Weekend reading: Money flows into rooftop solar



European rooftop solar continues to grow this year, with innovative companies raising capital to develop the market. It’s an encouraging trend that could accelerate the adoption of rooftop solar. pv magazine correspondent Valerie Thompson takes a closer look.

Rable, a Dutch developer of pre-installed solar systems for flat roofs, raised 2.5 million euros ($2.72 million) in May from Amsterdam-based private equity fund Rubio Impact Ventures and Energietransitiefonds, Rotterdam’s regional public fund.

It followed the growth capital of 28.5 million euros acquired by the Swedish sunroof. The largest investment in the first quarter was the EUR 215 million Series D cash collected by Enpal, a Berlin-based solar energy leasing company, according to consulting firm Cleantech for Europe.

All of these companies serve the growing residential and, in some cases, commercial solar segments. Notable recent investments are grouped by company type and listed in the tables below.

Recently funded installation developers

Company Founded The last round Amount (million €)
1Comma5° 2021 2022 200
42 watts 2021 2023 as
Ener Pact 2016 2023 2.6
Enpal 2017 2023 215
Envy 2017 2022 22.5
Quest 2021 2021 as
Otovo 2015 2023 **20
Samara 2022 2022 4.5
Solytic 2017 2023 2
Hero of the Sun 2020 2023 9.7
Sunvigo 2020 2023 12
Zolar 2016 2022 100

**Private investment of a listed company. Sources: Apricum, Cleantech for Europe, company websites, Crunchbase, Dealroom, pv magazine

Recently funded BIPV and roof innovators

Company Founded The last round Amount (million €) Notes
dhp technology 2015 January ’22 1.73 Retractable sunshade for commercial and industrial (C&I) customers
Exasun 2012 September ’22 9 Roof-integrated BIPV for residential and C&I markets
Over Easy Solar 2021 2022 Pre-seed Vertical PV for residential and C&I
Rable 2019 May ’23 2.5 Pre-installed PV for commercial and C&I
Roof. Sun 2016 March ’23 6:45 a.m Roof integrated BIPV for residential and C&I
Solarge 2018 March ’22 4 Light residential and C&I
Solarix 2016 February ’23 0.96 Colorful Frameless Modules (BIPV)
Roof 2013 January ’23 28.5 Roof-integrated BIPV for residential and C&I markets

Sources: Apricum, Cleantech for Europe, company websites, Crunchbase, Dealroom, pv magazine

Will investor interest continue? “My understanding is that the energy crisis led to a small mini-boom in startups responding to the need to manage household energy costs by increasing the self-consumption ratio,” says Jenny Chase, solar analyst at business intelligence firm BloombergNEF. “But what happens when high prices come down? It’s hard to tell the difference. Is there a long-term value proposition regardless of energy prices? Some startups are likely to be acquired by (paying) utilities to avoid developing software in-house.”

Jan Michael Hess, CEO of Startup Ecosummit, says that “high-quality companies that produce results can find new lead investors on the upside.” Up-rounds are fundraising exercises carried out by companies that have increased in value since the previous funding round. Referring to the German solar leasing business backed by Hess in 2020, he says that “Sunvigo managed to attract new lead investors (in April) based on this year’s growth and financial results.”

Startup competition for capital is reflected in investors’ efforts to buy shares in “the best companies”, Hess adds.

Julia Padberg, a partner at Amsterdam-based venture capital firm SET Ventures, notes “the downturn in capital investment over the past year in areas such as fintech (financial technology) and blockchain. But the energy is enduring. Our target companies and startups in other segments are reporting record quarters and results. The successful projects in our portfolio are actually raising significantly this year in and new investments are made steadily.

Energy in apartments

Bernd Arkenau is a director at Münster-based eCapital Partners, which is the first outside investor in German housing development provider Sonnen, which was acquired by oil major Shell in 2019. ECapital Partners was also the lead investor in 1Komma5’s Series A fundraising round in April 2022. Arkenau says solar energy has more reasonable to invest now than 10 years ago.

“Electricity is more expensive,” he says. “Consumers’ environmental awareness is greater than ever. They invest in electric vehicles, solar energy storage and heat pumps.

“(The 1Komma5 investment) fits our strategy of investing in founders looking for an advantage in fast-growing markets, and (the company) was founded by Sonnen alumni,” says Arkenau. “The Sonnen investment helped me learn about building technology teams and what to focus on in the solar market. It grew from 20 employees when we invested to 350 employees at the time of acquisition and has grown tremendously since then.

Sonnen now employs 1,000 people, according to its website.

Investments from earlier stages are also made. 42 Watt Company, a Munich-based online platform that supports homeowners planning energy renovations, has raised seed funding. “The goal is to reduce complexity for consumers,” says CEO Jörg Überla. “We’re still at the forefront of what homeowners can do to optimize energy use and costs.”

