The solar panel industry in Europe saw a surge in demand after Russia’s invasion of Ukraine caused electricity prices to soar. However, as prices have started to decrease, solar installers are finding it more challenging to attract customers and are having to spend more on marketing efforts. One effective strategy to win more business has been to offer financing options. However, smaller installers often lack the resources to underwrite new installations, forcing customers to seek out loans from banks. This poses a problem as customers often get contacted by multiple providers on their way to the bank, leading them to switch installers.
Recognizing this issue, the founders of Cloover – Jodok Betschart, Peder Broms, and Valentin Gönczy – developed a solution that combines financing with real-time underwriting and credit decisions. Cloover’s software analyzes customer data, assessing their ability to repay a loan and their energy spending habits. In many cases, the monthly payment for solar panels is lower than the customer’s electric bill. Traditional banks often overlook these energy savings when evaluating loan applications, making it difficult for customers to secure financing. Cloover fills this gap by enabling financing where banks would typically decline.
To underwrite these loans, Cloover recently secured $108.5 million in debt financing and a $5.5 million seed round. The loans will be owned by a special-purpose vehicle financed through senior debt providers, with Cloover covering a small portion through equity. The company charges installers a transaction fee for each originated loan and also takes a percentage of each loan payment. Additionally, Cloover plans to introduce software later this year that allows homeowners to sell excess energy from their batteries back to the grid, further expanding its revenue streams.
The funding will be used to hire sales and customer success teams to train installers on how to utilize financing for energy upgrades. Currently working with around 200 installers, Cloover aims to reach thousands more who could benefit from their service. By providing small installers with access to financing, Cloover hopes to accelerate the adoption of climate-friendly technologies.
According to Betschart, 85% of all renewable energy installations, including solar energy storage, heat pumps, and energy management systems, are carried out by local and small-to-medium-sized installers. These smaller businesses lack the sophisticated platforms that larger companies possess to assess customers’ financial capacities. To achieve a successful energy transition, Betschart emphasizes the importance of offering the same financing options to SMB installers. By empowering these installers with financing capabilities, Cloover aims to drive widespread adoption of renewable energy solutions and contribute to a sustainable future.
