Solar energy (2024)

Germany is home to the two best-funded European startups in solar energy: Enpal and 1Komma5. The country’s dominance goes further than that: out of the 57 solar energy deals Sifted has tracked so far this year, Germany saw the most: 12. Spain came in second, with eight deals so far this year.

That said, on release of its 2023 results this year, German company Enpal flagged some headwinds for solar companies in the country. It said customer demand for photovoltaic (PV) panel installations dipped in the second half of 2023 amid high interest rates, inflation and a drop in fossil fuel energy prices.

Climate tech companies are increasingly turning to debt financing, and getting creative with the vehicles they use.

In March this year, Enpal raised a €1.1bn asset-backed security (ABS). It means that, when a customer signs a contract, Enpal will receive the entire worth of that contract upfront from the debt facility.

The customer’s loan will then be paid into special purpose vehicles (SPVs) held by the three banks, instead of with Enpal — meaning the debt does not sit on the German greentech's balance sheet.

In 2023, Enpal told Sifted it planned to then sell those SPVs to entities like pension funds, where it would be viewed as a stable ESG asset. Bloomberg reported in October that the first of those deals was likely to go ahead soon. Fellow German solar startup Zolar also raised an ABS debt facility, worth €100m, in April this year.

Getting panels on roofs requires a lot of workers. Adjacent to the solar market is a burgeoning cohort of companies aiming to train up installers.

German startup Smalt launched in April 2023 and recently raised €8m from General Catalyst; Berlin-based Montamo was founded in November last year; London-based Greenworkx was founded in late 2022; and Paris-based La Solive has been addressing the problem locally in France since 2021.

While some companies are working on installing existing panels, others are working on researching and developing the next generation.

The UK’s Oxford Photovoltaics, which has raised $125m from the likes of Equinor and Legal and General, touted a breakthrough in August: an ultra-thin material that could be applied to “almost any building” and deliver over 27% conversion efficiency. Conventional conversion is usually around 15-22%.

Holding on to breakthrough technology could be a challenge, however. Last year, Oxford Photovoltaics said the UK was the “least attractive” market in which to locate its new factory, and that it was more likely to list in New York or Hong Kong.