Off Grid Electric raises US$25 million to provide solar power to homes in Africa

Most of the solar deployed to date has been in wealthy nations in Western Europe, the United States and Japan, as a means to substitute dirtier sources of electricity. However, solar power holds huge promise for residents of the developing world, not only a means of clean power, but as a means of electrification.

To date, many of these efforts have been at a relatively small scale, and businesses from the developed world are challenged by working in an environment that is very different than that in their home nations.

At least one company seems to be meeting these challenges and scaling its operations to access this vast, mostly untapped market of the more than one billion people globally who do not have reliable access to electricity.

On Thursday, Off Grid Electric announced that it had raised US$25 million in a series C investment round, led by DBL Partners. Joining DBL are new and returning investors, including the private investment firm of Microsoft co-Founder Paul Allen and eBay Founder Pierre Omidyar’s fund Omidyar Network.

DBL Partners Founder and Managing Partner Nancy Pfund says that the company has a set of strengths that make it suited to this work.

“When we looked at the company, we saw the leasing model coupled with a real commitment to driving down costs, and also suiting the payment model to the Tanzanian and the African customer,” Pfund told pv magazine.

Pfund notes that the company’s leasing model was inspired by U.S. third-party-solar company SolarCity, where DBL was an early investor. “It is a monthly payment, it is done on the cell phone, which is how a lot of goods and services are paid for in Africa,” explains Pfund. “It is very in keeping with what citizens in these countries are doing already.”

The company’s mid-sized system is based on a 25-watt PV module and a 60 watt-hour battery, which can charge appliances such as cell phones, power radios and light the typical Tanzanian home from sunset to sunrise. This last application can be particularly important, as it helps families avoid the health and safety hazards of kerosene lights.

Pfund also says that deployment of solar is changing consumer behavior. “What they are seeing is that people start with that and figure out a way to pay for a bigger system,” says Pfund.

Off Grid Electric is based in Tanzania and California, and has signed a partnership with the Tanzanian government to power one million homes in the next three years. The company recently entered its second national market, Rwanda.