UK residential energy aggregator Social Energy is planning international expansion after securing multi-million dollar backing from US alternative investment manager CarVal Investors.
The parties have not disclosed the amount involved beyond saying that it represents “a significant investment”.
Minneapolis-based CarVal Investors bought Social Energy in December of last year, the energy company said in a press release. Following the deal, CarVal Investors London director Stuart Lammin will join Social Energy’s board.
Seven-year-old Social Energy specializes in delivering low-cost energy to residential customers. It sells solar and Duracell home battery systems, then aggregates their production using an artificial intelligence-based measurement system called the Social Energy Hub.
In addition to providing 24-hour electricity to its customers, Social Energy uses aggregated capacity to provide services such as demand response and frequency response to UK power grid operator National Grid ESO, as well as flexibility services to distribution network operators such as UK Power Networks.
About 70% of the revenue from these services is split among Social Energy customers, allowing the energy company to deliver a faster return on investment than residential solar and battery owners would get with a standard self-consumption model.
In the UK, Social Energy says it can help residential customers save an average of £ 226 ($ 310) per year. The company now has 6,300 UK customers, Daniel Mahoney, Marketing Director of Social Energy, told GTM in an interview.
Famous faces in front of the brand
Prior to the ongoing fundraiser, the company had grossed £ 12million ($ 16.5million) from high net worth individuals, he said.
These include two sports celebrities from the world of cricket: Michael Vaughan and Shane Warne, who were captains of the England and Australia national teams respectively. Warne invested in Social Energy in 2019 and helped launch the business in Australia last November.
Mahoney said Social Energy seeks significant growth in the australian market due to the prevalence of residential solar storage and batteries in this country. “We’ve already seen a really strong uptake there,” Mahoney said, without providing any numbers.
The UK averages between 1,500 and 2,000 residential solar system installations per month, he said, “while Australia peaked at 24,000 per month, so it’s really a market 10 times larger “.
The market for adapting batteries to existing residential solar systems is also much larger in Australia than in the UK, Mahoney said. There are around 3 million residential solar systems without batteries in Australia, compared to 1 million in the UK, he said.
Finally, Social Energy hopes to be able to offer its Australian customers much greater savings. The company stated in a tweet that it could save AUD 2,182 ($ 1,679 USD) per year on energy bills, based on its UK business model of selling services to the grid operator.
“In Australia, we can take this complex income and translate it into the feed-in tariff,” Mahoney said. “We pay feed-in tariffs of 40 cents [USD $0.31] per kilowatt hour, compared to a market average of 10 cents [USD $0.08]. “
Enter new markets and deliver new products
The expansion into the Australian market will be partly funded by the cash injection from CarVal Investors. But Social Energy also hopes to use the money to expand in Asia, Europe and North America, with Mahoney citing Japan, Spain and the Netherlands in particular.
In addition, Social Energy hopes to develop new products for its customers. The company is already testing the use of its software to control water heaters and aims next year to cover electric vehicle charging as well.
“An important thing for us is to become a focal point for the home in terms of smart energy management,” said Mahoney.
GTM squared highlighted social energy last year after it became one of the winners of a November 2019 flexibility tender by UK Power Networks, the London and South East grid operator from the United Kingdom. Lime jump, Moixa and Powervault, representing a sample of the competition he faces in his chosen field.
In the United States, companies including Sunrun, You’re here, Generac, sound and Inflate bundle solar battery systems for grid services, although US regulatory structures do not support the same range of revenue-generating services available in the UK In European markets, Sonnen owned by Shell is a major aggregator of solar batteries, with other players with the support of major energy investors such as Tiko supported by Engie.
Beyond the financial weight, one of the keys to success in the residential space is probably a keen sense of customer acquisition and retention. This week, Social Energy’s customer service won an award from the Renewable Energy Association, the UK’s renewable energy and cleantech industry group, which cited Social’s “efficient platforms” and “excellent” response times. Energy.