One of the key factors in getting more homeowners to switch to solar power is that solar power, as a business, is hard to come by, many businesses fail when they haven’t been able to to find the right balance between technology working as it should, providing services cost effectively, providing good customer service and managing their own overheads. Today, a startup that believes it has solved some of these issues is announcing a big fundraiser as it prepares to grow.
Enpal – a solar start-up from Berlin, Germany that uses AI for provisioning and installation of services, then a subscription-like model for owners to pay for it (you might even call it a model SaaS: solar-as-a-service) – raised 150 million euros ($ 174 million) from SoftBank Vision Fund 2.
The financing closes its Series C at 250 million euros ($ 290 million), including 100 million euros that Enpal raised earlier this year from investors including HV Capital and SolarCity co-founder Peter Bank. The investment values Enpal at 950 million euros ($ 1.1 billion) after payout, the company confirmed.
To date, Enpal has raised around $ 360 million in equity, along with another $ 406 million in debt.
The company has some 10,000 customers in Germany and its objective will be to continue growing in its home market, as well as to make its first efforts to expand to new customers. Ultimately, Enpal’s goal, said CEO Mario Kohle, is to make the use of renewable energy a realistic option for everyone and everyone.
“Our plan is to go beyond Germany because the climate crisis goes beyond our borders,” Kohle said in an interview. “We also believe that this little thing that we invented could also extend to electric mobility and community power distribution.”
Founded in 2017 with Viktor Wingert and Jochen Ziervogel, Kohle said the original idea was to create a new startup that could be more proactive in the face of the climate crisis. His previous business, a lead generation startup that he sold to private equity firm General Atlantic, had a number of clients from the solar market. Kohle loved what they were trying to do, but he saw them fail time and time again. He began to do research to understand why, and found that it was not solar technology per se, but all the barriers to its sale and efficient supply. The business model just didn’t work for most of them.
So that’s where Enpal – who is a hanger of “energy” and “buddy,” Kohle said – put all of his attention.
He first built an AI-based algorithm that allows users to take photos of their rooftops, and then uses computer vision and other techniques to determine the size and placement of the required facility. All part of the provisioning of the installation is done remotely, with technicians only visiting the house at the point of installation, which means faster service at lower cost.
From there, customers use an IoT application to measure their energy collection, storage (on lithium iron phosphate batteries also supplied by Enpal) and consumption, and to pay for services. They only pay for the energy used with the system, not for the panels themselves. Users who subscribe to 20-year contracts can purchase their panels for 1 euro at the end of this period.
While a number of energy-focused green technology companies in the market today focus on innovations in how to produce or consume less energy, or with less impact on energy. our environment, Enpal is part of an emerging group that relies on these innovations. , but are themselves more focused on how to make scaling these solutions more convenient and cost effective.
Another startup called Aurora Solar is tackling this problem as a B2B2C problem: In May, it raised $ 250 million in Series C earlier this year for technology that also uses computer vision (along with satellite mapping and other data), which it sells to solar companies to help them automate home installation designs and cost estimates, thereby reducing the enormous costs associated with it.
Moonshots, of course, come with risks. Aurora’s focus on selling software to the solar industry means that it does not control the entire business model and that its success depends on continuing to grow its customers (not failure). due to the many other challenges of running a solar business).
Enpal has a different kind of challenge, which is that he has to make sure he doesn’t find himself over-leveraged with the number of solar installations he has in the market subsidized by Enpal himself, with perhaps that these customers are not buying solar power as much as they planned to buy. And while you can argue that there are hundreds of tech companies out there that basically follow similar principles – any company that provides a device to a customer for the customer to pay for a service on that device – at an estimated cost of $ 15. 000 and $ 40,000 for a solar power system for a 2,000 square foot home, this hardware is usually two orders of magnitude more expensive than, say, a set-top box. This basic model of subsidizing panels is one of the reasons the company has taken on so much debt.
Kohle thinks the chances of it going wrong for the company are low just because the model is so compelling. The business is not yet profitable, but “we have had a positive contribution margin from the start” thanks to the SaaS model, he said. “It’s something customers pay for, and it means we have positive cash flow from the start. And what customers love is that they pay less and get a solar system for free.
Investors also seem to agree.
“Rising electricity prices and increasing demand mean that the adoption of renewables is quickly becoming mainstream,” Yanni Pipilis, managing partner of SoftBank Investment Advisers, said in a statement. “We believe that Enpal offers its customers an all-in-one solar solution, lowering barriers to entry for consumers. It’s great to work with Mario and the Enpal team to make more households energy independent.