1. Install solar system

  2. System displaces diesel (verified via IoT telemetry)

  3. Displacement = carbon credits issued

  4. Sell credits to companies needing offsets

  5. Carbon revenue subsidizes upfront cost by 25-40%

  6. Lower cost = 4-5× larger addressable market

  7. More systems deployed = more carbon credits

  8. Repeat

It gets even better: there are people who will pay for credits beforehand.
British International Investment (UK’s DFI) pioneered this with SunCulture: they provided $6.6M in “carbon-backed equipment financing.” They bear the carbon price risk, SunCulture gets upfront capital, farmers get 25-40% cheaper pumps.

This is how it should be: The climate impact that was an externality is now a revenue stream. The global North’s carbon problem subsidizes the global South’s energy access.

A quick note on MRV
Okay, so you might know I have… issues with the carbon credit world, especially MRV(monitoring, reporting, verification). Here monitoring is IoT-based, the MRV costs are near-zero. No expensive field audits. The telemetry data proves the pump is running = proves diesel is displaced = proves carbon is avoided.

The carbon credit mechanism turns climate infrastructure into an asset class. Which means you can finance it at scale.

Btw this is how the largest forest of the US is now being financed:

Chestnut Carbon buys degraded farmland across the Southeast, replants biodiverse native forests, verifies long-term carbon removal, and signs long-dated offtake deals with blue-chip buyers like Microsoft. The company has acquired more than 35,000 acres, planted over 17 million trees, and aims to restore 100,000+ acres by 2030 with an expected 100 million tons of CO2 removed over 50 years.

Learn more here:

So: what now?

Why is the market concentrated? Because the full-stack is really fucking hard.

You need:

  1. Hardware manufacturing expertise

  2. Supply chain across fragmented markets

  3. Last-mile distribution (29,500 agents for Sun King)

  4. Mobile money integration

  5. Credit scoring models for the unbanked

  6. IoT/telemetry systems

  7. Customer service in 10+ languages

  8. Financing (equity, debt, securitization)

  9. Carbon market relationships

  10. Regulatory navigation across 40+ countries

Most companies can do 2-3 of these. The winners do all 10.

This creates massive barriers to entry and long-term moats. New entrants can’t just show up with cheaper panels. The moat is the full-stack execution.

​​Let’s do the math on how big this can get.

  • 600M people without reliable power in Sub-Saharan Africa

  • 570M smallholder farming households in Africa

  • 900M people in Africa use traditional cookstoves

And that’s just Africa. Add Asia (1 billion without electricity) and you’re north of $300B-$500B.

But here’s the thing: this massively understates the opportunity.

The solar system is the Trojan horse. The real business is the financial relationship with 40 million customers.

Because what you’re really doing is creating a digital infrastructure layer that enables:

  • Consumer lending (smartphones, motorcycles, appliances)

  • Livestock/agriculture financing

  • Insurance products

  • Healthcare delivery

  • Education services

  • Payment processing

So the actual TAM? It’s whatever the total consumer spending is for 600M people rising into the middle class.

Okay, let’s zoom out. What happens when 100M+ people get electrified through this model?

  • Kids study at night → higher test scores → better jobs

  • Adults work after dark → higher income

  • Farmers irrigate year-round → 3-5x yields → food security

  • Phone charging → mobile money access → financial inclusion

  • Refrigeration → vaccine storage → disease prevention

  • Refrigeration → Keep milk/meat eatable → reduced food waste No kerosene smoke → respiratory disease drops

  • Clean cookstoves → 600,000 fewer deaths/year from indoor pollution

  • Diesel displacement = cleaner air quality

But here’s the meta-point: This is the template for building infrastructure in the 21st century.

Not government-led. Not centralized. Not requiring 30-year megaprojects.

Instead: modular, distributed, digitally-metered, remotely-monitored, PAYG-financed, carbon-subsidized infrastructure deployed by private companies in competitive markets.

The 20th century infrastructure model was:

  • Centralized generation

  • Government-led

  • Megaproject financing

  • 30-year timelines

  • Monopolistic utilities

The 21st century infrastructure model is:

  • Distributed/modular

  • Private sector-led

  • PAYG financing

  • Deploy in days/weeks

  • Competitive markets

This is how things will get built going forward.

