SolarMonkey, based in Delft, is a startup specialized in calculating the best placement for solar panels. They used their own software to create a new type of sun insurance: SolarMonkey guarantees the results of solar panels. We interviewed founder Jan Pieter Versluijs about his company and this product launch.
When did you start, and why?
My co-founder Mels van Hoolwerff was writing his master thesis about predicting output of solar power systems. What struck him most was that there are some tools available to calculate output, but only few of them took actual system specifications and shadow analysis into account. The ones that did take shadow into account required a tedious process of manually reconstructing the surroundings in the software. Mels developed a methodology for calculating output and modelling shadow based on 360 degrees photographs, which was later developed into shadow analysis based on LiDAR 3D maps. This means that a solar installation can be designed and modelled in its actual environment within a minute, rather than half an hour.
Are you part of Yes!Delft or other initiatives? How does this help you?
Yes, we joined the Yes!Delft incubation programme. This is an amazing environment to be in, which helps us in many ways. There are very experienced business coaches available, as well as specific specialist skills such as juridical and financial support. Also the surrounding network helps us to easily find investors and other partners. We collaborate with Olindo Isabella, an assistant professor at the TU Delft, to optimise our calculation models.
Your current product is software for placing panels. Are you also working on improved panels? Or is your plan to focus on software?
No, our focus for now and the near future will be on design and modelling. Our aim is to design solar systems and offer safe investments through output guarantees, based on the calculation models we developed. There is already enough good quality hardware on the market, it is all about choosing the right hardware and installing it in the best possible way.
How are you funded, and what are the funding plans?
We started off by using our own savings accounts for the first six months. These have dried up slowly but steadily. In April we received some funding from our initial partner installer 365zon to develop our proof of concept software. We have also received a €25k investment from Climate Kic. This is an accelerator program funded by the European Union for start-ups with a positive climate impact. In addition to that we got a €30k personal loan from Rabobank. We are now about to close a €200k investment deal this month to further develop and exploit our product in the Netherlands. If all goes according to plan we will look for another €600k investment late 2016 to expand to the UK, Germany, France and Italy.
You launched an ‘insurance’ / finance product. Were there any legal obstacles? How did you handle them? Any other obstacles?
Well, I wouldn’t call them obstacles, but in our current business it is very important to have appropriate terms and contracts. Here we had help from the Yes!Delft network, through which we got in touch with law firm Bird&Brid. They helped us in thinking through all possible scenarios and developing the paperwork.
I would say the biggest challenge was in finding the right business model behind our technology. We started off with just some calculation models to estimate solar output. It was difficult to find a market for that in itself, so it took many conversations with existing players in the market to come up with the current model based on solar system design and output guarantees.
Was it important to do the guarantee via a separate foundation? Why?
Our vision is to offer 100% security over investment in solar energy. In practice this means that we reserve funds for each installation to cover possible future costs, based on a statistical model. Making this reservation into a separate foundation makes it very transparent, and this also separates business risks of Solarmonkey. Even in the case that an installer or Solarmonkey would go bankrupt, there will still be the funds in foundation Stichting Zonnegarant to cover all output guarantees.
How many installers do you work with, and are you looking for more installers?
We currently work with one partner installer, 365zon. They have been involved in developing our products and services since April 2015. We are now looking for and negotiating with other installers for partnerships. We aim to collaborate with 15-20 installers in the Netherlands by the end of 2016.
Any advice for other solar energy startups?
Make sure to involve existing players in the development of any type of solution you are working on. I think this holds true for any startup (I’ve seen too many startups developing solutions by themselves with way too little market validation), but because of the chaotic and competitive market of solar energy it is even more important to be aware of the market dynamics. Validate, validate, validate, and truly understand market needs! Getting NO for an answer is great feedback, so it allows you to pivot your proposition into the correct direction.