Solar panels were all but sold out in Europe after Russia's invasion of Ukraine caused electricity prices to skyrocket, but now that prices have started to fall, solar panel installers are spending more on marketing to attract customers.
One proven way to win more business is to offer financing. But smaller entities typically don't have the capital to undertake new installations that can cost tens of thousands of euros each, forcing customers to go to the bank. The problem is that many customers change installers because “they get contacted by five other providers on their way to the bank,” Jodok Betschart, co-founder and co-CEO of Cloover, told TechCrunch.
For Betchart and co-founders Peder Bloms and Valentin Gonzzi, the answer was not just better project bidding software, but also adding funding to help smaller installers provide their own financing. “With one conversation, installers get real-time underwriting and credit decisions,” Betchart said.
Their startup, Europe-based Clover, has developed software that takes in customer data and assesses not only their ability to repay loans but also how much they're spending on energy — in many cases, the monthly payment for solar panels is less than their electricity bill.
“But banks don't really build these energy savings into their models,” Betchart says. “We're often able to make loans possible where a regular bank would say they can't.”
To underwrite those loans, Cloover recently raised $108.5 million in debt, on top of a $5.5 million seed round led by Lowercarbon Capital with participation from 9900 Capital and QED's Fontes, the company told TechCrunch exclusively. The startup will hold the loans in a special purpose vehicle that it raised funds through senior creditors, some of which it will cover with equity, Betschart said.
The company charges installers a transaction fee for each loan, plus a percentage of each loan repayment, which it will also collect when Clover rolls out software later this year that will allow homeowners to use their batteries to sell power back to the grid.
Clover plans to use the funding to hire a sales and customer support team and to train installers on how to access financing for energy upgrades, Bettsart said. Currently, the company works with about 200 installers, but there could be thousands more that could use its services, he added.
Betchart said giving small installers access to financing should speed up the adoption of climate-friendly technology.
“85% of renewable energy installations, such as solar energy storage, heat pumps and energy management systems, are done by local and small business installers,” he said. Big companies already have sophisticated platforms to assess the financial capabilities of their customers, he added. “The only way to make the energy transition happen is to offer the exact same options to small business installers.”