Arnergy Secures $18 Million to Power 12,000 Homes with Solar by 2029 as Energy Costs Soar in Nigeria

Nigerian clean energy startup Arnergy has raised $18 million in fresh funding to scale its solar operations nationwide, aiming to deploy over 12,000 solar energy systems by 2029. The financing round—led by CardinalStone Capital Advisers with participation from Breakthrough Energy Ventures, British International Investment, Norfund, EDFI MC, and All On—comes at a critical time as rising fuel and electricity prices reshape Nigeria’s power landscape.

With this funding, Arnergy plans to transition from a direct-to-consumer model to a nationwide partner-led distribution strategy, targeting businesses and retail outlets beyond Lagos to reach more households in need of affordable power.

Subsidy Removal Pushes Nigerians Toward Solar Solutions

Following Nigeria’s petrol subsidy removal in 2023, fuel prices surged by nearly 500%, placing traditional generators out of reach for many Nigerians. At the same time, electricity tariffs have also climbed significantly, especially for higher-band consumers, forcing households and small businesses to seek alternatives.

According to Femi Adeyemo, Arnergy’s CEO and co-founder, this economic shift has changed how customers view solar energy.

“We used to market solar as a way to guarantee uninterrupted power,” he said. “Now, the biggest driver is cost savings.”

Lease-to-Own Model Powers Arnergy’s Growth

Arnergy’s lease-to-own model—which allows customers to spread payments over several years while eventually owning the system outright—has become the company’s fastest-growing product line. This model has now surpassed outright purchases, offering a lifeline to families trying to cut monthly power costs.

Adeyemo explained that households paying up to ₦200,000 ($125) per month for diesel or grid power can reduce their bills to ₦96,000 ($60) with Arnergy’s solar systems.

Between 2023 and 2024, Arnergy tripled its customer base under this flexible financing model and expects to quadruple that figure within the next year. While the company’s revenue is growing in naira terms, depreciation has affected dollar-based earnings, prompting it to explore partnerships that generate foreign exchange income.

Scaling Beyond Lagos and Into Francophone West Africa

Founded in 2013, Arnergy has already installed 1,800 solar systems across 35 states, delivering 9 megawatts of solar capacity and 23 megawatt-hours in battery storage. With its new funding, the company plans to reduce its dependence on direct sales and establish a network of distributors and retailers outside of major cities.

As part of its expansion strategy, Arnergy is also looking to enter Francophone West African markets, diversifying its revenue base while responding to similar energy challenges across the region.

Policy Uncertainty Could Undermine Sector Progress

Despite the promising growth, Nigeria’s evolving regulatory landscape could pose fresh risks. A recent proposal to ban imported solar panels in a bid to encourage local manufacturing has raised concern among industry players.

Adeyemo supports local manufacturing but cautions against hasty enforcement.

“We’re advocates for building local capacity,” he said, “but we can’t shut the door on imports before we’ve developed a strong industrial base. That could hurt the industry and the millions now relying on solar.”

Nigeria’s Energy Crisis is Fueling a Solar Renaissance

Arnergy’s success story highlights a broader trend in Nigeria’s energy transition. The clean energy sector is no longer driven by climate advocacy alone; it’s now a matter of economic survival. With consistent demand for solar solutions and increasing investor confidence, startups like Arnergy are becoming critical players in solving Nigeria’s energy crisis.

But to sustain this momentum, smart policymaking and infrastructure investments will be key.

“We have the momentum, the market, and now the capital,” Adeyemo said. “What we need next is policy clarity to take this transition even further.”