outright purchases, which used to dominate revenue.

“Imagine paying ₦200,000 ($125) every month for power. With our product, that drops to ₦96,000 ($60). Over five years, it’s a no-brainer what you’ll save,” Adeyemo said.

Between 2023 and 2024, Arnergy tripled its customer base under the lease model and expects to grow that figure four to five times this year. In naira terms, revenue is rising, but foreign currency earnings have stayed flat due to the naira’s depreciation. To offset this, Arnergy is pursuing dollar-based partnerships and plans to expand into Francophone West Africa.

Since its founding in 2013, Arnergy has installed more than 1,800 solar systems in 35 states, generating a total of 9 megawatts in solar capacity and 23 megawatt-hours in battery storage. The company’s latest funding round was led by Nigerian investment firm CardinalStone Capital Advisers. Other participants include Breakthrough Energy Ventures, British International Investment, Norfund, EDFI MC, and All On.

To reach its target of 12,000 systems, Arnergy plans to shift from direct sales to a network-based approach, partnering with businesses and retail outlets outside Lagos to reach more customers.

Still, the company faces new policy risks. Last month, the Nigerian government announced it was considering a ban on imported solar panels, aiming to encourage local manufacturing. The proposal has drawn concern from industry players, who argue that Nigeria lacks the industrial capacity to meet demand.

While discussing local production, Adeyemo expressed caution against premature enforcement.

“We’re advocates for local manufacturing. But let’s build capacity before shutting the door on imports,” he said. “Otherwise, we risk doing more harm than good, both to the industry and to the millions of Nigerians who now rely on solar as their primary energy source.”

How economic pressures are fueling solar startup boom in Nigeria

The growth of the solar energy sector in Nigeria is no longer just about going green, as it is increasingly becoming a matter of survival for businesses and households facing steep energy costs.

With the removal of the long-standing fuel subsidy, petrol prices in Nigeria rose sharply. At the same time, electricity tariffs also surged, especially for those who enjoy a more stable power supply. In April 2024, rates tripled for certain categories of consumers, putting even more pressure on already stretched household budgets.

These changes have opened the door for a new wave of solar startups offering alternatives that are not only cleaner but now cheaper to run. Many customers are now returning to Arnergy to increase their solar capacity or switch entirely to off-grid. This growing demand is mirrored by the company’s rapidly expanding lease-to-own customer base and climbing revenues.

But the road ahead remains uncertain. Without stable government policy and infrastructure investment, solar’s rise could be stalled just as it gains momentum.

Adeyemo, however, urges patience.

“Let’s not throw the baby out with the bathwater,” he said. “We have the momentum, the market, and now the capital. What we need next is smart policy to sustain the progress.”