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Homeowners and other consumers of heating and cooling have been slow to adopt heat pumps and solar panels, especially where strong subsidies for installations aren’t available.
So while these energy solutions are proven and available, it seems installations are hampered by upfront costs, as well as the perceived learning curves and ownership risks people believe are associated with renewable energy options.
Offering low-carbon energy solutions as services, available for monthly fees, rather than as products requiring upfront investment, is a novel way to accelerate adoption. Real-estate owners pay Eneo Solutions AB a monthly fee for using the electricity from solar panels on their own roof as well as the heating and cooling from a geothermal heat pump on their premises.
Eneo takes care of everything from local installation to service and monitoring. In the United States this business model has been a boon to solar installers, and Eneo has adapted the model to northern European conditions, taking into account the regulatory, financial, and commercial conditions of local markets.
Eneo added geothermal heat pumps to the US model as they are a proven and widely available technology in Europe. In addition, a combined solar and geothermal system can help cover heating and cooling resulting in a powerful local and fossil fuel-independent energy solution.
Eneo views offering its energy services as a way to accelerate the shift from centralized energy - that delivered by large utilities - to distributed and resilient energy solutions. These new microgrids will support about 10-100 users, and in future be coupled with storage and demand response components.
Very few energy consumers on the market today – if any – are actively rejecting the use renewable energy in their companies or homes. However, they desire to use renewable energy doesn’t match its current share of total energy consumption. There are several reasons behind this. Two of them are related to the user’s limited technological capacity and access to investment capital. By providing renewable energy as a service both these barriers are eliminated. The concept of a product-service-system (PSS) or functional sales means that the energy consumer signs a contract with an entrepreneur who takes responsibility for installation, maintenance and financing the investment of an energy system in your house – i.e. you buy renewable energy-as-a-service.
If the deployment of geoenergy for heating/cooling and rooftop solar PV in commercial buildings can be accelerated by three years compared to global projections,* the PSS model would contribute with the annual reduction of 25 million tons of CO2 from 2023, according to WWF’s calculations.
Eneo’s aim is to expand geographically and technologically.
Geographic expansion beyond Sweden to other Nordic nations and the UK are the main focus for the 2015 time frame.
One of the chief challenges for Eneo’s current business model is “bankability” – that is, the ability to arrange easy funding for installations.
Bankability has many dimensions, and requires end-customers, installers, and hardware manufacturers, to have proof of high credit-worthiness.
Bankability also prompts Eneo to keep a close and ongoing watch on issues surrounding warranties and insurance. Energy technologies offered must continue to maintain a stable track record and performance.
In addition, Eneo must work actively with government agencies to argue the case for smart regulation in the renewable energy arena, and for net metering to help grow rooftop solar installations.
Founder Harald Överholm’s work as an investor in the clean energy sector, and the insights he gathered during solar sector research for a PhD, prompted him to start Eneo in 2012 with Wilhelm Löwenhielm. Överholm earned his PhD from the University of Cambridge, focusing on renewable energy financing. He has over six years’ experience of working with VC-backed companies in the ICT and cleantech sectors, and has advised the Swedish Government and the Swedish Energy Agency on matters related to clean technology uptake. Harald holds an MSc in Industrial Engineering of Energy Systems from the Royal Institute of Technology in Stockholm.
CEO Wilhelm Löwenhielm is a former Principal at the Boston Consulting Group (BCG). Löwenhielm has professional experience from Merrill Lynch, the Nordic Environment Finance Corporation, and the Swedish Embassy in Moscow. Löwenhielm holds an MSc in Economics from the Stockholm School of Economics and the Wharton School of the University of Pennsylvania.
CFO Richard Nicolin is a former Investment Manager at Nordstjernan, a Swedish investment company, where he worked primarily with the construction and real estate sector and the industrial goods sector. Previously, Nicolin worked for Bain & Company in Stockholm as a management and strategy consultant. He holds an MSc in Industrial Engineering from the Royal Institute of Technology in Stockholm, and an MSc in Finance and Management from the Stockholm School of Economics.
Sales and marketing manager Max Metelius has long experience in equity sales to Scandinavian institutional investors, most recently at Carnegie, with a focus on emerging markets. Prior to Carnegie, Metelius worked in different roles in the financial markets with a focus on emerging markets at HQ Bank. Metelius holds a Master of Law from Stockholm University, and a Master of Law and Economics from the University of Hamburg.
Eneo Solutions AB
The climate innovation:
Can contribute with the annual reduction of 25 million tons of CO2 from 2023