South African energy-fintech startup Sun Exchange has announced a pivot away from its original crowdsale model towards an institution-focused approach towards funding small-scale solar projects.
Launched in 2015, Sun Exchange started out as a peer-to-peer solar leasing platform that enabled anyone, anywhere in the world, to buy remotely-located solar cells that power schools, businesses and other organisations.
The startup built a community of more than 20,000 members across around 170 countries, and brought solar power to more than 90 high-impact organisations, including schools, farms, retirement homes, small businesses and NPOs, among others.
“The initial inspiration for Sun Exchange was rooted in the urgent need to address the climate crisis, and that remains a powerful motivator for us. However, we now also find ourselves playing a critical and unexpected role in responding to South Africa’s energy crisis. This has brought challenges and opportunities that are bigger and more urgent than we could have imagined in the early days. With a landscape that has so markedly changed in recent years, it’s become increasingly clear that for Sun Exchange to continue growing successfully and sustainably, we too must evolve,” the company said in a statement.
With this in mind, the company is shifting its focus entirely to full-service commercial solar power and energy storage project development, with all projects funded via a growing global network of corporate and institutional funders.
“This enables us to continue serving our core sectors of high-impact organisations including schools, retirement homes, NPOs and agriculture, while expanding into larger commercial and industrial projects as well. The incredible momentum we’ve seen since launching our corporate and institutional funder programme, clearly signals that this is the best path forward for Sun Exchange to continue making an impact with solar power,” the company said.
The statement said the pivot did come with challenges and “mixed emotions”.
“The most difficult part of this transition is that we’re moving away from the original crowdsale-based model, which has been core to Sun Exchange since its founding. It’s what allowed us to build a global community of solar power supporters and what established Sun Exchange as an innovative industry leader,” it said. “The crowdsale model is, unfortunately, no longer a viable business model for Sun Exchange.”
Since introducing its institutional funder programme at the end of 2022, Sun Exchange has partnered with Absa, Allotrope Partners, Cars.co.za, CVE, Energea, Hannover Re and Jaltech to fund solar projects. This growth in funding from institutions has stood in stark contrast to the decline in crowdsale demand over the last two years, which Sun Exchange attributes to the “complex confluence” of internal and external factors.
“Simultaneously, the unprecedented levels of load shedding in South Africa since mid-2021 have led to a spike in demand for battery-integrated solar projects from our end users. Compared to the standalone solar PV projects Sun Exchange focused on in the early years, storage-integrated projects require significantly higher capital expenditure and are difficult and slow to fund via crowdsales, leading to disruptions in development timelines and increased costs. Institutional and corporate funders, on the other hand, are able to fund entire projects at once in a defined amount of time,” the company said.
