Palmetto gets $20 million credit line for its solar and energy efficiency installation marketplace
For homeowners that want to go green, but have trouble figuring out how to do it, Palmetto Clean Technologies has the answer.
The company has an army of salespeople to pitch the benefits of solar power and energy efficiency, and will connect would-be clean energy consumers with financing options, installers, and software to monitor and manage their equipment.
What Palmetto lacked, until the new $20 million credit line it has received from the utility-backed investment firm, Energy Impact Partners, is a way to smooth its revenues while it fronted the costs of solar panel acquisitions and installation.
“One of the big problems that we’re solving for in our industry is the Chinese wall between project finance and corporate finance,” says Chris Kemper, the company’s chief executive.
With the new money from Energy Investment Partners, Kemper says that the company will be able to manage project installations and the inherent cash flow issues that need to be solved.
Kemper says that Palmetto has managed to solve a few key problems for consumer-facing clean energy installations.
Consider the company the Avon of clean energy. The company has representatives who go out and pitch consumers on the benefits of clean energy, they negotiate a price for installation with their clients and help customers sort through financing options and local installation needs.
“We make our money by a very thin margin by way of improving and scaling these workflow processes,” says Kemper.
Indeed, behind the salesforce is Palmetto Clean Technology; providing logistics and infrastructural support, information on clean energy’s benefits, and a bundle of software tools that customers can use to manage and monitor how their solar installations are operating — and ideally saving them money.
“We’re the first platform company in the residential clean technology space and our emphasis is to bring the ability to start or become an entrepreneur in this sector,” says Kemper. “[And] we manage cash-out and cash-in.”
The sales force that Palmetto employs negotiates their own prices with customers, while Palmetto makes what Kemper calls a small margin on connecting solar power project financiers, installers, and equipment providers with potential customers.
“It’s very complex workflows.. You’re dealing with local and state licenses and deal with local utilities. We streamline those complexities for the sales and build partners as well as the homeowner,” says Kemper.
The main thing that Palmetto solves for, says Kemper, is the cost of customer acquisition. It’s still very hard for installers and financiers to reach the broad swath of homeowners that are ready and willing to install solar power on their homes.
“We’re trying to build a business model for subsidy-free, credit-free clean energy,” Kemper says.
For Kemper, the consumer adoption of renewable energy and energy efficiency technologies in homes is all about price. “Price is the ultimate value lever,” he says. “We’re able to price systems below other competitors because we operate at a systems level… At the end of the day energy is a commodity and commodities are all about pricing.”
The argument was compelling enough to net the company a $6 million equity financing round last September, largely, it seems on the back of Kemper’s pricing point. At the time, the company’s backers included the venture capital firm Greycroft, with participation from institutional investors like Lerer Hippeau, Box Group, and NBA commissioner emeritus David Stern.
Now Energy Impact Partners, an energy investment firm backed by some of the largest utilities from across the nation, has signed on to back the company and its vision as well. The strategic importance of getting utilities on board with consumer solar can’t be overstated — and the potential for solar development in the U.S. is vast.
“We’ve reached an inflection point in the renewable market where transitioning to solar can create immediate cost savings for homeowners with no cash outlay, ” said Greycroft Principal Will Szczerbiak, at the time.