Berlin-based Solytic raised 2 million euros in a Series B funding round in March. Solytic and Berlin neighbor Kwest – a renewable energy installation software company – offer a complementary solution for small and medium-sized installers.

“Installers use unique workflows and are looking to digitize their processes with customer relationship management (CRM) software,” says Kwest CEO Robin Dechant. “Others are adopting Asana, monday(.com) and Excel, but it’s cumbersome,” he adds, referring to other workflow and project management solutions.

“We’re trying to build features faster because of current customer demand and potential customer requests,” says Dechant.

Sharp growth

Growing companies with lighter, more aesthetic or easier to install rooftop electric structures can raise capital from several types of investors. Swiss business dhp technology – which has developed a retractable solar “roof” popular with wastewater treatment plants – raised capital last year through crowdfunding and a loan from the state-backed Swiss Technology Fund.

“Financing growth is not a problem,” says dhp founder and CEO Gian Andri Diem. “We have delivered 16 Swiss and German projects since our third year of operation, with 35 more planned. But I would say that finding competent talent is a challenge. We have 29 employees and are currently recruiting.”

Lech Kaniuk, CEO and founder of Sunroof, which has installed 1,000 roofs in Sweden, Norway, Germany, Switzerland and Poland, raised capital from growth and impact investors. “We see sharp growth ahead,” he says, referring to the EU’s policy packages. “The Green Deal and RePowerEU initiatives and Europe’s long-term goal of energy independence make solar roofs strategically important.”

Exit signs

Maintaining the flow of capital to innovative companies in Europe also requires sales involving “exits”, typically through initial public offerings (IPOs) or acquisitions. “IPOs can work,” says BloombergNEF’s Chase. “Both Energy Solar Tech and Otovo are listed, but I think an acquisition is a more likely path for startups that demonstrate value.” Otovo listed on the Euronext Growth Oslo stock exchange at the beginning of 2021 and in January moved to Oslo Børs, which is also part of the Euronext Group.

Since 2019, several innovations have been acquired (see table below). Energy Solar Tech SA was listed on the Spanish stock exchange in December. SET Ventures has had several recent divestitures related to renewable energy, including Depsys, a Swiss grid technology company; GreenCom Networks, a German digital solar and storage company acquired by US microinverter and battery maker Enphase Energy; and Sonnen. “All these companies opened up the clean energy transition with innovative technologies,” says Till Stenzel, co-founder of SET Ventures. “We are proud to see them continue to reach new heights.”

From Ecosummit speech to procurement (2019-23)

Company Acquired The date of the contract
Installation Lichtblick/Eneco 2023
GreenCom Networks Enphase Energy 2022
Moixa Moon energy 2022
Faradian Reliance Industries 2022
DEPsys Kraken/Octopus Energy 2022
Ubitricity + Next Kraftwerke Shell 2021
GridX + Envello E.ON 2021
Thermondo Brookfield 2021
Fos4x Polytech 2020
Upward energy Octopus Energy 2020
Sonnen + Limejump Shell 2019

Source: Ecosummit

Founded in 2012, Depsys was acquired last year by the Kraken business of UK clean energy supplier Octopus Energy Group. “Depsys is an example of how investing in digital is seven hundred times cheaper for utilities than traditional physical network reinforcement,” says SET’s Padberg.

“My outlook on exits is positive, even in 2023,” says Andreas Schwarzenbrunner, partner at Speedinvest. “It is widely accepted that solar energy will be critical in terms of future energy supply. The prices of panels and systems will continue to fall. More business models will emerge. It is possible to raise large rounds in solar technology when the fundamentals are good. The technology risk is not the same as it was 10 years ago, because the module industry has ended for silicon electrical gigawatt-scale manufacturing.

Future possibilities

Speedinvest has three solar investments, namely Skyfri, a startup founded by former executives of Norwegian renewable energy developer Norsk Solar to optimize solar energy. Hero of the Sun; and Kwest. He sees opportunities in business-to-business (B2B) software and solutions to solve financial, operational, network and market expansion issues across the solar energy spectrum.

The maturing solar industry, characterized by the growth of all types of solar power generation capacity, creates demand for software, tools and solutions. “The first generation of solar companies in Europe were panel manufacturers with a very simple business model,” says Stenzel. “Now it’s about much more services and the software level in addition to that. It’s easier for a startup to enter the software side of the energy industry.”

“Specialist B2B software companies have a lot of opportunities to create added value with non-obvious digital solutions,” says Padberg.

David is a passionate writer and researcher who specializes in solar energy. He has a strong background in engineering and environmental science, which gives him a deep understanding of the science behind solar power and its benefits. David writes about the latest developments in solar technology and provides practical advice for homeowners and businesses who are interested in switching to solar.

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