A new company is aiming to be the first to bring affordable, reliable clean solar power to the German public. DZ-4, a startup founded by Tobias Schütt and Florian Berghausen, intends to provide Germans with a viable, distributed alternative to the country’s traditional power grid, and Schütt believes now is the perfect time to make that a reality.
In the U.S., distributed solar energy models of home energy production already have a foothold. California-based SolarCity provides an all-in-one design, installation, monitoring and financing solution for residential and business clients, for example, and was recently named the 10th most innovative company in the world by Fast Company. Google joined with SolarCity in June of last year to create a $280 million fund to help drive uptake of residential solar systems. Then in December, Google announced a brand new $94 million investment in photovoltaic (PV) initiatives being constructed by Recurrent Energy in California.
The challenge with getting a PV system similar to the one SolarCity sells working in Germany, Schütt said in an interview, is that the country doesn’t meter its power in the same way as its handled in the U.S. That necessitates the use of local storage, which just wasn’t economically feasible until now. “Without net metering, it’s just a very different concept in how energy is provided to the market,” Schütt said. “With the Euro crisis, every country is looking to reduce spending, and therefore renewable energy support schemes are being questioned. In that context, trying to set up a distributed utility company that will not require any government support and is purely market driven, is an expensive idea.”
That might seem like a daunting scenario from which to launch DZ-4, but Schütt is confident the time is right. “According to recent surveys, basically households are saying they’re willing to pay a slight premium at least in order to support a renewable energy scheme that’s solid and sustainable,” he said. “That’s what made it the right time to launch DZ-4.” Schütt is currently in the process of putting together DZ-4′s first round of funding, which he says will close “by the end of June, or likely even before that,” but he couldn’t disclose any specific details of talks.
And despite the fact that rates at the outset will be slightly higher for customers than purchasing from the grid when DZ-4 systems begin to actually be installed on houses sometime during the second half of this year, Schütt says long-term his customers will see a price advantage. “The economical pitch is that you’re locking in your energy rate for the next ten years,” Schütt says. “Energy prices have risen by five percent per year over the last 12 years in Germany. So what we’re giving clients is price stability that they can’t get from any other energy provider in Germany, simply because energy rates are driven by taxes associated with the grid. We’ve worked out a way to avoid those taxes, so we can predict costs over a longer period than traditional utility companies.”
They key to success for DZ-4 will be making sure customers not only see the long-term economic and environmental benefits, but are also provided with a solution that is easy to set up and maintain. “Many clients are interested in solar PV, including storage technology,” Schütt says, “but it requires decisions on technology, on service providers, on the form of financing… DZ-4 is basically taking on all these decisions and wrapping them into a simple, take it or leave it contract.”
Schütt is no newcomer to green energy. He’s worked for Conergy and BP Solar, and left a position with Deutsche Bank’s renewable energies department to form DZ-4. Schütt’s partner Florian Berghausen has been working in marketing and distribution for solar PV in Germany for the last ten years. In that time, he’s learned that selling PV to customers is not about price; it’s about trust, and providing an installation and setup process people are used to. That’s why Schütt believes DZ-4′s strategy of using trusted, established suppliers from the PV industry combined with competent installation technicians sourced from the local communities of customers themselves will be allow DZ-4 to win over German consumers.
Consumer PV is becoming big business in the U.S., thanks in part to major support from companies like Google, but it has yet to make significant strides in much of Europe. Schütt is hoping the time is ripe for that to change, and that investors and consumers will reward DZ-4 for being an early mover in the German solar PV market.