So what could go wrong?

Let’s start by making clear this is not a one size fits all solution:
PAYG solar works for households and smallholders. Doesn’t work for factories or heavy industry. This isn’t a complete grid replacement.

1. FX Risk Companies raise dollars, buy hardware in dollars, collect revenue in Naira/Shillings. Currency crashes can blow up unit economics overnight.

2. Political/Regulatory Risk
 Governments could impose lending restrictions, tariffs on solar imports, or subsidize grid/diesel to protect state utilities.

3. Default Risk
10% default rate is good but fragile. Economic shocks, droughts, or political instability could spike defaults.

4. Maintenance Complexity
Panels last 25 years, batteries 5 years, pumps break. Building service networks across rural Africa is expensive.

5. Carbon Price Volatility
Carbon credits crashed from $30/ton to $5/ton in 2024. If 25-40% of affordability comes from carbon revenue, price swings hurt.

6. Competition from Grid
What if governments actually build the grid? (Unlikely given economics, but possible with enough subsidy)

7. Supply Chain Bottlenecks

Port congestion, customs delays, tariff swings, China export controls, and last-mile logistics can delay installs, raise COGS, and tie up working capital.

Fun fact: Sun King is now producing their devices in Africa, cutting $300 Million in imports over the next years.

Okay, the bear case is important. But let’s talk about the scenarios where this doesn’t just work: it goes 🏒.

Solar panels dropped 99.5% in 45 years. What if we’re only halfway through?

Current situation:

  • China has 600+ GW of solar manufacturing capacity

  • Current global demand: ~400 GW/year

  • Overcapacity = price collapse incoming

What happens next:

  • Solar: $0.20/watt → $0.10/watt by 2030

  • Batteries: Another 50% drop as sodium-ion scales

  • Complete solar home systems: $120-1,200 → $60-600

A $60 entry-level system puts the addressable market at 2 billion people instead of 600 million. You’re not just electrifying rural Africa. You’re electrifying rural India, Bangladesh, Pakistan, Southeast Asia, Latin America.

Right now, these companies finance at 12-18% interest rates. What if Development Finance Institutions (DFIs) actually do their job?

The scenario:

  • World Bank, IFC, British International Investment create dedicated facilities

  • “De-risk” lending to proven operators like Sun King/SunCulture

  • Cost of capital drops from 15% → 5-7%

What this unlocks:

  • Monthly payments drop 30-40%

  • Addressable market expands by 200M+ people

  • Payback periods shrink from 30 months → 18-24 months

  • Companies can deploy 3-5x faster with better unit economics

This is literally what happened with microfinance when Grameen Bank proved the model. Billions in cheap capital followed.

Here’s what nobody’s pricing in: social proof at scale.

The flywheel:

  • Village A: 3 households get solar

  • Neighbors see: kids studying at night, no kerosene smell, phone always charged

  • Village A: 30 households get solar within 12 months

  • Next village over hears about it → sales agent swamped

  • Company expands distribution network to meet demand

What the data shows:

  • Sun King’s customer acquisition cost has dropped 60% since 2018

  • Why? Word of mouth. Referrals. “My cousin has one.”

  • In mature markets (Kenya), 40%+ of sales come from referrals

When 20-30% of a region has solar, it becomes the default. You’re not an early adopter, you’re behind. This is how mobile phones scaled in Africa. The tipping point creates exponential adoption curves.

The grid that never came turned out to be a blessing. While development experts spent 50 years debating how to extend 20th-century infrastructure to rural Africa, something more interesting happened: Africa built the 21st-century version instead.

Modular. Distributed. Digital. Financed by the people using it, subsidized by the carbon it avoids.

The solarpunk future isn’t speculative fiction. It’s 23 million solar systems, 40 million people, and a template for how infrastructure gets built when you’re not stuck defending the past.

Thanks to Jarek Dmowski for first spotlighting the companies in our monthly Follow the Money and for his perspectives, and to Aaron Kruse for the conversations that shaped this essay.