Green Startups: democratizing the wind and the sun

The world is changing, and renewable energies are at the forefront of this revolution. From solar panels to wind turbines, renewable energy sources are becoming a reality that was the future only a short time ago.

A simple fact: according to a report by the World Wildlife Fund (WWF), the global share of renewable energy increased from 17% in 2014 to 21% in 2018. However, in 2022 Earth Overshoot Day was globally moved up to July 28.

A clarification: by "renewable energies" we mean natural energy sources that cannot be depleted over time: solar, wind, geothermal, hydroelectric and various types of biomass. These sources can be used to directly produce electricity or fuel, without burning or polluting the environment. Just what we need.

The era of self-driving cars and renewable energies.

The 21st century is being referred to as the era of self-driving cars. Rather than a very visual statement, very soon this will be a (widespread) reality. The era of autonomous cars is also the era of renewable energies.

Even though these two things are not directly related, they will be symbiotic: as gasoline cars are left behind, they will soon be replaced by electric vehicles. This means that we will need more energy to power our electric vehicles.

The question is whether renewable energies can provide all the electricity needed. For instance, one single wind turbine can produce up to 500,000 kWh of electricity per year. If we assume that a single electric car consumes about 70 kWh of electricity every 24 hours, then one single wind turbine can power nearly 50 cars.

If climate change or overpopulation do not manage to bring on a shift to more sustainable sources, perhaps we could rely on the seductive power of technology and an automated world to drive this change.

The importance of renewable energies for Generation Z.

Generation Z, born between the mid-90s and early 2000s, is the most coveted population segment right now for marketing, sales or product professionals.

It is the first generation that was born and raised in a world where climate change and rising global temperatures are real and present in the political and media agenda.

This has permeated their concerns and their main causes: 37% of Gen Z affirm that the fight against climate change is their main personal concern, and they actively commit to this with total priority over other causes, be they social, natural or humanitarian.

Since renewables are the clean, sustainable energy sources that can meet our growing needs, the Z's will naturally gravitate towards renewables. This will likely lead to faster adoption of renewable energy, and reduced carbon emissions.

In fact, in a purchase decision, 75% of Generation Z consider the sustainability of the product a crucial reason to choose it. However, only 49% give importance to the name or brand recognition that supports the same product.

In fact, the opinion and pressure of Gen Z has been driving opinion and behavioral changes in previous generations for several years. Thanks to their activism and pressure, previous generations are becoming aware, and this is especially noticeable in Generation X. This influence is explained by the coexistence of GenX parents-GenZ children at home.

Investment in renewable energies.

If we refer to Generation Z as the driver of a change of course in energy production, we must also mention the first genuinely digital generation. This is why Green Startups and the Energytech ecosystem are an intrinsic part of Generation Z.

If we understand a startup as a synonym for a flexible, agile company which, to a certain extent, does not depend on large corporate groups, the result is an unprecedented ability to quickly adapt to market needs.

Unsurprisingly, renewable energy startups are leading this global shift: According to a report by Cleantech Group, funding for renewable energy and energy efficiency increased by 83% between 2016 and 2017.

The main levels of capital investment in clean and renewable energies in 2021 were in China ($380 billion) and the European Union ($260 billion), followed by the United States ($215 billion), according to the IEA (International Energy Agency).

With a positive trend, renewable energies are in constant growth. Currently, the two cheapest clean technologies for generating new energy in many countries are wind and solar photovoltaics. This comparison was already the case even before the high gas and coal prices of 2022, so it is not just a temporary advantage.

Renewable energies, grids and storage are precisely the three industries that represent over 80% of the total investment in the electricity sector.

Good news for the lucky people with many hours of sunshine: photovoltaic solar energy accounts for almost half of new investments in renewables. Additionally, the expense is divided equally between large-scale projects and distributed solar photovoltaic systems, which definitively brings investments closer to the daily and tangible reality of families.

Wind energy, meanwhile, is moving towards the sea: if 2020 was a record year for deployment on land, 2021 counteracted it and became a record year for the sea, with more than 20 GW in service and around $40,000 billion spent.

Along with the increased interest and investment, the number of startups in this field is also increasing. This is expected to lead to more competition, which will in turn provide better services at cheaper prices. All these factors show that the growth of renewable energy is on the right track. If we listen to the Z's, this is actually the only viable path.

Renewable energy startups: the democratization of wind and sun.

This unprecedented public and private commitment gives us some interesting cases that are positioned in the sector:

At the European level, the startup Sotysolar operates in Spain. Its value proposition is the true image of the democratization of renewables. A €60/month subscription in exchange for the installation and maintenance of solar panels at home for 20 years. This monthly amount is similar to what is spent on content platforms such as Netflix or HBO (an average of €46 monthly). However, with this monthly $60, the company ensures savings of up to 50% on the electricity bill, and 85% if batteries are used.

There would be no democratization if this was only possible in single-family homes: Tornasol launched its solar panels for balconies, awnings or facades in 2021. It is a lighter, thinner version that can be installed in homes that do not have their own roof. It is also portable, which is a requisite for a generation that rents and moves an average of 6 times throughout their lives.

Another Startup launched and thriving in the United States is Epishine. Their product promises to turn devices such as temperature and humidity sensors or smoke detectors autonomous. It works indoors with small solar panels.

Finally, CommonEnergy is the most collaborative proposal: a marketplace where users connect to local solar energy networks and directly save costs on their bills. They have been operating since 2017, and managed to raise $17 million in investment to continue growing.

Conclusion

The world is changing, and renewable energies are at the forefront of this revolution. We have all the necessary ingredients for the explosive advance of this industry:

• An objective need due to the depletion of resources.
• A market that increases energy consumption year after year.
• Generation Z's, now in their 20's, are committed the sustainable cause.
• Public and private capital radically supports the promotion of this sector.

What we imagine as the future is now the present, due to necessity. We are going to witness a paradigm shift where investment, business initiatives and awareness design a new, greener and more sustainable scenario.

Opportunities

The opportunities detected for the creation of startups with value propositions adapted to each segment are:

• SaaS, clean energy aftermarkets and clean-sourced electricity and gas companies for the Gen Z segment.
• Millennials are divided between those who own a home and thus have the capacity to install their own self-consumption systems, and nomads/tenants who will consider any savings that come from self-consumption of solar energy in their next rental home a positive point .
• Installation of proprietary solar panels in single-family homes for Gen Z's and Boomers, offering digital contracting, with subscription systems, plans and customized prices. A proposal that should convince Gen Z's to influence the decision-making of their parents or grandparents.