Grace Ashiru
SolarNow – once a poster child of Africa’s off-grid solar boom – has suddenly entered voluntary liquidation in Kenya. A May 2025 notice in the Kenya Gazette shows that SolarNow Services (K) Ltd (the Kenyan subsidiary) was put into a creditors’ voluntary liquidation by special resolution on 13 May 2025. A virtual creditors’ meeting is set for 27 May 2025 to appoint an official liquidator.
This formal step comes a decade after SolarNow helped bring affordable, pay-as-you-go solar to rural East Africa, and it has shaken local clean-energy circles. Investors, founders and sector watchers now wonder how an early mover – backed by global impact funds – failed to keep the lights on.
Early Rise of an Off-Grid Solar Pioneer
Founded in 2011 (with headquarters in the Netherlands), SolarNow began as a solar-home-system provider in Uganda. By mid-decade it was a major force in East Africa’s off-grid market. Its Uganda operation grew rapidly – by 2017 SolarNow reported dozens of branches and hundreds of staff.
An official campaign page notes SolarNow had sold over 37,000 solar systems since 2011 (reaching ~100,000 people) and employed about 900 people across 65 branches in Uganda and Kenya. Early on SolarNow also spread beyond Uganda: it had announced plans to expand “across Tanzania and Kenya” by 2017. In short, SolarNow rode the wave of explosive demand for clean energy in off-grid areas. Its entrance coincided with rising investor interest in PAYGo solar: Acumen and Novastar Ventures injected equity in 2014 to scale the business, and by late 2017 a Series B round (around $9M) led by Shell Ventures and Novastar vaulted the company forward.
Along the way SolarNow also raised debt financing (notably a SunFunder-arranged facility) to fund inventory and receivables. In all, by 2019 SolarNow had raised roughly $30 million across grants and deals.
Backers and a Unique Business Model
SolarNow’s model was built around lease-to-own financing. Customers typically paid for high-quality solar panels, batteries and appliances in affordable installments – often over 18–24 months – rather than one large upfront sum. This pay-as-you-go approach made solar accessible to rural families while giving SolarNow a steady stream of receivables. In practice, a household would receive a system (with lamps, battery and options like phone chargers or a TV) and gradually pay it off. As Energise Africa notes, “SolarNow’s Pay As You Go model enables customers to pay back the cost of the systems in monthly instalments”. SolarNow also emphasized service: it built a franchise network of local dealers, offered a two-year warranty, and installed its own technicians for maintenance. The financing side was taken seriously – in 2019 CEO Willem Nolens explained that SolarNow’s syndication structure was designed to keep the credit portfolio healthy and minimize fundraising burdens.
This pioneering model attracted many high-profile backers. Investors and donors included veteran impact funds and development agencies: Acumen and Novastar Ventures (initial equity investors), strategic corporate venture funds like Shell Ventures (lead in 2017), and dedicated solar financiers such as SunFunder (which provided multiple debt rounds).
Grants and aid also played a role: for example, SolarNow won a $145,000 USAID grant in 2020 for a solar project in Uganda refugee settlements, and raised a $740,000 grant from Mastercard Foundation in 2018. Even UK Aid showed up as a backer: a UK Aid match fund underwrote an Energise Africa solar bond in Kenya, providing £37.5K of matched funding to help finance SolarNow systems. In total, the company’s financial pedigree read like a who’s who of the energy-access world – heightening expectations that SolarNow would succeed.
Liquidation in Kenya: The Final Act
Despite that strong support and its earlier momentum, SolarNow’s Kenyan arm has now decided to wind up. The official liquidation notice makes this clear: “members of SolarNow Services (K) Limited resolved to liquidate the Company” via a creditors’ voluntary liquidation. Creditors have been formally invited to a meeting on 27 May 2025 at 10:00 a.m. (via video) to approve the process. At that meeting, shareholders have proposed appointing the Kenyan Official Receiver as the liquidator. In practice, this means SolarNow’s Kenyan operations will be shut down and its assets sold off to pay creditors. (No public statement has been issued by the company or its owners beyond the legal notice, but the Gazette confirms the key dates and parties involved.)
