Brazil’s Solfácil solar energy fintech receives US$30 million investment

RIO DE JANEIRO, BRAZIL – Solfácil, a financing platform for solar energy projects, announced on Wednesday, June 23, it received a US$30 million investment led by US venture capital fund QED Investors.

Founded in 2018, Solfácil presents itself as the first solar energy fintech in Brazil. The company mainly finances residential installation of photovoltaic generation plates and equipment, a service provided by about 5,000 integrators.

These projects, with an average value of around R$25,000, are mostly installed in houses. Loans have terms of up to 120 months and interest rates around 1.3% per month.

The round, which also includes Valor Capital fund, comes at a time when discussions on alternative generation sources gain prominence in Brazil, as the current drought is threatening the capacity of hydroelectric generation, which accounts for the majority of Brazil’s energy matrix.

“Solar energy is part of the solution to the current crisis in Brazil, which is the best candidate in the world to expand in this sector,” the founder and president of Solfácil, Fabio Carrara, told Reuters. “But the big bottleneck is financing.”

Reflecting the increasing perception of this type of project as an investment to reduce energy bills, the solar energy market has skyrocketed in Brazil.

According to Carrara, although there is a clear desire by a large majority of the population to have a solar power generation system, it is only present in 0.6% of households, while in countries like Australia this rate reaches 25%.

“Even with the interest on financing, people soon realize that the investment pays itself off in a few years, and then they will have energy virtually for free for two decades,” said Carrara.

Solar panel installation grew 70% last year, generating 7.5 gigawatts – almost half of that produced by the mammoth Itaipu hydroelectric plant – placing Brazil in the list of the 10 countries that have installed the most solar systems in the world in 2020.

Leveraging this trend, the fintech company, which currently handles around R$700 million in credit per year, expects to reach R$2.5 billion by 2022.

Solfácil plans to use the investment funds to expand its total number of employees from 215 to 460, invest in technology, and start serving businesses and farmers. The company also intends to offer working capital to integrators.

In addition to the investment round, to meet the growing demand for the sector financing, Solfácil has issued a receivables fund worth R$500 million this year.

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