German solar startup Enpal, fast becoming one of Europe’s best capitalised climate companies, has secured a new €430m debt investment, bringing its total debt financing to €1.9bn.
Enpal rents out green hardware, including solar panels and heat pumps, to consumers, helping them to avoid hefty installation fees. The company — recently ranked as the fastest-growing energy company in Europe by the FT — says customer numbers tripled to 30k in 2022, and that it’s hit profitability.
Enpal has previously raised equity — including a €150m Series C round from SoftBank. Now it’s hit profitability, Enpal is moving away from VC money and prioritising securing debt financing, it tells Sifted. The latest chunk of that comes from BlackRock, ING Germany, DWS and Phoenix Group.
Debt financing is a major pillar of Enpal’s model. When a customer signs up for a solar panel subscription — often for multiple years — they do so through a special purpose vehicle (SPV) owned by Enpal. That SPV is financed through debt. In the future, Enpal tells Sifted it could then sell those SPVs to entities like pension funds, where it would, Enpal says, be viewed as a stable ESG asset.
Enpal is part of a new breed of climate startup, building infrastructure and asset-heavy operations that require sources of capital beyond venture funding. Other examples include Swedish gigafactory startup Northvolt, which secured $1.1bn in debt last year.
Enpal’s products are currently only available in Germany but the company plans to expand into other European markets — though it cautions that expanding asset-heavy operations can take three to four years per country, in part due to regulatory hurdles.