Solar Rental Marketplace OTOVO Raises €40mn Funding

Norwegian solar startup Otovo has secured €40mn from its existing investors including Å Energy, Axel Johnson Group, and Nysnø, the Norwegian government’s Climate Investment Fund. The funding will help the firm expand its rent-to-buy online marketplace for solar panels, as it seeks to ride the strong residential solar market growth across the EU.

This latest fund raise brings Otovo’s total funding till date to €231mn based on Crunchbase data. The company was listed on the Euronext Growth stock exchange in 2021.

Business Model

Besides outright sales, Otovo’s seemingly simple yet untried business model involves renting out solar panels and inverters at a fixed monthly cost, which includes all repairs and maintenance.

The firm has remained focused on the European market with a presence across 13 European countries. Otovo claims to use  satellite data and mapping information to calculate how much sunlight a section of roof receives and projection on energy potential, besides the size, shape, and specification of suitable rooftop solar products. Post that, it taps its network of installers in the area to provide the solution that fits best for the house.

Post the Russia-Ukraine war, volatile gas prices have driven many European households to take matters into their own hands to manage their energy bills. Dropping Solar panel costs came at just the right time with a solution for many. Rooftop solar added 25 GW of capacity in 2022, 8 GW more than in 2021, according to industry body SolarPower Europe.

Otovo has simply made the decision time shorter by offering the rental option, considering the higher prices in Europe, and misgivings about the life of the panels among first time users.

For Otovo, the latest equity funding will support a push towards profitability with a larger portfolio, opening up further opportunities to raise debt to power future growth. “The equity raise allows Otovo to aggressively pursue the opportunities given by an energy market in which the cost of building new solar energy is at an all-time low, traditional energy prices are rising and consumers are looking for ways to cut their expenses,” said Otovo CEO, Andreas Thorsheim.