Norway-headquartered Otovo has secured €40mn to expand its rent-to-buy online marketplace for solar panels, as it seeks to cash in on booming demand from homeowners looking to slash their energy bills.
Otovo rents out solar panels and inverters at a fixed monthly cost, which includes all repairs and maintenance. The platform, currently available 13 European countries, uses satellite data and mapping information to calculate how much sunlight a section of your roof receives and the corresponding energy produced, as well as the size, shape, and specification of suitable rooftop solar products. Then it finds the best price and solar installer for the job in your area.
Between 2010 and 2020, the price of solar electricity dropped 89% to become the cheapest energy source in history. As gas prices soar, homeowners are increasingly looking to solar panels to increase their energy security, cut costs, and boost the value of their properties. Rooftop solar added 25 GW of capacity in 2022, 8 GW more than in 2021, according to industry body SolarPower Europe.
But even though solar panels are comparatively cheap, they still present a significant upfront cost. Currently, in the EU it costs roughly € 10,000 for a photovoltaic system capable of catering to the energy needs of a 3-bedroom house. Otovo’s rent-to-buy model looks to flatten this financial barrier.
The Oslo-based company now plans to use the fresh funding to ensure its path to reach profitability and to take the number one position in the European residential solar market, it said.
“The equity raise allows Otovo to aggressively pursue the opportunities given by an energy market in which the cost of building new solar energy is at an all-time low, traditional energy prices are rising and consumers are looking for ways to cut their expenses,” said Otovo CEO, Andreas Thorsheim.
The round was led by existing shareholders Å Energy, Axel Johnson Group, and Nysnø, the Norwegian government’s Climate Investment Fund.
This latest raise brings Otovo’s total funding to €231mn, according to Crunchbase data. The company went public in 2021 after listing on the Euronext Growth stock exchange.
From the top investors in this latest round, Nordic energy utility Å Energi was allocated shares worth 22.4mn, Axel Johnson Group for €8.7m, and the state climate fund Nysnø for €2.4mn.