Operational and Market Challenges
Industry analysts point to a convergence of problems that likely did in SolarNow (Kenya) — problems familiar to all PAYGo solar entrepreneurs today. First, the macroeconomic environment has turned hostile. East African currencies (notably the Ugandan shilling and Kenyan shilling) have devalued sharply in recent years, making imported panels, batteries and parts much more expensive in local terms. At the same time, consumer inflation has surged, squeezing the purchasing power of SolarNow’s rural customers. In the words of a recent sector report: “there are some major shocks that are felt by the industry, such as high consumer inflation, high interest rates, currency volatility and dollar shortages”. In other words, payback periods and margins are under pressure as costs rise.
Second, the nature of off-grid solar sales is inherently capital- and labor-intensive. SolarNow had built a large distribution footprint (as noted, ~900 staff and 65 branches) to reach remote clients. But “last-mile” delivery is expensive and logistically difficult across rural Africa. Deploying and servicing systems in scattered villages drives up overhead, which in tough times can outpace revenues. The European Investment Bank has noted that off-grid solar specifically “tackles the ‘last-mile’ distribution problem” by bringing electricity to remote communities – implying high upfront costs for companies like SolarNow.
Finally, funding and credit pressures have intensified. After a decade of growth, global investment into off-grid solar has dropped sharply. According to GOGLA data, total off-grid solar funding fell about 30% in 2024 (from $425M in 2023 to roughly $300M), and startup capital plunged even faster. One industry analysis described this as a “global funding winter” for the sector. In short, it’s getting harder for companies to raise new capital or refinance old debts. At the same time, serving poorer customers on credit carries default risk, which rises when economies wobble. SolarNow tried to manage this with strict credit selection and financing structures, but even a healthy portfolio can sour under severe inflation or income shocks.
Putting this together, SolarNow (Kenya) appears to have been pinched from both ends: rising costs (inputs, logistics and staff) versus shrinking sales margins and credit risks. Its Kenyan unit likely burned through cash or could not service loans, making voluntary liquidation the only viable path. This is similar to other recent cases in the sector: “many markets across Africa are nascent” and have been hit by “macro headwinds”. In short, strong demand for solar now competes with tough economics.
Key Challenges at a Glance:
- Inflation and currency swings: High inflation and shilling devaluation have driven up equipment and financing costs.
- Last-mile costs: Reaching remote rural customers (installing and servicing off-grid systems) incurs heavy logistical expenses.
- Tighter funding: Global off-grid solar investment has slumped (∼30% drop in 2024), and a “funding winter” has made new capital scarce.
- Credit risk: Extended payment plans expose firms to defaults when economies falter; even SolarNow’s careful credit management was vulnerable.
Broader Implications for Africa’s Solar Startups
SolarNow’s fate is a cautionary tale for the clean-energy ecosystem. On one hand, its rise proved the promise of pay-as-you-go solar: millions of rural Africans gained electricity that would otherwise be unreachable. On the other hand, its liquidation underscores how fragile the economics can be when external conditions sour.
For investors and founders in the space, several lessons emerge. First, business models must account for high operational burdens: shipping hardware long distances, maintaining service teams, and supporting credit for customers. Second, companies need robust hedges or partnerships to absorb macro shocks (for example, currency hedges, local production, or public–private funding).
Third, the era of easy funding may be over: with private capital retrenching, startups may have to look to blended finance, debt restructuring or new aggregation strategies (such as pooling customer payment streams to attract investors) to survive. Indeed, reports now highlight “game-changing” aggregation platforms (like Solaris’ Bridgin) that allow smaller PAYGo firms to bundle payments for sale to large investors.
The SolarNow case also signals that investor expectations have shifted. Backers can no longer assume strong subsidy or revenue growth guarantees. Instead, they will scrutinize cost efficiency and resilience. If an early leader like SolarNow couldn’t sustain itself, emerging competitors (with thinner capitalization) face even greater risk. At the same time, the fundamentals haven’t vanished: millions still need off-grid power, and many firms remain profitable or break-even when conditions are right. As one report notes, demand for solar devices “remained robust” even through currency slides and inflation. So the opportunity is still there — but SolarNow’s liquidation is a stark reminder that tackling the “last-mile” and balancing fragile finances is not easy.
For clean-energy advocates, the takeaway is clear: the path to universal energy access in Africa will require more realistic expectations, better risk-sharing, and perhaps new models. SolarNow’s rise-and-fall paints a balanced but cautionary picture for the sector – one that investors, entrepreneurs and policymakers must heed if the off-grid solar revolution is to reach its full potential.
