Solaray Energy acquired as part of German startup’s $100 million Australian growth strategy

German startup 1Komma5°, German for 1.5°, a gesture towards the Paris Climate Accord target, has announced its second acquisition in Australia – Sydney-based company Solaray Energy, which boasts being Australia’s largest installer of Enphase microinverters.

This was clearly a point of attraction for the ambitious startup, which is seeking to gain a marketshare for residential solar in both Europe and Australia, partially by forming deep partnerships with “key” manufacturers. So far, the two companies it has brought major stakes in – Solaray Energy and Natural Solar – have been Australia’s number one installers for Enphase microinverters and Tesla Powerwall batteries respectively. 

“We’ve already got two significant players – that’s not by chance,” Chris Williams, the founder of Natural Solar and now the CEO of 1Komma5’s APAC arm, told pv magazine Australia. 

While Williams could not reveal details of any further purchases, he said there were “definitely” more acquisitions in the pipeline. He previously told pv magazine the plan was to make six acquisitions in Australia, with the recent press release noting 1Komma5 would spend its $100 million budget in 2023.

BREAKING NEWS: Solaray is proud to announce an exciting step forward in our mission to help reduce emissions and decarbonise Australia.

FULL PRESS RELEASE: https://t.co/8SXOELRIzb pic.twitter.com/oxnluYppAu

— solarayenergy (@SolarayEnergy) January 23, 2023

Founders of Solaray Energy, Jonathan Fisk and Pete Thorne, will now have seats as directors in 1Komma5’s global group holding, Williams said. He noted the pair will be “integral” in delivering 1Komma5’s vision of taking a marketshare for residential solar in Australia.

The startup is seeking to realise this through a multi-prong strategy, which in the first part involves acquisitions to expand scale, install coverage and entrepreneurial prowess. Ultimately, the startup is seeking to leverage economies of scale to supercharge its procurement abilities, giving it greater access to products and technologies. It is also seeking better operational efficiencies through elements like centralised logistics and warehousing.

The additional prongs of 1Komma5’s approach include introducing Australia to its “Apple store of energy” concept and its Heartbeat energy management device – both of which are already operating in Europe. In fact, the overall approach effectively replicates an expansion strategy 1Komma5 has already been employing in Europe.

Heartbeat & the ‘Apple store of energy’

1Komma5 will open its first showroom in Sydney around the middle of this year, Q3, Williams said. There, it will showcase, like an Apple store, its range of solar, batteries, heat pumps, EV chargers as well as the Heartbeat platform.

Heartbeat is an internet of things (IoT) energy management device which controls major electrical appliances in the home. In Europe, the platform has saved some customers up to 100% in their electricity costs, according to the company.

Heartbeat will arrive on Australian shores by Q2 this year – though it will be operating somewhat differently here. In Europe, 1Komma5 is also an electricity retailer and uses its Heartbeat device to create a virtual power plant fleet, Williams says.

In Australia, the device will primarily be used to control and optimise household appliances’ power use behind the meter, though Williams notes 1Komma5 is currently looking to “strategically partner” with virtual power plant (VPP) operator.

Introducing this VPP load control element to Heartbeat will be vital to bringing down costs for consumers in Australia as it has in Europe.

The company says it will offer its Heartbeat device, valued at $2250, free to its first 1000 Australian solar and battery customers.

Growth strategy

Having deep ties with manufacturers is vital to effectively deploying Heartbeat, as the byproduct of these relationships is that it drives better integration. As 1Komma5 notes in its recent media release, the Solaray Energy deal expands the global agreement it already had in place with Enphase – an agreement which has enabled Enphase’s microinverters to integrate “seamlessly” with the Heartbeat home manager.

Williams previously told pv magazine the Heartbeat device is “product agnostic” – but given that integration between brands is one of the biggest complications in creating energy “ecosystems,” strong relationships are vital. 

1Komma5 is hoping its sheer scale will give it considerable power when coming to the table with manufacturers and other technology suppliers. While it is still fresh in Australia, 1Komma5 has reached 30,000 installs per annum globally.

Only founded in 2021, 1Komma5 is led by executives with experience running companies like Tesla, Google, sonnen, Porsche, and Klarna. It is headed up by Philipp Schröder, formerly the managing director of Sonnen and Tesla’s country director in Germany. This management team has seen 1Komma5 attract capital funding from the likes of Porsche and other institutional investors.

1Komma5 has so far acquired 25 companies across Europe and operates in over 40 locations. It sees Australia as a key market due to its maturity. Moreover, it is a market Williams previously described as “ripe” for consolidation.

1Komma5 is now trying to execute this consolidation, with Williams saying the two acquisitions have already seen it massively grow its Australian coverage in the four months operating here.

“At the moment, the [1Komma5] group is really offering services and products to probably about 95% of the Australian population across those key regions.” Both long established companies in the Australian market, Natural Solar and Solaray do this via a combination of in-house installers and subcontractors.