If you were planning to start a business selling solar panels, the very last place you would do it is Scandinavia. “It is the worst place on earth to start a solar company,” says Andreas Thorsheim, CEO and founder of Otovo, a Norwegian enterprise that has become Europe’s leading residential solar company. “It’s not just that we have the worst solar conditions in Europe. We also have the cheapest electricity and the costliest labor force.”
In addition, says Harald Overholm, CEO of Alight, a Stockholm-based provider of solar projects for business customers, “we don’t just lack sunshine, but also support schemes.”
However, it is that very adversity that has enabled a number of Nordic solar businesses to thrive. “We were inspired by the US, where people built great solar companies just selling on a pure commercial basis,” he adds.
Alight offers customers the chance to move away from depending on volatile energy commodity prices. “Our customers can lock in a fixed price for the long term – between 10 and 20 years – through a power purchase agreement (PPA).”
In a way, it forces you to perform, Thorsheim says. “And the cost of solar panels has fallen so much in the last decade. The equipment used to be about 90% of the cost of an installation – now it’s 40%.”
And being able to sell solar subsidy-free in Scandinavia helps companies develop a skillset that is easily transferred to other markets. Alight has projects in Finland, the UK, Spain and Poland as well as Sweden, where earlier this year it announced 2GW of installations in partnership with Sveaskog, the state-owned forestry business. It aims to have at least 5GW installed by 2030 – totaling €1bn of investment.
To address the fact that labor is now a significant part of the cost of installing panels, Otovo – which is active in 13 European countries, from Portugal to Poland and Sweden to Spain – has created an innovative model whereby it connects customers with Europe’s small army of electricians, who offer their services through an automated bidding process and customers get to pick the cheapest or best-suited to their needs.
The company, founded in 2016, also uses technology, including satellite data, to help potential customers calculate how much sunlight their roof receives, how much energy it could produce and which products would be most effective. It benefited from the fact that Norway made detailed data publicly available for all buildings, enabling it to train its software on the shape of roofs automatically rather than having to gather the data manually.
It also offers a leasing option to reduce the upfront cost of installation, which often serves as a barrier to adoption.
Some 40% of its customers are now also buying battery storage from the company, double the proportion last year, and Thorsheim says that “within two to three years, all PV will be sold with batteries”.
For Alight’s customers, part of the attraction of solar is that “it makes their business greener in a very tangible way – signing that contract means something gets built. Green credentials now are not just about sustainability goals – it’s a competitive issue, too,” says Overholm.
And these Nordic solar powerhouses are only just getting going. “There’s so much left to be done in solar,” Overholm adds. “The beauty of it, when you’re not worrying about subsidies, is that it’s exactly the same wherever you do it. You’re delivering exactly the same thing. Many of the technological breakthroughs have already happened – it’s just about producing power at a lower cost.”
Thorsheim adds: “Scandinavia is a good future lab. If you can make it work here, you can make it work anywhere.”
