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A start-up backed by former Conservative Party treasurer Lord (Michael) Spencer and ex-Marks & Spencer chief executive Lord (Stuart) Rose is raising tens of millions of pounds in debt finance to install solar panels in homes using a more affordable “subscription” model.
Sunsave offers a one-stop-shop of installing, servicing and financing solar panels and batteries, comparable to a mobile phone contract.
Instead of needing to pay the £10,000 installation cost upfront, customers can take out a 20-year Sunsave loan at 5.9 per cent APR to spread the cost. The deal includes a servicing and battery-replacement package with the company for the same period.
The bank finance it is currently negotiating will enable it to take on 4,000 new customers.
Sunsave has just struck a partnership deal with Centrica in which its British Gas subsidiary will promote the service to its two million customers on the Hive smart system, which the company anticipates will create a rush of new customers.
Sunsave began installing its solar panel systems in 2022, but could launch its 20-year finance package only in January after having to wait 15 months for approval from the Financial Conduct Authority.
“That was the most painful thing I have ever done,” said Sunsave co-founder Ben Graves. “But now we are through it, we are feeling pretty smug about the wall anyone else has to climb to try to copy what we’re doing.”
Typically, customers’ energy bills fall immediately after the system is installed, even after the interest repayment, he said.
“The government wants households to get to net zero by 2035, but nobody can afford the upfront costs,” said Graves, who used to work in private equity. “The government can’t afford to pay for it, so it’s up to private sector finance.”
Spencer and Rose have invested in two rounds of financing for Sunsave, which has to date raised £11 million.
Graves said his company was currently trialling the installation of electric vehicle charging points in homes and was planning a move into installing heat pumps within a year. “We want to get every home in the UK to be fully electric and feel we have a line of sight to doing that now. We can build a really, really big company here.”