“After you’ve recouped the purchase cost, you’ll have free electricity”

Published on: 15 March 2022

APG has acquired a share in solar energy provider enie.nl. The investment is part of ABP’s Netherlands Energy Transition Fund (ANET). Jeroen Schreur, responsible for ANET at APG, explains the importance of the investment. “We share enie.nl’s ambition to continue to grow the company and thus make a significant contribution to the energy transition.”

The high energy prices have led to a greater demand for solar panels, Schreur says. “People now feel the urgency even more than before, so there is more interest in solar panels but also, for example, in heat networks, in order to get rid of natural gas. The war in Ukraine and Russia’s energy dependence once again emphasize the importance of the energy transition and the ANET mandate. Of course, we would have preferred that people had been convinced of the need for the energy transition by all the scientific findings on climate change and the news about hurricanes and floods and other impacts of climate change. But in general, it seems like people only take action when it hits them directly in the wallet. That’s understandable, too. The important thing is that at least now people feel even more urgency about the energy transition.”

What makes enie.nl so suitable to invest in?
“What makes them good compared to their competitors is their client journey. They have made sure that on enie.nl potential customers can arrange the whole process quite easily, from the purchase of a solar panel to the installation. The company has already achieved good results with this.”

What does the investment look like?
“We are financing the growth of enie.nl. They want to scale up further, and with sufficient capital there is room to enlarge the sales department, for example. The company is based in the north of the country. They have name recognition there, but they want to spread their wings to the rest of the Netherlands, so they can sell and install more solar panels. And if they continue to grow and another capital injection is needed, then we are certainly willing to look into that.”

APG has considerable knowledge and a large network. In what ways can that contribute to enie.nl’s success?
“We are a financial investor, so we basically have no technical knowledge of solar panels. What we do have is a huge network and a large portfolio. For example, APG can contribute to the name recognition of enie.nl. Through our real estate portfolio we have good connections with housing associations, for example. There is an opportunity there to install solar panels. But we also have a lot of real estate outside the Netherlands whose roofs could be covered with solar panels. Our aim is ultimately to contribute to the energy transition as well as to a good pension for the participant. If we manage to create a win-win situation, we will have achieved our goal.”

Perhaps solar panels might even last longer than thirty years

Enie.nl wants to work towards becoming the energy company of the future thanks to the investment. What does that look like?
“What it boils down to is that they want to start offering more products than just solar panels. Yesterday the sun shone all day, but not today. Chances are that yesterday, your panels generated much more than you need, after which the residual energy disappears into the energy network. But suppose you could store the excess energy in a battery in the garage or meter box. Then on a sunless day like today you could use that residual energy to run the washing machine. That’s an example of how enie.nl wants to link multiple products together. For us as investors, this is attractive because it enables the company to sell more products, which in turn is good for the company’s profit and its value.”

Purchasing a solar panel can be a hefty investment. On average, how long does it take before the buyer recovers the costs?
“It does require an investment and it has a payback period of about six to seven years. Of course, that does depend on how often the sun shines. After you have recouped the purchase costs, you will have free electricity. Exactly how long solar panels last is not yet entirely clear. Previously we thought they would last 20 years, but these days people are already taking 25 years into account. Initially it was also said that after seven years the battery of electric cars would no longer be suitable for driving. However, there are stories from California of Tesla cars with a million kilometers on the clock. So those batteries just keep on going. Perhaps this also applies to solar panels and they might even last longer than thirty years.”

Through ANET, ABP wants to contribute to financing the energy transition in the Netherlands. Are there already enough opportunities to invest in the energy transition?
“There are a huge number of opportunities, but not every investment is right for us. And sometimes another investor wants to pay more for shares than we do. Another factor is how the management of a company views APG as an investor. If we provide financing and the company subsequently does well, we can often make another investment. That’s different with a venture capital fund. They generally invest once, hope for a good profit and then move on to the next opportunity. At enie.nl, the first priority is growth. If enie.nl’s pie gets bigger, so does our pie slice. We don’t want to trade that slice of the pie for money right away, because we share enie.nl’s ambition to continue to grow the company and thus make a significant contribution to the energy transition.”