Solar panels virtually sold out in Europe after Russia’s invasion of Ukraine sent electricity prices skyrocketing. Now, so do prices began fallingSolar installers found themselves spending money more about marketing to attract customers.
A proven way to gain more customers is to offer financing. However, small businesses normally do not have the funds to cover the costs of new installations, which cost tens of 1000’s of euros each, forcing customers to go to the bank. The problem is that many customers switch installers “because they’re contacted by five other vendors on the way to the bank,” Jodok Betschart, co-founder and CEO of Cloover, told TechCrunch.
For Betschart and its co-founders, Peder Broms and Valentin Gönczy, the answer was not only higher project bidding software, but adding financing to help small installers do their very own lending. “In one call, installers receive real-time insurance and lending decisions,” Betschart said.
Their European startup, Cloover, has developed software that crunches customer data to assess not only their ability to repay their loans, but also how much money they spend on energy. In many cases, the monthly payment for solar panels will likely be lower than the amount someone pays on their electric bill.
“But the bank doesn’t actually account for these energy savings in its models,” Betschart said. “In many cases we can enable financing where a regular bank has found it cannot do so.”
To secure these loans, Cloover recently raised $108.5 million in debt along with a $5.5 million seed round led by Lowercarbon Capital with participation from 9900 Capital and QED’s Fontes, the company exclusively told TechCrunch. The startup will own the loans in a special purpose vehicle financed by senior debt providers and will cover a small portion of them with equity capital, Betschart said.
The company charges installers a transaction fee for each loan they take out, and also demands a percentage of each loan repayment. When Cloover introduces software later this yr that enables homeowners to use batteries to sell electrons to the grid, costs will even be reduced.
Cloover will use the funds to hire sales and customer support teams that can train installers on how to use the financing for energy retrofits, Betschart said. Today, the company cooperates with about 200 installers, although he added that 1000’s more could use its services.
Giving small installers access to finance should help accelerate the adoption of climate-friendly technologies, Betschart said.
“Eighty-five percent of all renewable energy installations, such as solar energy storage, heat pumps, energy management systems, etc., are performed by local and small and medium-sized company installers,” he said. Large corporations already have advanced platforms for assessing customers’ financial capabilities, he added. “The only way to achieve the energy transition is to offer SMB installers exactly the same options.”