Palmetto Raises $375 Million to Accelerate Residential Clean Energy Independence
CHARLESTON, S.C., Feb. 24, 2022 /PRNewswire/ — Palmetto, a leading clean energy marketplace and technology services platform, today announced it has raised approximately $375 million to accelerate the adoption of residential solar and clean energy independence across the United States. The round was led by Social Capital, with participation from new and existing investors including ArcTern Ventures, Gaingels, Lerer Hippeau, and MacKinnon, Bennett & Co. (MKB).
Palmetto’s Unique Approach to Clean Energy Adoption
Today, the residential solar market primarily consists of asset-heavy, low-margin business models, which make the transition to a clean energy system expensive for both homeowners and providers. While residential solar represents a more than $100 billion total addressable market, only 3% of the more than 70 million homes across the U.S. utilize solar energy.
Meanwhile, the U.S. continues to face an energy crisis on many fronts, ranging from reliance on carbon-based fuels to struggling utility companies with aging infrastructure, existential liabilities, and rising energy bills.
By leveraging proven business models – such as third-party services marketplaces and subscription-based revenue models – Palmetto is able to maintain substantially lower operating costs compared to peers and pass those savings onto homeowners, ultimately making clean energy adoption more accessible and affordable for Americans.
The company takes a marketplace-based approach to the most expensive aspects of the residential solar value chain – customer acquisition and installation – by facilitating a third-party network of trained sales specialists and certified technicians. Combined with Palmetto’s proprietary software platform that manages the survey, design, engineering, financing, permitting, maintenance, and active system monitoring aspects of the transaction, the company offers a complete end-to-end transaction platform without the operating expenses of a vertically-integrated provider.
As a result, Palmetto is able to offer its customers a path to clean energy independence at a cost up to 30% lower than its peers. This model also decouples revenue growth from operating expenses, creating a win-win-win-win for homeowners, Palmetto’s network of sales and build members, shareholders, and the broader advent of clean energy independence.
Palmetto will use the funds to invest in growing its marketplace of independent contractors, as well as the technology, people, and resources to maintain – and over time grow – its overall operating efficiencies in order to expand its addressable market.
Chris Kemper, Chairman, Founder, and CEO of Palmetto, said: “Palmetto is the first distributed energy company built from a software foundation, which enables us to scale unlike any other clean energy provider and make real progress towards our mission of mitigating climate change. I honestly believe that in the same way the cell phone fundamentally changed the telecom market, Palmetto has the opportunity to do the same to the centralized fossil fuel industry.”
Kemper added: “This is a major milestone not only for Palmetto, but for the entire clean energy sector. We remain hyper-focused on offering the best residential solar product on the market, which we aim to do through seamless execution of our unique operating model. We look forward to the next step of our evolution whereby we expand our marketplace to include other cost-saving products and services that empower homeowners to achieve energy resilience and independence.”
Chamath Palihapitiya, Founder and CEO of Social Capital, said: “Each year the energy crisis in the U.S. becomes more visible and urgent – utility companies are becoming even less reliable, climate calamities have exposed our aging infrastructure, and energy prices continue to rise. Palmetto is taking a fresh and unique approach to the residential solar model, making it easier than ever for homeowners to become energy independent, a major step towards a sustainable energy future. We are excited to back Chris and his team on their mission to solve one of the biggest existential threats of our generation.”
The company also announced that Chamath Palihapitiya and Nirav Tolia, Co-founder and former CEO of Nextdoor, have joined Palmetto’s Board of Directors. They join other directors and advisors, including Joanne Bradford (former Pinterest and SoFi), Monica Wililams (Equity Project), Francis Suarez (Mayor of Miami), Will Szczerbiak (Greycroft), Kyle Burks (STR Services), Jared Wray (Palmetto, CTO & Co-Founder), and Sean Hayes (Palmetto, Founding Team).
For more information about Palmetto and its products and services, please visit: www.palmetto.com.
Palmetto is committed to the democratization of energy by putting power and control back in the hands of consumers and inspiring them to make environmentally responsible choices. The company has developed a clean energy marketplace, with proprietary technology designed to make it easier and more affordable for homeowners to source their energy from renewables like solar power. Palmetto is an award-winning company and most recently was awarded Sustainable Company of the year by Best Company. For more information, please visit www.palmetto.com.
About Social Capital
At Social Capital, we make big bets on transformational ideas, technology, and people. We strategically invest in smart, profit-minded opportunities and forward-thinking social investments that have the potential to shape a better future.
We do this from a balance sheet of permanent capital to support entrepreneurship at all stages. This allows us more flexibility to double down on our convictions, without the limitations of traditional fund structures, and gives founders the runway and resources necessary to succeed. We believe in the outsized potential of for-profit businesses to drive impact in the world. We aim to set a new standard for what capitalism can be.
To learn more about Social Capital, visit www.socialcapital.com.
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