Enpal, one of Europe’s best-funded climate tech startups that loans or sells solar panels and other home energy tech to consumers, saw its gross revenues increase by 118% in 2023, according to its latest audited accounts published today.
Earnings rose from €415m in 2022 to €905m last year. Its operating profit, or adjusted EBITDA (earnings before interest, tax, depreciation and amortisation), decreased from €22.5m in 2022 to €21.4m in 2023. Enpal declined to provide net income figures, and declined to comment on losses.
2023 was a challenging year for German solar companies; customer demand for photovoltaic (PV) panel installations dipped in the second half of the year, according to Enpal, amid high interest rates, inflation and a drop in fossil fuel energy prices.
Meanwhile, the company says that changes in the regulatory landscape in Germany over the last year, such as failed attempts to subsidise solar, have proved destabilising.
The e-car subsidy programme, for instance, offered a windfall of up to €10.2k for homeowners with electric cars to install a PV system and a charging station. But the scheme was scrapped less than 24 hours after launching, due to high demand exhausting the programme’s funds, raising questions in the German press about the effectiveness of one-off subsidies to enable the shift to green energy.
“What we see is that the PV market is substantially down," says Enpal CFO Jochen Cassel, adding that there have been 30% fewer PV installations in the small systems segment in 2024 compared to 2023.
"And that’s why this year… is a year of transformation and consolidation in the German (solar) space, and that’s what our 2024 is all about."
Debt-fuelled climate tech
Enpal is backed by VCs including SoftBank, HV Capital and Picus Capital. After raising a series of equity rounds, Enpal started to secure debt from investors including BlackRock, ING Group, Bank of America and Barclays. Its latest debt raise, in March this year, was worth €1.1bn.
Founded in 2017, Enpal is part of a growing number of companies in Europe providing energy-saving technologies to households. Others include 1Komma5, also from Germany, and Aira, which is based in Sweden but has operations in the UK, Italy and Germany.
Outlook for 2024
Enpal says 2024 will be a big year of investment.
Enpal has been transforming its offering from solely supplying PV systems to creating a package of products for its customers, including batteries, electric vehicle chargers, heat pumps with connecting apps and tech services.
The company has plans to invest especially heavily in its heat pump business this year. In 2023, it installed 1,000 heat pumps and expects to increase that number to up to 5,000 by the end of the year. Enpal also recently opened a Heat Pump Academy to train up workers to install heat pumps, of which there is a shortage in Germany.
Cassel says that its heat pump business is likely to be as profitable as its PV business on a unit economics basis.
For the rest of the year, Enpal says it will continue to invest in new lines of business — including selling hardware to external installers and offering them services such as grid connection. It also plans to scale internationally after entering the Italian market last year.
This article has been updated to clarify that Enpal loans or sells solar panels and other energy tech, rather than leases them.