In Europe, the surge in electricity prices following Russia’s invasion of Ukraine made solar panels highly attractive. However, as prices have started to decline, solar installers are now spending more on marketing to draw in customers.
A successful strategy to gain more clients has been to offer financing options. However, small installers often lack the resources to finance new installations, which can cost tens of thousands of euros, leading customers to banks. The issue arises when these customers, while on their way to the bank, are contacted by competing installers, causing them to switch providers, explains Jodok Betschart, co-founder and co-CEO of Cloover.
Betschart, along with co-founders Peder Broms and Valentin Gönczy, realized that the solution wasn’t just better project-bidding software but also incorporating financing to allow small installers to provide loans directly. “In one conversation, installers get a real-time underwriting and credit decision,” said Betschart.
Their startup, Cloover, based in Europe, has created software that uses customer data to evaluate both their loan repayment capacity and their energy expenditure. Often, the monthly payment for solar panels is less than a typical electricity bill.
“Banks usually don’t take these energy savings into account,” Betschart noted. “We often can provide financing when a standard bank cannot.”
Recently, Cloover secured $108.5 million in debt financing along with a $5.5 million seed round led by Lowercarbon Capital, with participation from 9900 Capital and QED’s Fontes. The startup will manage the loans within a special-purpose vehicle funded by senior debt providers, while also covering a small portion through equity, Betschart stated.
Cloover charges installers a transaction fee for each loan and takes a percentage of each loan payment. Additionally, when they launch software allowing homeowners to sell energy back to the grid using their batteries, Cloover will take a cut from those transactions too.
The funding will be used to hire sales and customer success teams to train installers on using financing options for energy upgrades, said Betschart. Currently, the company collaborates with around 200 installers, though there are thousands more who could benefit from their service.
Providing small installers with access to financing is crucial for accelerating the adoption of eco-friendly technologies, according to Betschart.
“Local and SMB installers handle 85% of all renewable energy installations, including solar panels, energy storage, heat pumps, and energy management systems,” he emphasized. While large companies possess advanced platforms to evaluate customer finances, SMB installers require the same support to facilitate the energy transition.
