**How to crack energy transition funding - comments on Blackrock investing in Enviria**

#Enviria, a successful German scale-up in the commercial and industrial #solar solution business, announced an investment of 200 M USD (185M €) by #Blackrock yesterday. While not much is known yet about the details of the transaction, we believe that it may hold an important message about how to crack energy transition funding.

Funding the #energy transition is very capital intensive and requires infrastructure investors to come on board with full force. At the same time, driving innovation in energy still has a lot of venture character, with limited track record, significant speed of change, strong market swings and shifting profit pools along the supply chain. In short - all the challenges startups in new and evolving markets face.

A seemingly obvious solution is to combine corporate and venture funding with infrastructure money in new ways! And this is what Blackrock and Enviria may be doing here. The challenge: #venture investors don’t like #infrastructure returns and infrastructure investors don’t like #startup risk or most other risk associated with ”First-of-a-kind“(#FOAK) asset portfolios.

In our perception, the perspectives and incentive structures of corporate and infrastructure investors are often far apart, even within the same organization of institutional investors, so that deals such as Enviria’s are very rare. That has to change if we want to drive the energy transition faster than today.

As senior advisors we have been working on bridging the gap between #cleantech businesses with asset roll-outs and investors for a while now. This includes solutions for how to structure funding of First-of-a-kind portfolios. how to assemble the right mix of capital sources to enable innovation and scaling of new energy infrastructure.

As the details of the Enviria investment are not public, allow us to speculate a bit about the transaction. Wouldn’t it make sense if it was a combination of corporate equity for the platform together with flexible asset funding at asset or #SPV level, likely a combination of different capital layers? Financing should be made easy from the customer perspective by reflecting the complexity and mix of risks in a smarter funding structure. 

We also like this transaction because it is our strong belief that the commercial + industrial #cleantech space offers the biggest untapped opportunity out there. Making the energy transition easy for corporations is the most important value driver in this market. Well done, ENVIRIA and BlackRock. Well done Melchior Schulze Brock, Dirk Schmitz and your teams.

Watch this space ;-)

Tobias and Christian

🏭☀️ Growing Commercial and Industrial PV (C+I): How to crack the code? - Introduction

The commercial and industrial segment (C+I) of the solar market holds the biggest opportunity for growth. However, according to Solar Power Europe, this segment has grown slower than residential and utility #PV in recent years, representing 40% of all installations in 2020 and only 33% in 2023. This may sound surprising given the growing need for clean power in C+I, but there are good reasons for the lagging growth.

In the past, just putting PV on an industrial roof was often enough to satisfy a C+I customer. Perceived innovativeness, environmental aspects and financial return were key motives for installing #solarPV. Needs have changed and the key driver now is own consumption of solar PV energy and energy cost savings. But that doesn’t automatically open up the market.

Here are some thoughts to start you off:

1️⃣ C+I solutions are more complex technically. Every system is different. If you don’t build for large retail chains, which seem to have chosen their EPC partners for the long run, variety and complexity in system planning and design are higher.

2️⃣ C+I customers are often less sophisticated in understanding their energy profiles than one would expect. In the past, energy was one (albeit key) item of purchased service. Thinking in consumption and own production profiles requires a new level of understanding, measuring and planning inside these companies.

3️⃣ Understanding the commercial case: As a #developer, you now need to understand the integration of on-site PV into the customer’s energy load profile, ideally linking it to heating, cooling, process media and storage. Most importantly, the customer wants to understand and have confidence in the commercial case of solar power. Complexity and required competence grow. Not many developers have kept up.

4️⃣ Permitting, planning and project management are more challenging in C+I.

5️⃣ More parties involved: Often, the owner of the roof is not the user of the electricity. This adds complexity as the interests of building owner and user of the electricity are not aligned and agreements need to be reached (incl. typically financial compensation).

6️⃣ A Commercial „as-a-service“ PV portfolio could be highly attractive, but is missing „First-of-a-kind“ (#FOAK) #funding to build out the asset class. Investors have trouble understanding risk for such new portfolios and pricing them. For example: in comparison to retail solar, customers are now companies and not house owners – a different credit risk profile.

In the following 3 parts of this series, we will address the #customer perspective, the viewpoint of developers/#EPC ’s and the #investor angle of C+I. Our goal is to share our perspectives on how to grow the segment and how to be successful as a market participant and investor in the space. Follow us for more and don’t forget to comment and add your views. 

by •Tobias Schütt and Christian Langen

🔅🔅 Die Schere im Deutschen Solarmarkt geht weiter auf

#1KOMMA5 sichert sich bis zu EUR 100 Mio. über Bankendarlehen und gleichzeitig meldet einer der führenden Anbieter für PV-Anlagen, #Eigensonne, Insolvenz an (36e IN 7679/23 Amtsgericht Charlottenburg (Berlin) > https://lnkd.in/gHHNq4iw).

💡Was bedeutet das? Die erste Lesart von Christian Langen und Tobias Schütt:

1️⃣ Die erwartete Bereinigung im Deutschen Solarmarkt schreitet voran (siehe unser Post hier https://lnkd.in/gt5F9S8F). Es werden weitere Meldungen über Fusionen, Restrukturierung und Insolvenzen kommen, steht zu befürchten.

2️⃣ Spannend wird sein, was das für die Kunden von Eigensonne bedeutet, die sich ihre PV-Anlagen gemietet haben. Die Anlagen sind auf dem Dach und für die Kunden ändert sich erstmal nicht viel. Außer allerdings, sie haben ein technisches Problem und benötigen die Hilfe von Eigensonne bzgl. der Reparatur…

3️⃣ Eine größere Fragestellung dürfte sich für die Banken und Investoren von Eigensonne und den hashtag#Mietanlagen ergeben. Die großen strategischen Optionen sind:

▶️ grundsätzlich weiter wie bisher: Eigensonne macht weiterhin #Neugeschäft und macht #Service für die Bestandsanlagen. Frisches Geld und ggf. Kosten-/Schuldenschnitt wird hierfür erforderlich sein. Wie viele neue Kunden man so findet, ist leider fraglich (besonders für ein langfristiges Mietmodell).

▶️ nur noch #Service sprich Betreuung des bestehenden Kundenstamms insb. aus dem Mietmodell.

▶️ Beendigung des Kapitels Eigensonne.

❓Was ist wahrscheinlich? Schwer zu sagen, sicher ist jedoch, dass Banken und Investoren der Mietanlagen ein Interesse daran haben, dass der Service für die Eigensonne PV-Anlagen weiterhin reibungslos funktioniert. Anderenfalls sind die zukünftigen Einnahmen aus den langfristigen Verträgen in Gefahr. Ausserdem sollte sich trotz Insolvenz der Eigensonne-Eigentümer hashtag#EWE für eine Lösung verantwortlich fühlen.

Es wird spannend bleiben.