I am a home energy installer.
South Africa's solar power market Home Energy plans to accelerate the adoption of rooftop solar power by improving access to financing for homeowners and installers, says co-founder and chief executive CEO) Tim Olsen said.
This comes after the company finally successfully completed seed funding totaling $8 million (R153.8 million).
The funding is said to be the largest seed round for a technology start-up in SA and was led by E3 Capital and 4DX Ventures. We attracted participation from new investors including Breega, E4E Africa, TO.org, Tekton Ventures, Sunu Capital, Mucha Ventures, and Climate Capital Ventures.
In an interview with ITWeb, Olsen revealed that the company raised a pre-seed round of $800,000 in 2022. The following year, the company raised a $3.7 million seed round, culminating in a $4.25 million investment by the end of 2023.
He said the funding will allow Home to expand its model. Additionally, we will strengthen technology, product innovation, and skills development for solar installers to make rooftop solar more accessible, reliable, and affordable for everyone.
“What we've realized in particular over the last year is that access to finance is more important to actually get more solar installations done, and we're asking homeowners and installers to get access to finance. is that there is still a lot of friction.
“What we are doubling down on and expanding this year is making access to finance more digital, more automated and more affordable so that more homeowners and installers have access to it. To make it affordable, to provide funding and help make those installations possible.”
Ohlsen points out that last year's load shedding was double compared to 2022, resulting in increased demand for solar power.
“Last year, the average price of a solar power system fell from R250,000 to R170,000 in 2022. This year, we predict that the average price of a system in our market will probably reach around R120,000 .
“This data point is [solar installation] is moving from being an ultra-luxury purchase that only the wealthiest households can afford to becoming more accessible and affordable for the middle class. So funding is now key.
“In previous market evolutions, many people used cash or available equity on a mortgage; We don't have equity. We need to make solar financing easily accessible to everyone so that any household in the country can actually finance solar.”
South Africa's solar power market exploded last year as rolling blackouts continued to severely limit economic growth and strain household budgets. The country endured a record 332 days of shedding in 2023.
Hohm Energy's marketplace helps customers go solar with certified solar installers and solar financing.
Hohm Energy, which describes itself as a climate fintech company, was founded in July 2021 by Olsen and Emil Grubegovic.
Helping homeowners and businesses go solar through certified solar installers, product suppliers, and built-in solar financing by providing an alternative, sustainable energy source to 7.7 million eligible households That's what I'm aiming for.
To date, Hohm Energy has used its solar PV proposal engine to generate over 17,000 custom solar roof designs, generating over $90 million (R1.7 billion) in financial applications for retail banking partners. I did. We count local retail banks as partners such as Investec, Nedbank, MFC, FNB, Wesbank and Capitec.
The company's name is a play on the word ohm, Olsen said, explaining that ohm also means friction in an electrical engineering sense.
“Home as a brand strives to eliminate friction for everyone when it comes to the broader solar power and clean technology category. We see this as a major new opportunity in the market and we are currently is about solar panels and batteries, but in the long term it will be about electric vehicles, insulation, energy-efficient lighting, smart home devices and green appliances.”
Regarding his motivation for founding the company, Mr. Olsen said: “We build automation tools, software-as-a-service tools, to make our own businesses more efficient, generate customized solar proposals faster, and explore different financial options. We decided to automate some of the workflows required when sourcing products and starting the installation of solar products.
“The decisive principles behind Home are to increase efficiency in the sector, support the installation of more solar power plants and reduce friction for everyone.
“We are a software company. We use a marketplace model to connect everyone to trade and we care for everyone we transact with, so we are not biased towards one side or the other, and the sector is growing. We are here to make that possible.”
Hohm Energy says the business is poised to achieve sustainable profitability within the current financial year.
Vladimir Dugin, Senior Partner at E3 Capital, commented: Hohm's technology-led approach puts us at the forefront of SA's green energy revolution.
“This team is uniquely positioned to create a ‘one-stop shop’ for all green solutions for residential customers and address existing energy supply challenges.”
Peter Orth, Managing Partner of 4DX, added: “We believe strongly in Home’s mission to accelerate the adoption of rooftop solar power across the Southeast and beyond, and we see similar businesses thriving in many markets around the world. I'm here.
“We believe Home is in the best position to bring this solution to SA.Given the state of the grid, this solution is desperately needed and the journey of Tim and his team We are excited to be able to assist at this stage.”
Olsen indicated that the company is looking to expand its platform, workflow and business model to serve South African households. He notes that while the company will focus on the local market for now, there are plans to expand to several different regions in the future.
“There are incredibly exciting opportunities around the world in renewable energy and rooftop solar…Solar power is exploding in terms of growth, and it's this energy that everyone is talking about. It's part of the transition and part of how we as a society solve climate change in terms of energy resources.”
“This is a unique opportunity in SA because load shedding is driving adoption and is a solar balm to what Eskom is causing in this country.
“Currently, we are focused on building the South African market and will probably continue to do so for the next year and a half or so. Over time, based on the way we have launched the business and the platform, We will definitely be expanding into multiple markets in and other emerging countries.”
Following the investment, the company will launch a home school program to train and empower local solar installers through the Home Energy Standard for solar system installations nationwide.
