Enpal, 1Komma5° and Zolar have fought their way into the solar market. Now Neoom from Austria is challenging the startups worth millions. The special feature lies in the business model.
Neoom founder Walter Kreisel opens an office in Nuremberg. In the future he wants to work with German installation companies. Neoom
The fact that the solar market in Germany is already well occupied by startups such as Enpal, 1Komma5° and Zolar does not bother Neoom founder Walter Kreisel. He still wants to expand to Germany with his startup, which sells modules such as battery storage and e-charging stations to craft businesses. For a quick market entry, the Austrian had increased his Series B financing round of 25 million euros by another 16 million in May. The money came from a company in the Austrian B&C Group.
In addition to its headquarters in Freistadt and a branch in Zurich, Kreisel is now opening another office in Nuremberg. The entrepreneur employs around 300 people in total. Regarding the local competitive situation, the founder says: “I think there will be room in the market for two or three providers, maybe not for four.” Neoom sees Kreisel as having an advantage over the German solar unicorns. “The others only go to private customers, not to commercial customers,” argues Kreisel, who equips Ikea, for example. “We also consider the installation partners in the value chain, not the wholesalers. We take the margin away from them and give it to our partners.”
Car dealership concept: Neoom sells its own systems and software
The founder compares his startup model with a “car dealership” concept: Neoom sells self-produced solar equipment such as PV systems, power storage and wall boxes for e-cars to electrical companies, which install them at end customers. The partners earn by adding their expenses as a percentage to the purchase price. Customers can use an app to network their devices and thus control their energy consumption.
Use is free of charge for households that only own Neoom devices. If wall boxes or PV systems already exist from other manufacturers, the integration of the software costs five euros per month. Owners of e-cars can also market the CO2 they have saved through the startup. Neoom has created its own climate portfolio for this purpose and works with the Zurich startup Climeworks, for example, which filters CO2 from the air and sells it to industry.
CEO Kreisel is convinced that it makes more sense to cooperate with existing local companies that install solar systems on roofs. Competitor 1Komma5°, on the other hand, buys up electrical companies and modernizes them in order to bring them together on a digital platform. The startup is also setting up its own operations in countries such as Sweden, Finland and Italy.
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Kreisel believes that small companies lack the capacity to offer hardware, software and services at the same time. At the same time, installers wouldn’t have the marketing budget like big chains to get their attention. “With the customers who don’t have time to find out more, but want professionals, the craft business no longer has a chance today”. According to the founder, regional providers could play a trust advantage. He speaks from experience: “I was a craftsman myself,” says Kreisel, who began an apprenticeship in his parents’ business at the age of 15.
70 installation companies as partners
The founder criticizes competitor Enpal’s approach of renting out solar systems on a subscription basis. He thinks that the intentions of the investors who finance the photovoltaic systems are not transparent in the long term. He himself, who still holds the majority of his shares in the company, promises full-bodied: “As long as I am CEO at Neoom, my company will not be sold to an oil shack.”
To date, Neoom has been working with around 70 installation companies in Germany, with the start-up being the primary supplier for a third of them. The founder says that it was initially more difficult to convince local companies to work together. The Austrians asked more than 1,000 companies for a partnership. At the end of 2022, electricians still had full order books – the feedback: “Everything is going well, we don’t need anything.” The situation has changed in the meantime. With inflation and rising interest rates, more households would save. In addition, electricity prices went down again. “Electricians are sometimes only fully booked for two to three months,” says Kreisel. For this reason, companies would have joined Neoom in order to gain a competitive advantage.
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The major goal of all solar suppliers is to set up energy networks, “virtual power plants”, between solar generators in addition to building a solar infrastructure. Philipp Schröder’s startup 1Komma5° has developed its own tool called Heartbeat, which customers can use to sell stored but unused electricity on the market when the price is high. Conversely, they can buy electricity when prices fall. Neoom founder Kreisel offers the same to his customers in the app. “If you feed excess electricity into the grid, you’ll get 90 euros a month,” says the CEO.
Founder wants to start electricity trading in the neighborhood – Germany is lagging behind the EU rule
In addition, the Austrian wants to ensure that Neoom customers in Germany can also trade electricity with each other “in the neighborhood” in the future, without intermediary network suppliers earning money. The EU Commission has stipulated the joint use of renewable energies from January 2023 in a directive. The law is intended to counteract discrimination against electricity consumers and electricity producers. However, Germany has not yet implemented the regulation – in contrast to Austria. According to Neeom, it has set up 71 energy communities there with over 4,000 members who trade around the nearest substation via the solar power app. So far, its German customers can only pre-register for energy communities.
Kreisel assumes that it won’t be long before Germany follows suit – also to avoid fines from the EU. That’s why he wants to be present now, build partnerships – also with energy suppliers – and get “a DNA” here. “We’re just jumping into the trampoline now. And when Germany introduces the regulation, then we will only take off,” says Kreisel. This year, the founder wants to surpass the 100 million mark in sales – and more than quadruple it by 2026. After all: In 2022, the Austrian company generated sales of 55 million euros, at that time tripled compared to the previous year.
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