Enpal Secures $174M Series C Funding from SoftBank for Solar Tech

Addressing Barriers to Solar Energy Adoption

A significant impediment to wider adoption of solar energy has historically been the inherent difficulty in establishing a successful solar business. Many companies have encountered challenges balancing effective technology, cost-efficient service delivery, strong customer support, and manageable operational expenses.

Today, Enpal, a Berlin-based solar startup, is announcing a substantial funding round, confident that it has overcome several of these obstacles and is poised for expansion.

Enpal's Funding and Valuation

Enpal utilizes artificial intelligence to streamline the provisioning and installation of solar systems, offering a subscription-based model for homeowners – essentially, solar as a service. The company has secured €150 million ($174 million) in funding from SoftBank Vision Fund 2.

This investment completes its Series C funding round at €250 million ($290 million), building upon a previous €100 million investment earlier this year from investors including HV Capital and SolarCity co-founder Peter Rive.

The company’s post-money valuation now stands at €950 million ($1.1 billion), as confirmed by Enpal.

Financial Overview and Growth Plans

To date, Enpal has raised approximately $360 million in equity, supplemented by $406 million in debt financing.

Currently serving around 10,000 customers in Germany, the company intends to continue its growth within its domestic market and initiate expansion into new territories.

CEO Mario Kohle articulated Enpal’s overarching goal: to render renewable energy a viable option for all individuals and organizations.

Expanding Beyond Germany

“Our strategy includes extending our reach beyond Germany, recognizing the global nature of the climate crisis,” Kohle stated. “We envision our innovative approach expanding into e-mobility and community-based energy distribution as well.”

The Genesis of Enpal

Founded in 2017 by Mario Kohle, Viktor Wingert, and Jochen Ziervogel, Enpal originated from a desire to proactively address the climate crisis.

Kohle’s prior venture, a sales-lead-generation company acquired by General Atlantic, served numerous clients in the solar sector.

He observed recurring failures within these businesses, attributing them not to the solar technology itself, but to inefficiencies in sales and provisioning processes. The conventional business model proved unsustainable for many.

AI-Powered Provisioning and Subscription Model

This realization led to the creation of Enpal – a blend of “energy” and “pal” – with a focused approach on resolving these challenges.

The company developed an AI-driven algorithm that analyzes roof images using computer vision to determine optimal installation size and positioning.

This remote provisioning process minimizes on-site technician visits, resulting in faster service and reduced costs.

Energy Monitoring and Service Package

Customers utilize an IoT app to monitor energy generation, storage (using lithium iron phosphate cells also provided by Enpal), and consumption, as well as manage service payments.

Rather than paying for the energy consumed, customers pay a rental fee for the solar panels and a comprehensive service package encompassing installation, maintenance, repairs, and insurance.

Customers commit to 20-year contracts, with the option to purchase the panels for a nominal 1 euro at the contract’s conclusion.

A New Approach to Green Tech

While many green-tech companies concentrate on energy generation or consumption reduction, Enpal distinguishes itself by focusing on scaling these innovations efficiently and profitably.

Comparison with Aurora Solar

Aurora Solar, another startup addressing scalability, operates on a B2B2C model. It raised $250 million in Series C funding for technology utilizing computer vision, satellite mapping, and data analysis to automate home installation designs and cost estimates for solar companies.

Challenges and Risks

Scaling ambitious ventures carries inherent risks. Aurora Solar’s success depends on the continued growth of its solar company clients.

Enpal faces the challenge of managing a potentially overleveraged position with numerous subsidized solar installations, dependent on consistent energy consumption by customers.

The hardware-intensive model – with solar power systems costing between $15,000 and $40,000 for a 2,000-square-foot home – necessitates substantial debt financing.

Positive Contribution Margin and Investor Confidence

Kohle remains optimistic, citing the compelling nature of the subscription model. While not yet profitable, the company maintains a positive contribution margin due to the SaaS structure.

“We are cash-flow positive from the beginning, as customers are paying, and they appreciate receiving a solar system at a reduced cost,” he explained.

SoftBank's Perspective

Yanni Pipilis, managing partner for SoftBank Investment Advisers, commented, “Rising electricity prices and increasing demand are driving mainstream adoption of renewable energy. We believe Enpal provides an all-in-one solar solution, lowering barriers to entry for consumers. We are excited to partner with Mario and the Enpal team to empower more households with energy independence.”

Correction: The article has been updated to clarify that customers pay a flat monthly rental fee, not a usage-based rate.