Solar power rises again
With recent upheavals in the energy sector for Europe amid the war in Ukraine, Germany is trying to boost the EU’s energy security by reviving its solar industry.
Officials are starting to react with some urgency as the continent faces years of trying to move away from Russian fuel for power generation, and recent US climate legislation will add to the competition.
The Germany syndrome
Forward-thinking Germany has generally been ahead of the curve on green energy, with about 41% of its electricity generation from renewables, and about 10% overall from solar.
But the country’s solar manufacturing collapsed after a government decision a decade ago to cut subsidies, a move that undid much of the progressive work the country had made in environmental policies.
For instance, Europe once produced a quarter of global photovoltaic (PV) modules worldwide; it’s now at 3% while China is at 70% – and does it more cheaply.
“We are seeing how fatal it is when the energy supply is completely dependent on other actors. It’s a question of national security,” Wolfram Guenther, Saxony’s state minister for energy, told Reuters
Sunny news for investors?
Investment in Europe’s solar energy trade reached a huge USD $975m last year, according to data from Dealroom — and 2022 is on track to outshine that.
The biggest recent rounds were raised by 1Komma5 and Enpal, which are both focused on residential solar installation. 1Komma5, based in Hamburg, raised a €200m Series A in April this year, and Enpal raised a €150m Series C round at the end of last year.
But where are the fresh opportunities in the solar tech sector?
- Solar management software. HV Capital, a German VC, is a backer of Enpal. Maximilian Zoller, principal at the firm, says there’s a growing opportunity for investors to back software tools used to manage solar power plants.
- Agrivoltaics. Sometimes known as agrisolar, is the simultaneous use of areas of land for both food production and power generation, eliminating the competition for land use. Companies are working on things like see-through panels that allow crops to grow beneath them.
- Perovskite cells. There’s still work to be done on improving the efficiency of cells themselves, Heitmann says — and it’s something startups are working on.
- Cleaning and maintenance. There’s also an opportunity in backing cleaning and maintenance tech, says Camilla Mazzolini, cofounder of Planet Fund, part of the Founders Factory group.
- Recycling solar panels. If startups can figure out ways to recover the raw materials that go into photovoltaic (PV) cells, there is another big opportunity.
Our take
There are myriad and novel ways of financing solar tech and getting aboard a rejuvenated movement, that not only could alter the energy landscape but also offer significant returns for environmentally aware financiers
There is little doubt that Europe will need to find innovative and original ways to break its dependence on Russian oil and gas as soon as possible – so getting in on as many alternative methods of producing energy seems a safe move.