Hohm Energy, South African startup focused on solar energy, has successfully secured an $8 million (R151 million) seed funding round to expand its rooftop solar installation services.
This funding, the largest ever obtained by a South African tech startup at the seed stage, was spearheaded by E3 Capital and 4DX Ventures.
Established in 2021 by Tim Ohlsen and Emir Gluhbegovic, Hohm Energy offers a comprehensive platform featuring two main components: a digital assessment tool for determining solar energy needs for properties, and a mechanism for accessing credit financing for rooftop solar installation.
Additionally, the platform facilitates solar project management, design, procurement, and financing for installers.
Hohm Energy reports having generated more than 17,000 customised solar rooftop designs valued at $190 million, with financing applications totaling $90 million for implementing these designs.
The company has forged partnerships with various South African financial institutions to enable customers to secure structured financing for their solar projects.
Through these collaborations, customers can leverage the platform's financial tools and credit scoring system to apply for funding.
The infusion of capital will fuel Hohm Energy's expansion efforts across its product range.
Hohm Energy intends to accelerate the adoption of rooftop solar solutions in the region by investing in a new climate fintech strategy, enhancing technological capabilities, driving product innovation, and advancing skills development for solar installers.
This initiative aims to make rooftop solar more accessible, reliable, and cost-effective for a wider audience, thereby providing an alternative and sustainable energy source for the approximately 7.7 million households in South Africa.
Citing Eskom data, Bloomberg noted that the amount of rooftop solar panels installed in South Africa increased to 4,412 megawatts as of June last year compared with 983 megawatts in March in the prior year.
Hohm provides homeowners with financing options from banks including Investec, Nedbank Group, FirstRand and Capitec Bank.
Ohlsen said that the average cost of a solar installation has fallen by about half from the equivalent of about $12,000 in 2022 as less affluent South Africans put panels on smaller homes.
“Purchasing a solar system can inevitably be a very costly investment. Our average order value ranges between $8,000 [and] $12,000. We have done extensive installations, too, so it is not something people haphazardly decide on,” he told Techcrunch.
“It is something they take a lot of interest in, and it’s just a tough place for them to navigate. We do a lot of research so that when they come into the marketplace, we match them with a trusted solar installer, so they don’t have to worry about the quality of installation.”
In mid-2023, the company collaborated with GLINT, a solar finance firm, to introduce a solar subscription service accessible through the Hohm platform.
This service offers the convenience of rooftop solar solutions, including battery backup, operation, and maintenance, through a monthly subscription model.
Furthermore, the fintech plans to launch the Hohm School programme, aimed at training and empowering local solar installers nationwide.
Leveraging the Hohm Energy Standard for Solar Systems Installations (HESSSI), this programme seeks to enhance installer skills and promote industry best practices, contributing to the widespread adoption of solar energy solutions across South Africa.
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