BUSINESS MODEL

Solar-as-Service for residential customers in Germany based on a leasing model providing the customer with a monthly bill which is competitive with traditional energy supply. Increasing proportion of systems being bundled with battery storage which is included in the lease finance package.

DZ-4 has standardized its terms and its documentation in order to allow the leases to be packaged and refinanced with institutional investors in the ABS market which sharply reduces the financing cost. Strong focus on digital tools to streamline the customer acquisition and fulfilment process.

LONGREACH ROLE

Refine the Business Model to reflect the long-dated, NPV nature of the client contracts. Create a parallel business reporting framework to show long-term cash flows and NPV per customer. Full Reconciliation of accounting presentation with client NPV approach.

INVESTOR OUTREACH

75 investors contacted across infrastructure, institutional, strategic, private equity, and family offices.

KEY LESSONS LEARNED

1. German residential customers are attracted to integrated solar-as-a-service offering as an alternative to conventional energy supply alternatives
2. The wholesale financing markets are available for solar ABS lease packages – offering a pathway to significant reduced financing cost
3. Certain classes of investors are better suited than others to consider long-date, NPV-based investments – where the accounting treatment may produce short-term losses
4. The best comparable companies are based in the USA. Investors having familiarity with US solar leasing models were more motivated
5. While a leasing-based solar-as-a-service business model is understood, investors are also focussed on the detailed legal, regulatory, and contractual considerations which underpin the leasing structure.