Otovo: the Norwegian-born photovoltaic miracle that democratizes solar self-consumption
The Nordic startup popularized the subscription model for solar panels in half of Europe. It is now looking to expand into the battery business.
In winter, the night lasts about 18 hours in Oslo. In summer, the situation is diametrically opposite: the day never seems to end. A natural disparity of its geographical position, even more extreme in the north of Norway, which does not seem the most ideal for an energy such as photovoltaics to find its place.
And yet, it was in those extreme latitudes that Otovo emerged, back in 2016. A startup, pioneer in the Old Continent, which seeks to democratize the self-consumption of energy through the installation of photovoltaic panels on the roofs of any self-respecting house. It is not a company noted for innovating in the underlying technology, far from it: its real magic lies in reinventing the usual business model in these matters.
Its founder and CEO, Andreas Thorsheim, is neither an engineer nor an energy expert. His background as an economist is, however, more linked to the creation of marketplaces and other businesses intimately developed in the heat of digital marketing. But that does not matter in this case, as he himself argues, because the key to Otovo and this industry is that “deploying solar panels is as easy as buying a T-shirt online”.
“The idea came from a simple observation. Solar panels were getting cheaper by about 10% every year and that implied that it would soon become the cheapest form of energy on the planet, even in Norway. And that as the panel got cheaper, the only cost that will always remain is installation, marketing and logistics; things that happen on the ground, close to the consumer,” Thorsheim introduces to D+I.
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The leader of this startup welcomes this journalist in his offices in one of the busiest streets of the Norwegian capital. He does so just before jumping into the ring in a meeting with dozens of entrepreneurs and onlookers as part of Oslo Innovation Week. And, during the relaxed conversation, he travels between the past and the future of this sector that is so much in vogue today.
“Solar energy has evolved a lot in the last forty years. The first 20 years were focused on research and development to make better panels, the next 20 years on making them cheaper. And from now on, the challenge is to get this fantastic technology to the people,” says Andreas Thorsheim.
That’s where Otovo comes in, to bring these panels to any place on the globe, “whether it’s Barcelona airport, in Oslo, on a ship, a house or a factory”. Its founder quickly recognized that the problem to be solved was to create an e-commerce platform that would facilitate this work – from marketing to installation – and that would also make it possible to finance it like someone who defer payments for a car or a cell phone.
A successful model that used the limitations of its home country as an asset, in the form of the most demanding testing ground possible. “We thought we would be international from day one, but Scandinavia was a good place to test it because we have half the sun and half the price of electricity. So we had to be very good to make it work,” Thorsheim boasts. “If it worked here, we could take this model to Sweden, which is 50% better than Norway, or to France which is 75% better or to Spain which exceeds 100% or 150% market potential.”
The only point in favor of undertaking such an idea in such demanding conditions was the high degree of consumer confidence in shopping online. Because, let’s face it, spending 30 euros on a T-shirt in an online store is not the same as investing 15,000 euros in an installation that will be on our roof for several decades.
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Solar panels ‘as a service’… and also batteries.
Beyond its intermediary work between local suppliers and installers and end customers, Otovo’s success in many markets is based on a financing model for its solar panels in the ‘as a service’ style that is already common in other sectors such as the automobile industry.
“It’s a great advantage, especially in countries like Spain, because it allows you to bring all the future benefits of the panels into the present, lowering your monthly bill and instantly increasing your purchasing power. And we, in return, have built a small power plant on their roof that they are subscribing to, with all the information and adjustments from our side, and where we share responsibilities, commitments and risks,” says Andreas Thorsheim.
This idea is not original to Otovo, far from it: the subscription model was the one that kept the PV industry alive in the United States during the last economic crisis. More than half of the projects installed in the U.S. during those years followed this approach. However, it was an unprecedented format in Europe: an opportunity that our interviewee set out to seize.
In this case, half of Otovo’s customers are also users of this subscription model. Germany is the strongest European market in this respect, with Spain slightly above average. “And then there is France or Italy with almost zero, for various regulatory reasons,” confesses the entrepreneur, who places Poland as the jewel in the crown of this incipient sector given its flexible regulation.
Otovo continues to expand in this field, especially after closing a powerful round of financing earlier this year. Its aim is to continue to open up new markets, including Portugal, the United Kingdom, Austria, the Netherlands, Belgium and Switzerland. “We have sold solar panels in ten countries and, by the end of the year, there will be thirteen countries. We want to market 50,000 panels per year by 2024,” Thorsheim aspires. But also to continue to expand its sights into new product categories, such as batteries.
“If you asked me in March last year, I would have said that batteries would be something interesting for consumers in 2025. But last summer we started selling them in Italy, Spain and Germany and more than 50% of consumers want these devices. I was blown away,” says Otovo’s CEO.
