Here comes the sun – why we invested in Sunvigo
By Ohad Mamann, Investment Partner Future Energy Ventures
Why is FEV interested in the residential solar market?
Innovative solar energy and storage solutions are amongst the best levers households have to decarbonize their energy supply, gain autonomy and contribute to the energy transition. The residential solar market as such represents both a great financial opportunity and has the potential to significantly decarbonize not only the households, but the wider electricity grid.
The building sector itself, including direct and indirect emissions, is accountable for one-third of global CO2 emissions, with 19% derived from the generation of electricity and heat used, according to the International Energy Agency’s (IEA) latest report, which represents a great opportunity for global decarbonization.
Not only does decarbonizing households represent an enormous opportunity, but the market itself is growing exponentially. With the European residential solar market valued at €32 billion in 2021 and projected to reach €63 billion by 2030 (8% CAGR), it’s a worldwide leader in implementing solar photovoltaic (PV) solutions. In addition, its total installed PV capacity reached 186 GW in 2021, 22% of the global PV stock, including 112 GW of rooftop systems (67% share in total).
The EU’s commitment to a cleaner energy future will only continue to drive demand for residential solar, with initiatives like REpowerEU planning to reach 320 GW capacity in the next five years, and the Paris Agreement requiring 870 GW of PV by 2030. However, supply-side challenges still limit faster and stronger growth, as consumers hesitate to bear the risk and effort of buying or renting solar hardware and operating it.
Despite these challenges, products and business models that enhance access to residential solar energy will benefit from this demand and supply gap. The recent energy crisis triggered by the Russian war against Ukraine has resulted in a steep increase in energy prices and raised consumers‘ interest in energy independence. We believe that the increased interest in energy independence at the consumer level is here to stay, even if energy prices eventually revert to the long-term average levels.
That’s why, after closely monitoring the European residential solar space, we decided to invest in Sunvigo, a company that offers a smart solar-as-a-service proposition for homeowners. Sunvigo designs, builds, and operates high-quality residential solar systems and connects it with battery storage, e-vehicle charging, to become a fully virtual green power plant.
We are excited about our partnership with Sunvigo, a young and dynamic company founded in Cologne, Germany in 2020 that has caught our attention with their innovative business model and impressive growth in the German residential solar market. In just three years, Sunvigo has built a robust organization and installed hundreds of systems, demonstrating their commitment to solving real problems for homeowners while making a meaningful contribution to decarbonizing our energy system.
We believe in Sunvigo’s potential and see an enormous opportunity in the residential solar market. The EU is already a leader in PV adoption, and with the US market entering the consolidation phase, we expect multiple companies to serve the EU market. Sunvigo’s smart solar-as-a-service solution is designed to democratize access to solar power for homeowners and maximize the value of distributed energy assets through a virtual power plant, providing maximum flexibility to customers.
Sunvigo’s impact on decarbonizing energy is also impressive, with their solar PV and storage system generating 11 MWh yearly and saving* tCO2e when compared to the German grid mix. Additionally, batteries help households avoid peak time consumption and reduce renewables curtailment.
Based on our projections, we estimate cumulative generation of 1 TWh of solar power within five years of investment, resulting in GHG emissions savings of 0.34 MtCO2e, equivalent to 60k people switching to electric vehicles.
What excites us the most is the people behind Sunvigo. With Dr. Michael Peters, co-founder and co-CEO, Dr. Vigen Nicogosian, co-Founder and co-CEO, and Mathias Lingnau, COO, we have found a talented and ambitious team with decades of experience in the energy industry, strategy consulting, and academia. With their leadership and expertise, and a team of 130 people, we are confident that Sunvigo will be a great success story, and we are honoured to embark on this journey with them.
*Assumes average carbon intensity of electricity mix stays constant.
 GlobeNewswire, Europe Residential Solar PV Panels Market Size, Share & Trends Analysis Report, 2022 – 2030 (Sep 2022)
 European Commission, REPowerEU: affordable, secure and sustainable energy for Europe (May 2022)