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In an insightful interview with SolarQuarter Africa, Femi Adeyemo – Founder & CEO, Arnergy gave us interesting facts about the company’s background and successful contribution to the industry. He also gave us insights into the challenges and opportunities for solar in West Africa and Arnergy’s growth and expansion plans.
Can you give us a bit of background about your company? What was the aim and vision when you first started this company?
I founded Arnergy in 2013 and it’s now the leading renewable energy company in Nigeria delivering reliable and sustainable solar energy solutions for SMEs, large businesses and homes. We launched with a mission to deliver energy solutions for productive use at scale. We do this by deploying products, services and systems that power homes and business operations and improve economic outcomes for our clients.
Arnergy leases and sells solar energy systems -solar panels that are connected to lithium batteries that essentially serve as solar-powered generators and power storage. The technical equipment is accompanied by a proprietary software platform, called SolarBase that allows clients to monitor and control their energy usage in real-time.
Due to frequent and consistent interruptions in Nigeria’s national electricity grid, there is a growing demand for energy providers that could leverage clean, off-grid energy solutions to provide a sustainable, uninterrupted and reliable source of electricity. Nigerians spend around $14bn annually fuelling petrol and diesel generators, an energy source that is neither cheap nor environmentally friendly. These challenges could no longer be ignored, Arnergy was left with no other choice than deploy innovative products and solutions for Nigerians.
In 2019 Arnergy raised $9million in a Series A financing round, which was led by Bill Gates’ Breakthrough Energy Ventures, with participation from the Norwegian Investment Fund for Developing Countries (Norfund), EDFI ElectriFI and All On. This funding allowed Arnergy to scale, targeting more businesses and households to adopt our solar energy solution.
Arnergy’s aim since inception has been to ensure that solar energy becomes a critical part of Nigeria’s energy transition, away from a dependency on fossil fuels to create growth and development as part of a sustainable and green economy. Through targeting reliability and the productive use of energy, Arnergy believes that solar solutions can fill the energy gap in the market and can power Nigeria and Africa and other emerging markets into a sustainable future.
A word about your recent successful contributions to this industry?
Arnergy’s solar energy systems have proven to be an extremely suitable solution for a wide range of business, commercial and household energy needs, across urban and rural areas in Nigeria.
In 2019, we built a custom containerized solar energy solution for the Kolo Hospital Modification Project financed by Shell in partnership with General Electric. Arnergy deployed a 40kWp rooftop solution with a storage capacity of 180kWh. The guaranteed electricity supply renewed the confidence of all stakeholders in the hospital’s ability to deliver quality service.
A major obstacle to socio-economic growth within rural communities in Nigeria is the lack of access to internet and mobile connectivity, compounded by unreliable electricity supply. Arnergy launched Ruralbase, a IP65 rural telephony product that powers cell towers across rural regions in Nigeria. Through its Ground/Pole Mount System, developed in-house, Arnergy was able to establish electronic communication devices deployed to remote areas across the country in a very cost and energy-efficient manner.
What are the current challenges and opportunities in the solar sector in West Africa? How can these challenges be faced?
With average sunshine of 6 hours per day, solar energy across West Africa is an extremely viable way for the country to meet its electrification and sustainability targets. However, in order to achieve those targets, there are still some challenges the region’s energy sector has to overcome.
Arnergy works closely with the Nigerian government and the Rural Electrification Agency and is extremely supportive of the efforts that they have made in recognizing the importance and the potential of solar energy in the country. Initiatives such as the ‘Willing Buyer Willing Seller’ scheme point to encouraging signs that there are proactive steps being taken to reduce reliance on the energy grid and to decentralize power generation.
However, across Africa, the legal and regulatory frameworks around the renewable and solar energy sector must be more conducive to attracting large-scale investment into the industry. The creation of an investor-friendly ecosystem for solar energy and renewables, in general, should accelerate solar adoption across the continent.
There is also a need for increased education around the benefits of solar energy so that local players like Arnergy can fill the capacity gap in the market. During the early years of Arnergy, a lot of time, effort, and energy were spent convincing customers about the viability of solar. Although we have made great strides over the last few years, with our education efforts being spearheaded by the fact our customers save 25% of their energy costs in comparison to spending on diesel generators, much more awareness around the benefits of solar would be extremely beneficial in addressing any remaining skepticism.
One of the ways to increase awareness around solar energy in the region is to highlight the progress of indigenous companies like Arnergy within the industry. Arnergy has a focus on increasing the local production, assembly, and servicing of solar energy equipment. Reducing the dependency on importing technology and resources has led to reduced costs and improved customer service for customers across the region.
The rollout of Arnergy’s RuralBase solution is a testament to the benefits of increased awareness around local players that understand the unique challenges of the region’s energy issues.
How do you see your company contributing to the clean energy sector in Africa in the next couple of years? What are your plans for expanding your services in the region?
Our immediate plan is to continue rolling out our solar energy solution across Nigeria. We have already built up an impressive client list, some of whom are also our partners including Shell, KPMG, and CitiBank.
We will leverage our network and further funding rounds, to continue driving solar adoption across our three main customer audiences; telecommunication, commercial and enterprise, and residential. We plan to have at least 35,000 businesses and 15,000 homes energized with solar energy over the next few years.
As we grow and expand further, we believe that our solar solutions can have a pivotal impact on emerging markets across Africa and beyond. The growing ecosystem for solar and other clean technologies within Africa provides a platform for businesses like Arnergy to grow rapidly and sustainably, laying down the foundations for a regional and even global presence.
Lastly, how do you see the solar sector progressing in the African market in the next 5 years?
We are seeing an increased investment into decentralized off-grid solutions and we are confident that solar energy will be able to lead that charge to transform the energy future for Africans and wider markets. Rapid innovation within the sector coupled with increased investment into indigenous solar energy providers across emerging markets, such as Arnergy means that solar energy systems will become an even more affordable option for customers. As the economic viability of solar strengthens, Arnergy expects the adoption of solar energy to mirror the telecommunications boom of the early 2000s.
For emerging countries to become industrialized nations they need 100,000 megawatts of electricity for every 1 million people. As an example, currently, Nigeria can only supply about 4000 megawatts – that’s why homes and businesses have resorted to fossil generators which are expensive, polluting, and unsustainable. We see solar energy rapidly developing across markets that have a fragmented energy sector to address the critical energy issues that are holding them back from realizing its full potential.